Keynote speakers at FSA’s AGM slice and dice the energy crisis and uncover the opportunities that await private sector entrepreneurs …

There is a massive shift taking place in South Africa’s energy sector, from the current public sector energy monopoly to private sector participation, that will end load shedding roughly 18 months from now.

This startling revelation from highly respected political and trend analyst JP Landman caught delegates at the Forestry South Africa AGM unawares. We are so used to hearing about the energy crisis, we suffer the consequences of it at home and at work every day, and we expected more bad news from the keynote speaker to follow the already bad news that has cast a veil of gloom over our lives since forever.

But JP wasn’t joking, although his talk was full of light-hearted banter and sharp-witted humour that sliced through the brain fog enveloping our lives like a hot knife through butter.

South Africa currently has a power ‘baseload’ gap of 6 000 MW, explained JP. Baseload is the dependable power that is always available, and is crucial to meet the fluctuating energy demands of our nation.

There are currently 18 private sector-driven renewable energy projects that are already on the ground in South Africa, explained JP. These projects have the capacity to deliver 18 000 MW which will end load shedding by end of 2024, or by mid 2025 latest. Just 5 000 MW of renewable energy will cut load shedding by 61%, and we could achieve that milestone by the end of this year.

This will be achieved with no additional power contribution from existing state-owned power stations.

“Eskom is a government-owned monopoly that is collapsing in on itself,” said JP. This has led to the current energy crisis which has opened the door for private sector participation in power generation.

“If things were working well, the private sector would never get a look-in,” he said.

He described this as a “massive shift” that will bring South Africa into line with the rest of the world.

“Most countries in the world have moved away from government energy monopolies, because they don’t work,” said JP.

Half of Eskom’s generation capacity will close down over the next decade, he predicted. Eskom will expand the national grid, but there will also be mini-grids and micro-grids established at local and neighbourhood level that will distribute privately generated renewable power to a few households, or a small village, or a cluster of businesses. The technology that makes this possible is already available.

“By 2034 our energy system will be very different from what it is now, and we will have forgotten about load shedding,” said JP.

Medupi and Kusile will continue to eat coal for another 40 years, and gas and nuclear will be added to the energy mix. Gas is much cleaner than coal and you can switch it on and off as and when you need it, so it plays an important support role in a country’s energy mix.

From a business perspective, this energy transition to renewables is critical.

“We need to cut our emissions by 17% - we have to go green otherwise we will be barred from exporting our products to important overseas markets. Eskom and Sasol are the worst offenders.

He predicted that the big shift will see the rise of energy traders who will be sourcing clean energy and selling it on to customers.

“In a few years you will be liaising with an energy trader – not Eskom,” said JP. “This is already the case overseas.”

Municipalities will be in crisis, as they won’t be making money out of on-selling electricity. But here too, out of crisis comes the possibility of change, and they will have to jack up their services in order to survive.

R1.5 trillion will have to be invested in this new economic sector, and this presents a “HUGE” opportunity.

“Energy is the new gold,” he said.

Turning to the political front, he was equally forthright. Progress is restoring the dignity of every citizen in their everyday lives. This, he said, can only be achieved by a grand government coalition that has the support of 75% of the people.

“Nobody can do it on their own. We need shared values, we need inclusivity …”

Don’t delegitimise South Africa’s democracy, he pleaded, we just need a more or less helpful attitude towards one another and to unleash the power of science and technology to restore dignity to people.

“Be grateful for the fact that we live in peace.”

Blackout blues

Following that blockbuster presentation was always going to be a tough ask, but energy analyst and consultant Chris Yelland got right down to work with a snapshot of South Africa’s energy availability factor which is on a downward trend. This will have to bottom out before it gets better - and the bottom hasn’t been reached yet.

But like JP Landman’s presentation, Chris also offered a silver lining, as he urged the forestry sector to “take ownership of your own energy future”.

Basically, the private sector must get involved in energy generation, and the forestry sector is in the right space to achieve significant energy independence.

“If you are waiting for government to do it you will wait a long time. What is the forestry sector bringing to the table in terms of energy generation capacity?”

But he also shed some light on the dark side of the energy equation - a total national blackout – and offered some slightly comforting news to balance this very uncomfortable prospect.

Chris explained that a ‘blackout’ is caused by a major disturbance on the national grid, and it can happen in one second. It is not a gradual thing. For example if the line to the Western Cape trips and a power unit at Koeberg goes down simultaneously … unlikely but it is possible.

He said the level of load shedding currently being experienced is not an indicator of the likelihood of a total blackout. However it has had a galvanising effect and we are now much better prepared for this eventuality than we were when load shedding began a few years ago.

“Even though the probability of a national blackout is very low, the consequences are so severe that even the insurance companies won’t cover them.”

A blackout could last for a few days, or a week, or even four weeks. The consequences of an extended blackout are not pretty:-

• No power, no lights, no refrigeration
• No cash, no banks, ATMs or card machines
• No food, shops close
• Petrol stations close, no petrol, no diesel
• Mobile phones and telecom towers go flat
• Standby generators run out of diesel
• Transportation grinds to a halt
• No water in the taps
• Social unrest and looting spreads
• Infrastructure theft and vandalism
• Anarchy.

He presented three national blackout scenarios, which will determine the severity of the consequences that follow:-

Scenario 1 – OPTIMISTIC – First up in 2 hours; last up in 1 week.
Islanding of key power stations works perfectly
No failures in restoration, which works perfectly
Impact of civil unrest and looting not a factor.

Scanario 2 – REALISTIC – First up in 2 hours, last up in 2 weeks.
Some failures in islanding and restoration
Hampered by some unrest and looting but no electrical infrastructure damaged.

Scenario 3 – PESSIMISTIC – extended blackout lasts up to 4 weeks.
Blackout takes place at same time as Eskom labour and/or civil unrest
Significant islanding failures and major logistical reconnection issues
Line, cable, switchgear, transformer and electrical infrastructure theft and vandalism.

While businesses (and private households) should have some contingency plans in place to mitigate the consequences of a blackout, the focus of our efforts should rather be on taking control of our own energy requirements.

“The agricultural sector (including forestry) has a key role to play and should announce measurable, new self-generation targets … You are the solution, you need to take responsibility for your own energy requirements,” he concluded.