The first thing you need to know about the Eskom diesel crisis is that Open Cycle Gas Turbines(OCGT)are jet engines that run on diesel. The second thing you need to know is that OCGTs are perfect for backup generation because they get up to peak generating operation quickly.
But the most important thing you need to know about OCGT is that it’s the actual secret sauce behind the City of Cape Town’s ability to shield its customers from the worst of loadshedding.
Yes, South Africa’s self-proclaimed “best run city” tells the public that Steenbras pumped storage hydroelectricity – a big water-based battery above Gordon’s Bay – is what is keeping the lights on but burning diesel to the tune of R440 000 per day plays a significant role in the DA-run city’s shade on the national power utility.
Eskom – which operates the much larger, and a decade younger Palmiet pumped storage hydro facility, mere kilometres away from Steenbras – uses the same system to guard the grid from peak demand strain. Unfortunately, the 2022 surge in diesel price and other market forces has seen operating costs of OCGT spiral out of control.
It’s November and the full diesel replenishment budget has been spent for the year.
/replenish reserves/Electricity generation speak for “we need to buy more diesel”
What caused the spike in the diesel price?
Russian soldiers traipsing around the Ukraine countryside with heavy war machinery had a major impact on the global diesel price for a strange concoction of reasons.
Natural gas was already expensive at the close of 2021, and it being a key component to produce the hydrogen that is used to remove Sulphur from diesel meant that the price of diesel increased.
Suspected sabotage on the Nord Stream pipelines has put additional pressure on the price of diesel, with Europe hoarding the energy source ahead of expected shortages in winter.
The main low Sulphur oil production in Nigeria and Angola is at capacity, which means the crude form other OPEC+ suppliers is used to fill the gap – requiring more hydrogen refining to meet increased post-pandemic transport demands and EU emissions regulations.
South Africa has also doubled its refined fuel imports since 2020 amid multiple refinery closures. This means that the country is heavily exposed to international market volatility.
How is this an Eskom problem? The power utility has been buying diesel at market rate which has put pressure on its business operations. Which is a bigger problem given the intensifying rotational load shedding schedule to protect the national grid from cascading failure should electricity demand exceed supply.
These facts by no means exonerate the cash strapped electricity provider of previous mismanagement, but a diesel shortage deserves more sensitivity to market conditions than some of South Africa’s leading energy analysts are giving.
Minister in the Department of Public Enterprises, Pravin Gordon – a longtime supporter of the transition to cleaner energy sources – has since met with the Eskom board and promised the country that funds will be found to continue supplementing the strained generating fleet with OCGT.
