Stop Using Eskom as a Political Football
PD Lawton Interview
with Knox Msebenzi MA, MSc, MBA
Knox Msebenzi is the Managing Director Of the Nuclear Industry Association of South Africa (NIASA); Former Projects Manager of the Nuclear Energy Corporation of South Africa ( NESCA). He holds a degree in Engineering from Cambridge University and an MSc in Electrical Power Engineering from Ransselaer Polytechnic Institute
Monsters of Load-shedding
Given that former Eskom CEO, Andre de Ruyter, has himself, accused Eskom of being under State Capture, do you think it is fair to say that under de Ruyter, Eskom has suffered from `Green Capture` not State Capture?
That is one way of looking at it because, his principal, his superior, Minister Pravin Gordhan, has in fact come out and basically agreed with what the Chairperson of the Board said : that de Ruyter in his tenure focused so much on renewables and neglected his core responsibilities of maintaining the coal fleet. So you could say that, because the principals, the Chairman of the Board, are saying the same things. So there has to be some truth in it.
It can be argued that Eskom, like any other SOE in the South African political environment, is a poisoned chalice. The fact that we have seen 10 or so CEOs in as many years speaks volumes about the environment. Governance issues and the claimed political interference by politicians create an atmosphere not conducive to proper running of this essential utility company. There are many stakeholders e.g. Black Business Council, NUMSA etc. who have argued that the choice of a lawyer to run an essentially engineering company was inappropriate. Yet there were others that gave him the benefit of the doubt and were hoping he will succeed. By his own admission, he was not able to address the key performance indicator – combating loadshedding.
During his time I have publicly said that it is not his place to be advocating for renewables. Let renewable people market their products. Let him focus on what Eskom does, it does the best. If there is no renewable energy put into the grid, whatsoever, that is a Department for Mineral Resources and Energy issue. It is a policy issue. Eskom is not supposed to be involved with policy. It can be involved in making inputs into the Integrated Resources Plan process. They did make input in the 2018/2019 IRP. But for the CEO of Eskom to be seen to be on almost every public platform and saying renewables, renewables, is not right. It doesn’t sound right. It is outside of the mandate of his KPIs (Key Performance Indicators). It is not about whether renewables are put in place or not.
And this is not about saying renewables are bad or good! This has nothing to do with that! He must stick to his lane. That is my view.
– So in essence you are saying he has been very biased towards green energy that we get from renewables. I believe South Africa has spent on renewables in the last few years, the same as it would have cost to build a second Koeberg.”
Yes, I believe so. The interesting thing about the green lobby is ; when there was talk about 9600 MW which was going to be built over a period of 10-20 years, there was a lot of noise about the cost going to be R1 trillion. First of all that figure of R1 trillion was a thumb-suck and an exaggeration. It was meant to paint nuclear in a bad light. And let’s say that trillion Rand was correct, for arguments sake; after COP26 there were estimates made about South Africa going green and a figure of R3 trillion was quoted. Not a word from the NGOs about it, that we cannot afford it! Not a word! There was a lot of noise about that R1 trillion for nuclear that was not even true! And nuclear does not need any back-up. It is self -sufficient. It will provide the energy 24/7, 365 days a year! But now we are talking about green and R3 trillion is quoted and no noise about it going to be expensive! Very strange! I think the emphasis on the green is misplaced quite frankly.
–Minister Gwede Mantashe has previously stated that de Ruyter`s tenure has failed the nation. He stated: “Eskom. by not attending to load-shedding is actively agitating for the overthrow of the State”,in other words, tantamount to treason. Ted Bloom, former Eskom engineer suggested that de Ruyter had “had his head messed with.” So what stance would you take? Would you say de Ruyter has been misled down `the green path ‘or would you take it more seriously as Minister Mantashe has, and say that excessive load-shedding has undermined State security?
