So far this year, Eskom’s failing power stations have caused South Africa to experience an annual record over 180 days of power cuts, and before the end of 2022, loadshedding could exceed 200 days.
These escalating power cuts devastate the economy, causing billions of rand in production losses and threatening jobs when there is already an unemployment rate of more than 30% and high poverty levels.
In addition, Chris Yelland, the managing director of energy consultancy EE Business Intelligence, told Sunday World that Eskom’s power cuts also resulted in lost business opportunities, less investment and lower tax revenue for the government’s coffers.
Eskom’s unexpected implementation of stage 6 loadshedding this week has triggered fresh calls for the power utility’s CEO, Andre de Ruyter, and his executives to be fired.
Pressure is mounting on Public Enterprise Minister Pravin Gordhan to get rid of the Eskom top brass after the severe breakdown of power plants this week wreaked further havoc to the economy and destabilised normal lives.
Black Business Council CEO Kganki Mataboge said it was time for De Ruyter and Eskom chief operating officer Jan Oberholzer to be shown the door as fears deepened the country could plunge further into stage 8 loadshedding. “The executive leadership of Eskom, in particular the CEO and the COO, have failed to keep the lights on and improve the electricity availability factor. For example, this year, the country has experienced the highest number of loadshedding in the history of Eskom. As such, there is no
logic or data there to support them. They must be fired immediately,” he said.
“We have on numerous occasions called for the removal of the CEO. He has proven his incompetence beyond doubt. Our position has not changed,” he added. Matabane said history would judge those who are protecting the Eskom management harshly as they were collapsing the economy. Big business can afford generators, but small and medium enterprises can’t.
Power blackouts were the biggest risk for economic recovery of the country, he said, adding that “Eskom is taking the country towards a failed state”.
Eskom this week said it had experienced 179 days of loadshedding up to 5 December. The power utility has seen an exponential increase in power cuts since 2018, when it had 15 days of power cuts. In 2019, the power utility had 30 days of power cuts, 54 days in 2020 and 75 days in 2021.
The amount of energy production the power utility shed this year due to power cuts up to 5 December is an mind-boggling 6,337-gigawatt hours (Gwh), more than triple the 1,775 Gwh shed in 2021. In 2018, Eskom shed 217 Gwh.
“Eskom’s plants are performing poorly. The old plants are getting older, and its new plants are battling too,” Yelland said. In addition, he said the government’s procurement of renewable and other energy from the private sector was floundering.
“Until South Africa brings on new generation capacity, Eskom won’t get out of its hole,” Yelland said. “The only way to reduce loadshedding in the next two to three years is for domestic commercial, industrial, mining and agricultural power users to build their own power generation. This is because public procurement processes take too long,” he added.
As a result of Eskom’s inability to generate power from its coal-fired power stations, it has turned to its diesel-burning open-cycle gas turbines (OCGT) to plug the gap. However, burning diesel to generate power is more expensive than burning coal. As a result, from the start of Eskom’s 2023 financial year in April to the end of October, the power utility spent over R11bn on diesel, which amounted to double the budget for the whole of the Eskom’s 2023 financial year, Yelland said.
In November, Eskom said it would stop using its OCGTs because it had no money to run them. Yelland said Eskom’s decision to stop using the OCGTs removed 2,000 megawatts of power generation from its grid.
“This means that [Eskom’s loadshedding] moves up to two stages over and above the previous loadshedding level,” Yelland said. Another danger is Eskom operated its OCGTs for extended periods, but they are not designed for that. Yelland said
Eskom usually used its OCGTs for two purposes. First, Eskom uses them to top up its power generation during daily peak consumption, usually from 5pm to 7pm. Second, Eskom uses OCGTs in times of emergency to boost its power generation.
However, he said Eskom had been running the OCGTs way beyond these two functions, placing the power system at risk by potentially not having standby emergency capacity.
Eskom turned to the government earlier this month to provide it with a further R19.5bn so it can buy more diesel to run its OCGTs. But, so far, Finance Minister Enoch Godongwana has said the government does not have money for more diesel.
However, pressure is mounting on him to assist Eskom. Big business made its voice known about the topic on Thursday.
In a joint statement, the Energy Council of South Africa, Business Unity South Africa, and Business Leadership South Africa expressed their concern about loadshedding. “Loadshedding is hugely detrimental to our economy and all citizens.
“We call on the government to fund adequate and reliable diesel supply for our national peaking generators, which are critical to ensuring that Eskom can best manage a stable grid and mitigate further escalating loadshedding levels.
“Although this is a short-term measure, it is an important bridge for the ongoing maintenance work and unplanned outages over the next six months,” the business bodies added.
Later on Thursday, the National Treasury also issued a statement, saying Godongwana was acutely aware of the impact Eskom’s diesel shortages were having amid already severe loadshedding. “National Treasury will continue with engagements with the department of public enterprises and Eskom to identify solutions to this matter.”
Minerals and Energy Minister Gwede Mantashe this week intensified his criticism of Eskom’s leadership. Mantashe told the audience at the signing of 13 new independent power projects on Thursday that Eskom had to fix its operational problems.
He said in his view loadshedding could be addressed by six months of focused maintenance. “Eskom, by not attending to loadshedding, is actively agitating for the overthrow of the state,” he said.
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