(This article was first published in Sunday Times: Business Times)
IN the last days of 1979, a fault occurred at an Electricity Supply Commission (now Eskom) power station. A local substation circuit breaker tripped. Due to a miscalculation, however, the circuit breaker was not set correctly and further circuit breakers tripped.
In turn, these caused further trips until 76 circuit breakers had tripped, interrupting the flow of current in many of Eskom's main power lines.
Thirty-five minutes after the initial fault, the only power station still connected to the grid was Wilge, the main power supply for Iscor. But Iscor's steelworks had tripped due to underfrequency. With the steel freezing in the furnaces, Iscor reclosed the circuit breakers onto the Eskom grid. Overloaded, Wilge shut down.
Apart from some municipal power stations, the whole Eskom system was down. Lacking remote control facilities and communicating via landlines, Eskom staff worked over the next 36 hours to restore power.
A failure of this magnitude had never occurred. During the 1970s, then-Eskom CEO Jan Smith and Eskom planners calculated that generating capacity had to double every 10 years. Besides Lethabo and Tutuka power stations, which were already under construction, new facilities Matimba, Kendal and Majuba were brought into the mix. Other construction included four more power stations, a nuclear power station and a pumped storage scheme. The construction had to be financed by raising electricity tariffs, in 1976 (twice), 1977 and again in 1981.
Eskom was deeply unpopular, but its engineers had little time for politics. The government was pushed to act. The De Villiers commission was set up to investigate, the net outcome of which was to retire Smith in 1985. Ian McRae replaced him.
At this time a seemingly small event occurred. In 1986, a new department was formed: marketing.
The year before, Eskom had revised down its demand projections and realised that it was building more generation capacity than seemed required. Some of the construction could be deferred. In 1987, Eskom announced that it would continue with construction and mothball or shut down older, less efficient power stations. By 1991 Inhambane, Camden, Grootvlei and Komati, and two others, a total of 5000 mega-watts, had been mothballed. Nobody in 1985 foresaw the new South Africa.
Future demand looked set to grow slowly. In 1990, there was widespread unrest. The reserve margin of demand over available capacity soared to 38%. The prudent approach would have been to sit it out until the demand rose. But then the marketing people went to work.
They offered municipalities cut-price rates, provided municipalities shut down their own power stations. Oil refineries were incentivised to use electrical motors and "off-peak" tariffs were offered to people who could use power out of normal working hours. Farmers, who had for years used diesel generators, signed up to become connected to the grid.
The marketing department was not quite done. It noted that there was an aluminium smelter in Richards Bay, the Bayside smelter. Could one make another smelter, bigger, which would suck up power from Eskom? A consortium created the Hillside aluminium smelter that would use about 1,000MW of power.
By 1998, Eskom had shed 3,850MW by closing power stations and had committed itself to supply 1,000MW for Hillside and a further 1,000MW for Mozal. That's 5,850MW. Majuba was coming online, but its 3,843MW was still about 2,000MW short of what Eskom had shut down or committed to. Still the marketing department was not finished. It persuaded industrial steam consumers — SAB and paper mills — to shut down coal boilers and install electrode boilers. The incentive was dirt-cheap power.
So despite Cahora Bassa power with 1,900MW due to come online, and plans for a pump storage scheme at Braamhoek (four times 333MW), with the prospect of demothballing Camden, Komati and Grootvlei power stations, Eskom still needed new power stations.
Even a white paper presented to the cabinet in 1998 did not prompt the government to institute new generation projects. A group of engineers wrote to Eskom and asked what the utility would do for power in 2007, when supply ran out. The letter was never acknowledged.
It was clear Eskom would run out of power in 2007. Nobody in the electrical engineering fraternity thought that Eskom or the government would wait until the system crashed. But in 2005 blackouts began.
Eskom quickly announced the construction of new power stations Medupi, which began in 2007, and Kusile. The ANC owned 25% of the chosen boiler supplier, Hitachi. Welding on the boilers failed tests. The boiler software failed acceptance tests and the construction fell behind. Finally, boiler construction and software were subcontracted. Eighteen months behind schedule, Medupi will produce its first power in a few months; it will take three years to reach capacity of 4,800MW.
Renewable energy projects set up by the government now provide about 3,922MW. But no renewable scheme can operate 24 hours, so it has a limited effect. For peak demand, two gas turbine stations were installed in 2008, which consume very high levels of gasified diesel.
The future power supply can be solved by coal or nuclear power stations coupled with hydro pump storage schemes. There are coal reserves of 53-billion tons, enough for 200 years of consumption at present rates. The existing open-cycle gas turbines should be supplemented with gas turbines burning heavy fuel oil, of which there is abundant supply. Coal supply mines should be responsible for delivery to ensure that the coal is actually delivered and on time. Gas imports from Mozambique should be accelerated.
In the immediate short term, a system such as that used in France in the '80s should be instituted: consumers choose the option of being load-shed at any time in exchange for a reduced tariff and any consumer who can generate into the grid should be encouraged to do so.
It is hard to predict if, Eskom-wise, this is the end, the beginning of the end or the end of a new beginning. Eskom has made all the mistakes it could possibly make in the past 30 years. There is no reason to continue to make more.
• Mackenzie-Hoy is a consulting engineer in private practice.
• This article was first published in Sunday Times: Business Times