My understanding of what Mantashe was saying: if Eskom, which is tasked with the responsibility of making sure that the country has got enough electricity, which is the backbone of the economy of the country, if it abdicates that responsibility, if it does not do that, it might lead to civil unrest, a lot of people being unhappy, because it will lead to unemployment and other things; that in itself could result in a revolt, a revolution of some sort which might actually topple the government.
So in a sense what he was saying is: the failure to provide electricity is a major issue for the security of the country. I did not hear Mantashe saying de Ruyter is plotting to topple the government but he was saying that the actions or lack of actions amount to that because people will revolt when unemployment keeps going up, when the Rand keeps dropping and all the economic indicators go south! That would cause a lot of unrest and unrest in South Africa is typically accompanied by violence. No democratic government would survive that kind of unrest. That is what Mantashe was talking about. This ought to be addressed very seriously as the ruling party cannot sit by and allow this monster called load-shedding to continue unabated. That is what I understood Mantashe to have been saying.
–Yes, energy is a strategic pillar of any country. In February, President Ramaphosa declared a national state of disaster to respond to the ongoing energy crisis. Minister Mantashe has stated that South Africa has a baseload crisis rather than an energy crisis. Could you please explain what is going on and explain what baseload is.
Baseload basically is the minimum level of power on a grid over a span of let’s say 24 hours. There is a level of mega-watts that any grid or any economy for that matter, does not go under. It is the minimum load. Within that chosen period there will be peak periods, typically in the mornings when bakers are baking, homes preparing breakfast, electric transport like Gautrain running etc. Then in mid-afternoon there is a lull in demand. Then in the evenings when people are cooking, travelling, demand picks up again. So when you have periods of high demand you need capacity that you can ramp up to meet that demand. And the type of generation that can be ramped up or ramped down is called dispatchable power. In South Africa that is either in the form of diesel, coal, nuclear or gas. So with coal, the system runs at 60-80% during the off-peak period waiting for the time when the demand goes up then they can ramp up to meet that peak. So basically what Mantashe is saying is that we don`t have enough of that kind of power sources available that when demand fluctuates, we can ramp up and ramp down as needed.
With renewables you basically get what you have. When the sun is shining, you have a certain amount of power but you can’t turn up the sun! The same with the wind. You can’t make the wind blow harder. So renewables are not responsive to the demand of the grid. If you have a solar plant that gives you say 20 MW at a given time and you switch on an additional 1 MW , there is nothing you can do to the solar to increase it to 21 MW. It is not dispatchable. The best you can do when the solar is available is say you have maybe 50 MW available but you are only consuming 20 MW hoping that if needed you can still ramp up to that limit. But this is not the type of contract we have in South Africa, the renewable energy contracts we have currently are if a solar plant is generating say 50 MW at midday but the system operator does not require those 50MW because of low demand, Eskom has to pay for it anyway. Take or pay contracts. So for Eskom it is a case of tough luck if you don’t need it you still have to pay for it!
–That seems grossly unfair
Yes, it is and this is why the renewable energy lobby praises the South African system for being a success, because it is very successful for the IPP investors!
What Mantashe was also speaking about was – the installed capacity for coal is about 48 000 MW (almost 50 000 MW). That is a combination of old and new coal plants. The maximum demand has never really exceeded 33 000 MW. We do load-shedding because the 50 000 MW that are installed in the system are not able to supply 33 000 MW because of breakdown outages, they are not reliable. The most commonly used excuse for that is the plants [coal] are old. While it is true some of the plants are old, not all are, and some of the new ones have got problems but there is also the issue of corruption. But what is often said about the old plants, which confuses the public, is that sometimes they use the term – they have reached their sell-by date. Power plants do not reach a sell-by date. Bread and milk have sell by dates, not coal plants. They have running parts which are routinely maintained and at times replaced. Yes, as a plant gets older it becomes more expensive to maintain but it never gets to a sell-by date. date. Retiring a coal power plant is typically driven by business considerations and/or policy decisions on the energy mix. So if you compare say Komati Power Station, old as it may be, it may be more expensive to maintain than 10 years ago. But if you go and compare the cost of maintaining it to the cost of using diesel to replace its power, you will find it is much better to maintain Komati Power Station, old as it may be.
