What’s the plan now, Eskom?

Eskom is once again asking South Africans to reduce demand, to use electricity sparingly. The power utility says that about 554 MW was saved during the recent Earth Hour event. But how was that power saved? Did the utility burn less coal? Did the power utility save any money?

Roger Lilley

The power utility really seems to have its back against the wall. It needs more money. It has received about half of what it wanted in tariff increases and RCA adjustments from Nersa and a lot smaller bail-out from government than it expected. Its primary source of income is from the sale of electricity, but it cannot supply enough to meet demand without running its incredibly expensive open-cycle gas turbines. Revenue from sales does not cover the utility’s costs which have been inflated by the amount it needs to service its mushrooming debt. Eskom needs to urgently reduce its operating costs, address its debt and get its new-build power stations working properly.

A large media contingent was invited to a power station tour and briefing recently. Although Eskom’s invitation did not state which power station we would visit for “security reasons” and, perhaps because Eskom’s invitation did not state which power station we would visit other than to say it was 90-minutes from Johannesburg by bus, many of us thought we would get to see the new Kusile power station in Mpumalanga. It seemed likely since Kusile has been the talking point for some time. After all, this power station, construction of which began in 2011, has only one of its six, 800 MW generating units operating and synchronised to the national grid. Significant cost and time overruns have brought this power station – together with its sister station, Medupi, and the national power utility, into disrepute.

However, it was not to be. Instead, once the media were on the busses (three of them), we were told that we were, in fact, going to visit the Lethabo power station near the Free State town of Sasolburg. Although Thomas Conradie, the power station manager, conducted us around the plant with great enthusiasm, this 31-year-old, 3700 MW coal-fired power station which comprises six, 618 MW units and draws 120 000 l of water from the Vaal River every day, was not very impressive, being a far cry from the modern power plant many of us were hoping to see. One wonders why, if the power utility wants to save money, it went to the trouble and expense of arranging this tour. The three-hour long media briefing which followed the tour could have been conducted – as it usually is – at the utility’s premises at Megawatt Park in Woodmead, Johannesburg.

Although we have been told that two additional units (one at Kusile and one at Medupi) would come on line soon adding about 1200 MW to the grid, and that the utility’s management team has a better understanding of the technical problems at Eskom’s power stations, we heard nothing more regarding the proposed restructuring of the utility. Not even a profile of the “restructuring officer” who would oversee the restructuring in terms of the government’s bailout package. Comments about “holding people accountable” seem empty too, given that everyone knows who the responsible people are: Former ministers of public enterprises, former CEOs and acting CEOs and the former CFO. To date, Eskom and the Department of Public Enterprises have remained quiet regarding the pressing of charges.

So, although we’re grateful that Eskom will attempt to prevent further episodes of load-shedding and despite the day-long visit to Eskom’s Lethabo power station and media briefing, we don’t have any reason to be confident that the institution is really addressing its problems and will soon be able to operate efficiently without further bail-outs or higher-than-inflation tariff increases.

Send your comments to energize@ee.co.za

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