Overseas with AEMO - South Africa’s energy industry

7 min

AEMO recently went to SA to find out more about the evolving energy industry there…and by SA we mean South Africa.

Jacqui Mills, one of AEMO’s Graduate Project Managers, recently spent a month in South Africa learning more about the energy industry and power system there through meeting with a number of high profile local and multinational organisations - Eskom, CSIR, AECOM, CIDIC and the African Development Bank. Her objective was to gain an understanding of the current challenges and opportunities within Southern Africa, share her Australian knowledge and experience, and to collaborate on integrating additional renewable energy into existing power systems.  

EL: What were your first impressions of the South African energy industry? What are the biggest challenges and opportunities in their sector?

JM: I think my first impression was that the South African energy industry is very complex, technically and otherwise. They have quite a ‘tight’ system, in that it doesn’t have a lot of excess generation. There is also a lot of ageing infrastructure which puts them in a challenging operational and financial situation to maintain that infrastructure or commit to building new systems.

South Africa (SA) actually supports a lot of the load requirements for the African countries north of it. They have a peak load of more than 37 gigawatts (GW) whereas the countries on the Northern border of SA have loads approximately between 0.8GW and 2GW, and they’re all electrically connected. This, inevitably, puts pressure on SA to produce energy not only for itself, but for those neighbouring countries too – if something happens, it affects them all.

In terms of opportunities, I think any improvements/additions that can or will be made to the existing SA power system will almost certainly have a broad and significant impact, especially when you consider the supply commitments to those neighbouring countries. 

EL: Did you observe many differences or, indeed, similarities between the South African energy industry and Australia’s?

JM: Eskom (South Africa’s electricity public utility) owns most of the generation, transmission and distribution (energy) infrastructure. As a result, they can operate slightly differently than we do in Australia. For example, they utilise their assets differently at times of peak load compared to AEMO/Australia where it’s driven by the market. 

Both countries engage in demand forecasting, but SA relies on very experienced personnel with an intimate knowledge of the power system to advise on how to meet the load/daily demand profile, whereas in Australia we have a market and rely on the bids and offers from generators to dictate when machinery is operational during the day. 

South Africa has approximately 60% industrial load, and the demand profile is a lot flatter relative to Australia (comparatively less industrial load and a peakier demand profile) – this also impacts how they operate their system.

EL: You met with the African Development Bank, what is their vision/long term plan for energy projects in Africa? 

The African Development Bank, who is a major investment partner for African energy projects, has established a program called ‘High-Fives’ which includes their five strategic goals. 'Light up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa. These focus areas are essential in transforming the lives of the African people and therefore consistent with the United Nations agenda on Sustainable Development Goals (SDGs).’

‘Light up and Power Africa’ aims to address the 640+ million people in Africa living without access to energy. This equates to an electrification rate of just over 40 percent, the lowest in the world. Per capita consumption of energy in sub-Saharan Africa (excluding South Africa) is 180 kWh, which is far lower than 6,500 kWh in Europe and 13,000 kWh in the U.S. Access to energy is essential for health, water, education and unlocking economic potential.
EL: Finally, can you give us an overview of the South African renewable energy road map?

JM: It’s an interesting time for renewables in SA. The country has conducted multiple successful rounds of the competitive tender process, Renewable Energy Independent Power Producer Programme (REIPPP). This process was designed to facilitate international private sector investment into grid-connected renewable energy generation. Introduced in 2011, the REIPPP has allocated 6.18 GW collectively over five auction rounds to a range of renewable energy, including; wind, solar, solar thermal, bioenergy and hydropower. 

As released in the 2018 draft Integrated Resource Plan (IRP), they are currently exploring a decision to limit the amount of new renewable energy into the power system to 1000 MW per year for PV and 1600 MW per year for wind, up to the year 2030. The rationale behind this is that they are aiming for a smooth roll out of renewable energy generation, which will help to sustain the industry. 

This is a different approach to what we do here in Australia – we’re not putting a roof or cap on new renewable energy coming into our power system, even though we’re closely monitoring the transition to renewable energy generation. 

EL: Thanks for your time and insights Jacqui

JM: My pleasure, thanks

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