Eskom extends power cuts as De Ruyter takes the reins

Eskom, which generates about 95% of South Africa’s electricity, extended power cuts that started on 4 January until Monday after a conveyor belt failure at its Medupi plant — just as André de Ruyter officially takes over as head of the cash-strapped company.

Eskom extended stage-2 load shedding to Monday at 5am, the utility said Sunday in an e-mailed statement. That means the company is removing 2GW from the national grid. The resumption of power cuts, which have stunted growth in the economy, illustrates the challenge facing De Ruyter, who left packaging company Nampak earlier than originally scheduled to start at Eskom following an urgent request from cabinet.

“Owing to inadequate maintenance over a number of years, the system remains vulnerable to unplanned outages,” Eskom said in its statement. De Ruyter, who is expected to begin formal duties at the company on Monday — earlier than the originally planned start date of 15 January — is tasked with turning around the debt-laden power utility, which has been described by Goldman Sachs Group as the biggest threat to the economy.

The Medupi plant is one of two massive coal stations under construction that are years behind schedule. The new builds, which are costing double the initial budget, have been found to be defective, while the remainder of Eskom’s power station fleet is poorly maintained and prone to unplanned outages.

Businesses return from a holiday break by mid-January, increasing the demand for electricity. “The system remains constrained and vulnerable, and as such load shedding stage 2 will unfortunately have to continue,” Eskom said.  — Reported by Paul Burkhardt, (c) 2020 Bloomberg LP