I honestly think people like Andre de Ruyter, being a non-engineer, may not have fully grasped the difference between renewables, and coal. What complicates matters is when people like that are advised by people who are deemed to be knowledgeable but have got certain commercial agendas, and is told that renewables will solve the load shedding problems. It is just not true, it is blatantly obvious. What surprises me is that it is only now that de Ruyter castes a few aspersions on the ANC government, that the powers that be are starting to criticize him whereas all along they have been praising him for doing an excellent job.
–Except for Gwede Mantashe
Yes, except for Gwede Mantashe who has said consistently that renewables are not going to solve the loadshedding problem. And he stood firm on that ground. He’s actually acknowledged that his arm was twisted when the President announced he was going to allow the lifting of the threshold on IPPs to 100 MW to connect to the grid without the usual license requirements. Mantashe said the president twisted his arm for him to agree to that. But the interesting thing is that since we have had that promulgated we have not seen an avalanche of renewable energy projects coming on board! Maybe they are in the pipeline, we don’t know. But it was as if Mantashe was closing the door on renewable projects. He was not! He opened the door and guess what, there was no stampede of people doing renewable projects! It was all just political point scoring!
–Gwede Mantashe has fought tooth and nail for South Africa to continue using coal up until it is possible to achieve the energy transition; and he has been a staunch supporter of your sector, which is the nuclear industry.
Absolutely, and that is not to say Mantashe is anti-renewable energy! He is on record for having said, and told his staff as well, that he is not a minister of renewable energy, he is not a minister of nuclear energy, not a minister of coal or oil. He is a minister of energy. All energy sources should be treated equitably. That was the mistake de Ruyter was making, only punting renewable energy, not coal or nuclear, he hardly ever mentioned them. At any given opportunity he would speak about renewable energy. And also this interpretation of a Just Energy Transition (JET), which is distorted in my view. What the general public thinks is JET is moving from coal to renewables. That is not correct and could not be further from the truth.
The term Just Energy Transition was coined by the International Labour Organization which was concerned about a loss of jobs if the world suddenly dumped coal. So they were talking about moving away from unsustainable energy sources and moving towards more sustainable, greener energy sources and doing that without jeopardizing employment opportunities for the current people who are working in this sector. That is where the term comes from. It is not about going to renewables! Yes renewables are part of the sustainable sources but are far from being Zero Emission, because in the making of solar panels and wind turbines there are a lot of carbon emissions. They are not green in the true sense of the word but are a lot more sustainable than dirty coal that the Germans are now going back to using.
–Recent times have really shown up this debate for what it is because now Germany, UK and other European countries now have got a real energy crisis, rather than just a baseload or distribution crisis. Because we have blown up our gas storage facilities and in Germany shut down nuclear power plants and now can’t get hold of Russian gas because of the sanctions and the fact that America and Norway conspired to blow up the Nord Stream pipelines. So we have a real energy crisis. South Africa is in a much better situation.
So Mantashe is right then in that sense that those countries that are suffering from energy sources to meet their requirements do have an energy crisis. Here in South Africa we have got lots of energy sources including solar and wind and coal but what we are lacking is dispatchable power that can be turned up or down as needed. We are even exporting coal, so we don’t have an energy problem in that sense.
–On the subject of coal- I am referring to video that was on social media just before Christmas, of kilometers of trucks laden with coal waiting to cross the border from South Africa into Mozambique for export purposes. People have been outraged by this, that coal would be sold for extra profit during a time of all this load shedding. Could you give us your insights and do you know if it is still going on?
