Huge struggle ahead to overcome Eskom crisis – Gordhan

As South Africa enters into its fifth consecutive day of load shedding on Tuesday, Eskom executives and public enterprises minister Pravin Gordhan said at a media briefing that while the country is “very far” from complete blackout, the situation is at crisis level and they cannot commit to an end date for the electricity cuts.

The South African public has often been left in the dark, for lack of a better description, around the reasons for load shedding and become frustrated with the lack of warning ahead of load shedding implementation. 

While tropical cyclone Idai was the root cause of the dramatic escalation of load shedding on Saturday (from Stage 2 to Stage 4 within a matter of hours), there are greater problems at play. Gordhan says that a special crew from the SANDF, combined with technicians, have been flying over Mozambique transmission lines (that carry power to SA from Cahora Bassa) and the pylons to hold up these lines to review their status. He says that further visits are planned over the next few days to assess the extent of damage. 

It is, however, the 11 units that are currently down at its SA-based power stations – and their lack of maintenance – that is the main source of problems for the power utility. Gordhan says that reports from the presidential task team, who developed the 9-point plan in 2018 for the utility, and feedback from independent engineers who are tasked with visiting the power stations themselves, is giving government and Eskom management a better idea of the problems power stations are facing and how they can be overcome.  

Eskom’s Medupi and Kusile mega power plants have been marred by problems and cost overruns, but other coal-fired plants are suffering severe problems owing to lack of maintenance, Eskom executives said. The latter, Eskom said, comes as a result of a lack of planned maintenance over the last five to ten years. Eskom chairman Jabu Mabuza said that after spending time ridding the utility of malfeasance, it became clear that there has been a significant reduction in maintenance over the years. This, he said, is incongruent to the plants that are ageing. 

According to general manager for systems operations Bernard Mogoro, Eskom’s coal-fired power stations are 40-55 years of age whereas most power plants get retired at between 30-40 years. “They have been driven hard and refurbishments need to take place or performance is compromised.” Chairman Phakamani Hadebe said the maintenance of these plants deteriorated substantially over the last 10 years and that during this period, maintenance spend saw a drastic reduction from R37 billion to R10 billion. So, the question therefore is where was the money spent? 

Gordhan and Eskom executives said that this issue is being pursued through law enforcement agencies and that the Zondo commission of inquiry and that South Africans can expect to receive further detail on malfeasance at the state-owned company in the coming months.

In the past, Eskom decided not to maintain new plants and rather build new ones. Mabuza noted, however, that the reality is that these plants have not come on stream fully and have not been able to produce required electricity. Costs for Medupi and Kusile have sky-rocketed due to design defects and many are wondering why these assets have not been disposed of. Eskom executives said on Tuesday that the average return on asset is 21% and that Medupi and Kusile are on the higher side of this return ratio. “We would be selling our most return-yielding units. We are, however, looking at what the impact would be of not spending more [on the units].”  

Meanwhile, Eskom’s COO Jan Oberholzer explained to media that the boilers, which feature in each generating unit and are used to heat water into steam for the electricity production process, are experiencing a high volume of tube leaks. He explained that the leaks are challenging to repair as the unit has to be shut down to cool before anybody or anything can get into the boiler. The tubes also run up to 100 metres in length.

Currently, seven of Eskom’s units are out of action due to tube leakages. “In the next few days, these units should be coming back online but this is biting us big time,” Oberholzer said. Speculation has circulated around potential sabotage of Eskom by those looking to undermine the new administration, and this was a question that was raised at the briefing (in relation to the tubes) but to which Eskom was not willing to respond on.

Eskom supplies more than 90% of the power in South Africa but around 17 000MW of Eskom’s installed capacity of 45 000MW is unavailable, Gordhan said. The lost 20 000MW is owed to the supply line being cut off from Cahora Bassa and units coming offline. When there’s not enough capacity to meet demand, load shedding is implemented.

Eskom has a breakdown allowance of 8 000MW but when this breakdown space increases so drastically, it eats through reserves and planned maintenance, Oberholzer explained. When this happens, it results in load shedding. “We use diesel and end up load shedding to meet demand.” This is far from ideal but Oberholzer says the problem is that there is no economical shortage facilities.

“We need to ban diesel on OCGT turbines; they were never intended to be used as base load,” Mabuza said. “Not only can the country not afford it, but there is no diesel in SA.” Refineries had made 25 million litres of diesel available to Eskom but it has now exhausted these supplies. Diesel is meant to be used as a reserve but is currently being used as a base load. In terms of Nersa regulations, Eskom is permitted to use 1% load factor usage of OCGTs – this translates to a cost of R600 million per year.

“However, over the last 3-5 months, given the problems we have experienced in terms of coal supply and unavailability of plants, we have spent over R5 billion in this time instead. There is a problem in terms of funding this gap,” Mabuza said.

The last resort, he said, is to load shed. “It’s not something that is taken lightly and we understand the pain and discomfort yet we do hope we will be able to reach a certain level of predictability.” So, how does the utility plan to fix the problems? Executives and the minister say time with the equipment is needed to maintain it. This involves assessing, procuring and implementing.

While the utility didn’t elaborate on the exact plan going forward, it said that routine ways will not be adequate to address this “crisis situation”. “We hope that with feedback from the technical team and 9-point plan task team, we can update South Africans on the situation.”  

Gordhan said that government, together with Eskom executive team, will come back to South Africans with an update in 10-14 days with an update on where things stand. “To lighten the burden on South Africans, we want to work more closely with municipalities, households and business to orchestrate schedules in a way that causes the least amount of damage.” 

This is not about pointing fingers at anybody. Today, we are faced with a crisis. We have been here before and taken steps to manage it for example by introducing energy-saving measures. We have to go back to the drawing board and come together as a nation.”