Eskom starts maintenance with sustained power cuts

South Africa’s state-owned power utility changed its approach to fixing a coal-fired generation fleet prone to breakdowns by shutting units down long enough to improve their reliability.

The new strategy began Monday with Eskom’s announcement that it will remove 2,000 megawatts, known as Stage 2 load shedding, from the national grid until Thursday. Chief Executive Officer Andre de Ruyter said on Friday the company had approval to ramp up “philosophy maintenance,” in which generation units are serviced in adherence to prescribed schedules by the manufacturers.

Eskom, which supplies about 95% of the nation’s power, previously had a surplus of capacity. Regular overhauls of generation equipment were progressively bypassed, shrinking the margin of excess capacity. The utility has been cited as the biggest threat to South Africa’s economy because of its inability to provide a regular supply of power and its R450 billion debt burden.

De Ruyter’s introduction of sustained outages differs from the utility’s previous strategy, in which all available units, including those intended for peak demand, would be run as needed to stave off power cuts. When outages did occur, the public and businesses had little time to prepare for them.

Blackouts are estimated to have reduced South Africa’s gross domestic product by as much as R118 billion last year, according to the Council for Scientific and Industrial Research, a state research institute.

The introduction of “philosophy maintenance” means there is an increased likelihood of outages for the next 18 months, De Ruyter said on Friday. Eskom will also focus on fixing defects at new plants as well as “extending the life of operating units, reducing unplanned outages and managing coal quality and handling-related issues,” according to the plan.

© 2020 Bloomberg L.P.
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