Eskom is in dire straits: These numbers show why

October 26, 2021 Siyabonga Mtangana

This, together with three major incidents – one every month since August – has contributed to the load shedding every night since last Saturday and which is set to continue until at least the weekend.

This was revealed at Eskom’s quarterly system update where Eskom executives showed a brave face in light of a further deterioration in plant performance and a worrying outlook.

In the absence of its CEO Andre de Ruyter, who is in Europe for the Cop26 climate conference, Eskom’s chief operating officer, Jan Oberholzer, admitted that it is taking longer for the “reliability maintenance” announced early last year to show results.

Oberholzer repeatedly apologised for the current and recent load shedding.

On Sunday the plant availability was at a mere 58.5% against a target of 70%. The average so far for the current financial year is 65.3%, which compares poorly to the previous year’s 67.9%.

In the meantime, the utility is using its diesel-gobbling open-cycle gas turbines (OCGTs) extensively to keep the lights (mostly) on. According to Eskom group executive for generation Phillip Dukashe, the utility has so far this year produced 772GWh with its own OCGTs, against a provision for the full year of 211GWh. It indicates a load factor of 7.3% at year-end against a target of 1%

OCGT bill

So far, the OCGT bill is at R2.5-billion. This makes it increasingly difficult for the cash-strapped state-owned enterprise to make money available for maintenance, he explained. Accordingly, the generation performance is rapidly deteriorating.

So far this year, Eskom has experienced 342 unit trips against a target of 196, 4.61GW of load losses against a target of 3.97GW and 23.1% unplanned load losses against a target of 18%, Oberholzer said.

Dukashe said he was shocked when a new power station manager, appointed in February, recently took him on a tour of Tutuka, situated near Standerton. “I used to work at Tutuka. I could not believe the shocking state it is in,” he said.

Eskom spokesman Sikonathi Mantshantsha added that all six units at Tutuka, each with a capacity of 609MW, were in operation two weeks ago “for the first time since 2019”.

Dukashe showed that Tutuka has been the single biggest contributor to unplanned breakages so far this year.

Station contribution to total UCLF FY2022 30 September YTD – 23.14%. Source Eskom

The three major incidents have jointly further reduced the available generation capacity by more than 2GW. These are:

An explosion at Medupi unit 4 (720MW) on 8 August, just a week after the whole power station was completed and finally handed over. A preliminary investigation report has been submitted showing Eskom staff deviated from prescribed procedures. The generator, turbine and auxiliary plant were damaged and the unit could be offline for as long as two years.
A fire at Kendal unit 1 (640MW) on 11 September resulted in damage to the civil structure. It is expected to return to service by December. The cause of the fire is not yet clear, but Eskom is looking into possible design defects.
On 24 October, Koeberg unit 1 (920MW) tripped for the second time after returning to service on 3 September following a 75 day outage. Oberholzer gave the assurance that there is no nuclear danger, but added that Eskom is “extremely concerned why there have been two trips on unit 1 after a very long outage”.

In the meantime, the maintenance programme punted to reduce load shedding is lagging.

Dukashe explained severe challenges to the reliability maintenance programme that is aimed at correcting years of neglect and over-utilisation of the generation fleet.

Of the 84 outages scheduled for the year ending 31 March, only 18 have been completed and a further nine are in progress. Another 22 have been deferred to later in this financial year, and 10 to the next financial year, which leaves 25 remaining.

He explained that proper planning before a major outage is crucial. Some spares must be ordered 24 months in advance. If the budget is not available or the release of the money to the generation unit is delayed it impacts not only the specific unit, but also the whole maintenance programme.
Eskom has budgeted R8.5-billion in the current financial year for running maintenance and a further R8-billion for outages.

Oberholzer said this must be seen against the backdrop of Eskom’s R400-billion debt burden, which has left it with huge interest payments and a liquidity crisis. Chief financial officer Calib Cassim therefore has to carefully assess competing demands when allocating cash.

Dukashe further complained that procurement processes are hampering the maintenance programme as key long-term contracts have not yet been concluded but are carried on a month-to-month basis. He also said leadership at power station level is often lacking. Eskom has lost a lot of key skilled staff members and the necessary “vigilance and urgency” is often lacking.

Oberholzer confirmed that not enough progress has been made in improving Eskom’s procurement processes.

According to Dukashe the generation fleet is still unreliable and unpredictable. This is mainly addressed by mini-overhauls and general overhauls. It will take another three years before these have been completed at all the coal-fired power stations.