Eskom warns coal suppliers that it might not meet contractual obligations

Power utility Eskom has notified its coal suppliers that due to a drop in demand amidst the nationwide lockdown, it could declare force majeure, meaning it will not be able to fulfill its contractual obligations.

Eskom says it has put some generation units out of service.

It adds that it anticipates demand to increase once the lockdown has been lifted.

Exxaro Resources has confirmed that its subsidiary Exxaro Coal, had received letters calling force majeure on the coal supply agreements for the supply of coal to Eskom’s Medupi and Matimba power stations.

However, Exxaro, which is one of Eskom’s main coal suppliers, says it does not view a drop in demand as reason to declare force majeure as the power stations were still capable of supplying power.

Excess in power supply due to lockdown

Eskom says it has an excess in electricity supply due to lack of demand due to the nationwide lockdown.

The power utility says they have taken some generation units off the grid, however, it will be available should the need arise.

In a statement, the utility has also announced using this downtime to carry out critical repair and maintenance work.

“We are also taking advantage of this downturn to carry out critical repairs and maintenance in our power stations and infrastructure.”