I believe it is still going on. The way I analyze the problem, is it is multifold, quite complex. The railway line that traditionally takes the coal from the coal fields to Richards Bay, the main port of export. Richards Bay, the main terminal, we have coal which is exported; the coal is usually taken there in railway wagons, the abundant coal from Mpumalanga. Unfortunately the capacity of Transnet has been hit by some challenges of cable and even rail track theft, apart from the general issues around the state of SOEs in South Africa. So this railway infrastructure issue, coupled with the demand from the EU and elsewhere, following the Ukrainian crisis is why we are seeing all those trucks on the road transporting coal. The other thing is that there are some unscrupulous people who have got contracts to supply coal to Eskom, who collude, it is claimed, with security at coal power stations, and supply rubbish coal or even stones, not even coal and take the good coal to Mozambique to sell it for export. So that is another dimension to the story of the queue at the Mozambique border. But just to clear up the different grades of coal, coal for power generation, coal for export. In South Africa, a strategic decision was made – we have a variety of coal grades, some of the very high grade coal is used not for power generation but for metallurgical processes like steel manufacturing or coal gasification by Sasol.. Then there are different grades for power generation, the different grades fetch different prices. So it makes financial sense to make the most of your export quality coal, the superior grade stuff.
It is important to state that South Africa does not have a coal shortage. We have excess reserves to afford exporting a lot of it without starving our power plants.
-A Colleague of yours, Dr Kelvin Kemm, suggests a military approach to resolving Eskom [1]
When a country is facing a crisis that has major economic and social stability consequences, it may be appropriate to deploy drastic measures to resolve the situation. It is however important to note that these measures are more appropriate to address security and sabotage related issues. The technical issues require competent technical people without political or ideological agendas. What we are observing with the situation in S.A where every Tom, Dick and Vusi has become an energy expert when in most cases they have vested economic interests and not offering real solutions.
-In conclusion have you any last comments to make on your sector of expertise, nuclear?
Well obviously as we have discussed the problem here in South Africa as being a dispatchable crisis, nuclear energy is a credible source of dispatchable energy , I think the world is generally going that why. So we stand a good chance as long as Mantashe stays in Cabinet because he has been very steadfast in terms of supporting nuclear. Africa wide there are many countries interested in going nuclear, Ghana, Nigeria, Kenya, Uganda, Zambia, Rwanda. So the continent is really ripe and ready for nuclear. That is the best way to bridge the energy gap. And the interesting thing is that nuclear and renewables are complimentary, they don’t compete in the same space. So you can use nuclear as baseload and then harness solar and wind when available. So we need nuclear, especially as we are moving away from coal in its conventional form to clean coal which may turn out to be very expensive, not all countries will be able to afford to implement the measures to make the coal clean which puts the cost of coal way up which would actually make the cost of nuclear more competitive. Of course most African countries don’t have coal; they would be using hydro which is actually a good baseload power and renewable. It is strange that the renewable energy lobby are not that keen on hydro. There are so many of these NGOs that say hydro is not good for the environment and all that . And they are silent on Grand Inga that could power most of Africa.
Thank you Mr Msebenzi for your time. It has been very informative talking to you.
Footnotes:
[1] see article on this website `South Africa may be undergoing the greatest economic and political shift since 1994` by David Cherry , 23 January 2023
BASELOAD/ Load-shedding:
The baseload is the minimum level of demand on an electrical grid over a span of time, for example, one week. Electrical power demand from the grid is variable typically according to the time of day or season. Baseload is the minimum a power grid ever gets to over a period of time e.g. a 24 hr period. As the demand varies, power generating sources need to be able to keep pace with the load demand; in order to maintain stability (constant frequency of 50 Hz). To be able to do this, dispatchable power sources are needed – in other words power sources that can be ramped up or down as the need arises. In the South African situation, this is provided primarily by coal. There is roughly 50,000 MW of installed coal generation yet a maximum demand of less than 33 000 MW cannot be met, hence the need to cut of some load (loadshedding)