Minister for the Department of Public Enterprises, Pravin Gordhan, says that power utility Eskom is taking urgent steps to improve the performance of generation.
Presenting his Budget Vote for the 2022/23 financial year, Gordhan said that Eskom’s generation is under-performing with the Energy Availability Factor languishing at 58% YTD, as opposed to a target of 75%. The EAF has significantly deteriorated markedly over the past five years from 78.61% in 2017.
The reasons for the poor performance are well known, he said. His comments come as Eskom on Friday announced yet further load shedding for the weekend due to the continued shortage of generation capacity.
“Stage 2 load shedding will be implemented from 17:00 until 22:00 tonight. Loadshedding will be repeated at the same time on Saturday and Sunday evenings,” it said in a statement.
The state company pointed to 3,405MW on planned maintenance, while an additional 15,534MW of capacity is unavailable due to breakdowns.
Eskom estimates it needs 4,000 – 6,000 MW of additional capacity immediately if it is to properly maintain its power stations. “This will allow it to take units off-line for repair while maintaining a supply of electricity,” said the minister.
“Bid Windows 5 and 6, as well as the RMIPPP, will, at best, deliver an effective 3,000MW which alone will not create the buffer needed.
“The president’s announcement of the lifting of licensing restrictions on own generation to 100MW will undoubtedly assist the position. However, red tape is holding up the development of these projects.”
Recently, Eskom has opened up land it owns in Mpumalanga for long-term leases to renewable energy developers, said the minister.
Gordhan said that daily production and oversight meetings are held to hold power station management accountable for performance. “An operations excellence initiative is also in place which to identify the major causes of underperformance and to make improvements.
“At selected power stations war rooms will be set up to ensure that production challenges get tackled in a systematic way.”
The minister said that a skills mentoring programme using highly experienced power station managers has been launched. “This team will be deployed to power stations where load losses are particularly severe.”
Contractors are held accountable for direct improvement in the EAF as a result of the work undertaken, Gordhan said.
Upgrade skills & training
The minister said that a lack of engineering and technical skills and experience in Eskom remains a significant challenge. “These are pre-requisites for a major industrial operation like Eskom.”
The power utility has introduced a new training programme at its Academy of Learning to upgrade skills.
Coal quality and sabotage
The minister said that poor coal quality, which is often caused by syndicated coal delivery is causing major damage to plants. Eskom is seeking collaboration with the coal mining industry to solve this problem.
Sabotage also continues to be a problem. For example, Eskom yesterday announced it had discovered cut cables and tubes which caused a breakdown at Tutuka power station, he said.
“Several syndicates are involved in the delivery of coal, oil, and other supplies, including spares. Measures are being taken to identify the insiders enabling syndicates to gain access. Measures are also being taken to eliminate overpricing and other malpractices.”
The legal separation of the Transmission business has made good progress, said Gordhan. Key asset transfer agreements are signed, a legal entity is registered; and engagements are underway with lenders for their consent to the unbundling.
“However, enabling amendments to the Electricity Regulation Act, as well as a new Electricity Pricing Policy, need to be approved as a matter of urgency,” he said.
Addressing the Black Business Council Gala Dinner on Thursday evening, president Cyril Ramaphosa said that the electricity landscape is being fundamentally transformed through changes to the licensing threshold for new generation projects and the opening of new bid windows for renewable energy.
“The process of unbundling Eskom is on track, with the entity meeting its December 2021 deadline for the establishment of a national transmission company. By December this year we hope to complete the unbundling of Eskom’s generation and distribution divisions,” he said.
One of the critical components of transforming the electricity landscape is forging ahead with the transition to a low-carbon, climate-resilient and inclusive economy, the president said.
“We are working on the details of the just transition partnership concluded with France, Germany, the United Kingdom, the United States, and the European Union late last year.”
“Reducing emissions in line with our international obligations is imperative.”