Avatar photo

By Moneyweb

Moneyweb: Journalists

Load shedding in the air as Eskom restricts power supply

Apart from a dire coal supply, 11 of the 25 generations units at three power stations have been shut down due to a lack of money to fix them.

Eskom has shut down 11 power station units due for major maintenance because of lack of funds to fix them.

This comes as the embattled power utility is struggling to find coal to feed its coal-fired power stations – the bulk of its fleet. The power stations that have adequate supply are being run extremely hard, which could lead to more breakdowns and plunge the utility further downward.

Moneyweb earlier reported that 11 of Eskom’s 15 coal-fired power stations have less than the required 20 days’ coal stock. Five of the 11 have less than 10 days.

According to its latest forecast for the 14-week period from November 5 to February 10, 2019, Eskom is likely to have inadequate electricity for most of the time.

So it would be utilising expensive energy from diesel-driven turbines, including from Avon and Didisa, owned by independent power producers. When even that is inadequate to plug the supply hole, there will be load shedding.

Extensive use of diesel generators will increase Eskom’s financial headaches and give further momentum to the downward spiral. Eskom is expected to inform the public about this dire situation during a state-of-the-system briefing today.

It comes as the national energy regulator, Nersa, is awaiting written submissions on an Eskom application for a 15% tariff increase on April 1 next year and another 15% for each of the two following years. The deadline for submissions is November 30.

If Nersa approves the full revenue amount Eskom applies for, the 15% increase will be on top of a 4.41% increase already approved for April 1, 2019 as part of a four-year recovery plan for amounts under-recovered in previous years.

Eskom has submitted another application to recover R21.6 billion to compensate it for under-recoveries in 2017-18. If approved, any part of this that will be recovered in the next financial year would add to the percentage increase consumers would face in April next year.

This week, Eskom middle manager: generation Brad Ross Jones said Eskom has closed 11 of the 25 generations units at three power stations. That comprises almost half of the generation capacity of Grootvlei, Komati and Hendrina power stations.

The 11 units are in reserve storage, which means they can be restored to working order within a year, if there are funds to buy the spares and that they are available. He said some of the spares could have long lead times between placement of the order and delivery.

Ross Jones said when units reach a stage where operational cost is high, and they need major capital interventions, Eskom places them in reserve storage.

Eskom said it was not feasible to decommission power stations, as many recently suggested when Eskom had excess generation capacity. Decommissioning refers to the permanent dismantling of power stations.

Nersa shared this view and based its tariff determination for the current year on its view that Eskom should decommission its Arnot and Hendrina coal-fired power stations. Eskom is taking the Nersa decision on review in the high court.

Eskom said it could not decommission any commercial units unless it maintained an energy availability factor (EAF) of 78%, new build projects were completed within deadlines, renewable energy projects up to bid round 4.5 start delivering power commercially and assuming realistic demand growth and a 50-year life for coal stations.

So far this year the EAF of the Eskom fleet was on average 72.99% and in the past weeks it has deteriorated to well below 70%.

In the light of this and the possibility that other assumptions turn out differently, Eskom wants to retain Grootvlei, Hendrina and Komati in reserve storage as “insurance”.

Read more on these topics


Access premium news and stories

Access to the top content, vouchers and other member only benefits