Indebted Eskom faces higher nuclear project costs, diesel usage

Eskom may need to spend as much as R2.4 billion a month on diesel to keep turbines running and will have to update the cost for work being done at its nuclear plant.

The “worst-case scenario” to run units that burn diesel, originally designed only for peak demand periods, would result in a fuel bill of almost R29 billion a year, the state-owned utility said in a presentation to lawmakers on Tuesday.

The potentially higher costs add to the company’s woes as it struggles to meet South Africa’s electricity demand and is implementing controlled blackouts. It’s already R413 billion in debt and needs funding to fix an unreliable fleet of aging coal-fired stations.

Eskom also outlined delays to a steam generator replacement project at the Koeberg nuclear plant, which had been among its best-performing stations. The original cost estimate of R20 billion for the work “was done in the 2010 parameter,” according to the presentation. “If reassessed in today’s values, it would be significantly different.”

Foreign-exchange costs will also be affected by the “extended project duration” for Koeberg, Eskom said.