Eskom warned that its maintenance plan must be supported by the government or South Africa can expect regular blackouts from power cuts of 8GW by mid-2021, a move that would cripple the economy.
Shortly after taking up the role in January, CEO Andre de Ruyter said more planned power outages will be necessary for the next 18-24 months so the company can catch up with deferred maintenance.
“We have to conduct these maintenance programmes if we are to avoid worse load shedding in future. The time for an intervention is now,” he said in an interview in Cape Town on 4 March. “The notion that we can keep the lights on at all costs simply means we will be kicking the can further and further down the road until the inevitable day of reckoning when the system really falls over will approach.”
De Ruyter took over Eskom at a time when the state-owned company is saddled with R454-billion of debt and isn’t generating enough revenue to cover its costs. Regular outages due to plant breakdowns have pushed the economy into a recession.
“If we do nothing, stage 8 will be a regular event by June 2021,” Eskom said, referring to an outage of 8GW, in documents submitted this week to the standing committee on public accounts, parliament’s financial watchdog. Outages at the moment are normally between stages 1 and 4, or 1GW to 4GW. The country consumes between 25GW and 35GW, depending on the time of year.
The Kendal, Duvha and Tutuka power plants — which have a combined generation capacity of 11.4GW — are in particular need of maintenance, according to the documents.
Could end power cuts
If allowed to proceed, the programme could end power cuts within two years, catch up delayed maintenance by fiscal 2023 and save R9.3-billion/year in costs by that date, it said. By the end of the 2022 financial year, Eskom could increase the amount of generation capacity it has available on average by between 4.5GW and 6GW.
Risks to the company’s generation capacity if nothing is done are partly due to the plants’ failure to comply with emissions rules. Plants could have their atmospheric-emission licences revoked temporarily, risking capacity of 4.5GW, and a total of 9GW is at risk if pollution-abatement equipment isn’t installed at a number of facilities, Eskom said.
In order to mitigate the effect of power cuts, Eskom is implementing a number of measures including less power cuts during periods of heavy traffic, and reducing availability more frequently between 9pm and 6am in the short term. More power cuts are expected in the winter months this year as “repairs take effect”.
The company also suggests cutting power first to areas where few consumers pay their bills, a politically explosive suggestion, as most of those would be in townships where some of the poorest South Africans reside.
In Soweto alone, 133 236 customers owe Eskom R16.9-billion, Eskom said. Around the country, a number of municipalities are in arrears to Eskom. — Reported by Antony Sguazzin and Paul Vecchiatto, (c) 2020 Bloomberg LP