Workers near generators in the turbine hall at the Kusile coal-fired power station in Delmas, Mpumalanga province. Photo: Waldo Swiegers/Bloomberg via Getty Images
The National energy regulator of South Africa (Nersa) has called out Eskom for blowing more than half of its quarterly budget for diesel for the first quarter of the 2024-25 financial year in just one month.
Eskom has averted load-shedding from late March to date — 44 straight days of continuous power — which Electricity Minister Kgosientsho Ramokgopa partly attributed to last year’s ramped-up maintenance of power stations.
But information which Nersa has supplied – as well as comments from industry experts – suggests this is also because the power utility has been burning more diesel — which is only supposed to be used as an emergency because of its costliness — than usual.
Nersa regulates Eskom’s diesel allocation for open-cycle gas turbines (OCGT), managing pricing, distribution and usage. It also sets prices and issues licences to suppliers.
To keep the lights on, Eskom has already hit 168.5 gigawatt hours (GWh) of the 316.5 Gwh of electricity that it is allowed to produce using diesel for the first quarter April to June, Nersa’s head of communications Charles Hlebela told the Mail & Guardian this week.
Diesel is used to power open-cycle gas turbines at Ankerlig and Gourikwa power stations, which have a combined energy generation capacity of 2 000 megawatts, enough to avert stage two load-shedding.
According to Nersa’s allocation, Eskom can generate 1 266 gigawatts-hour (Gwh) of electricity using emergency reserves of diesel for the entire financial year ending March 2025. This translates to 405 120 litres of diesel for the year.
Hlebela said it was important that Eskom maintains an energy availability factor of 63.25% to keep load-shedding at bay. The EAF measures the performance of the power utility’s generating plants.
“Having a high energy availability factor will also mean that plant breakdowns are lessened, therefore there is no need to use so much diesel,” Hlebela said, adding that should Eskom not adhere to its allocation, Nersa would review the allowance.
Nersa’s comments are contrary to Ramokgopa, who told a recent media briefing that Eskom had been using less diesel for generation.
“Starting 1 May, we have not been burning the diesel. A considerable part of April we have been burning a significantly lower amount of diesel, and still, we don’t have load-shedding. The last time we were burning this diesel we had load-shedding. The only answer can be found in the fact that these machines are performing better,” the minister said.
Critics, including opposition parties, suggest the utility has caved in to political pressure to keep the lights on at all costs ahead of highly contested general elections on 29 May.
This is the longest period without power cuts since 2021. Over the festive season (15 December 2023 to 2 January 2024) South Africa experienced 18 straight days without load- shedding, following a 20-day streak in the winter of 2022.
Eskom insiders this week told the M&G that the utility’s diesel costs were edging towards R7 billion within the first month, with one official who declined to be named linking this to political pressure related to the elections.
“We have been drawing from everything now. The questions the media should have asked the minister [Ramokgopa] is if indeed the system was functioning as well as they are, why then are we overdrawing from our hydro plant and overusing the OCGT?” they said.
In January, the utility denied being under pressure to suspend load-shedding ahead of the vote, telling the M&G: “Eskom has no plan to suspend load-shedding during elections’ month since load-shedding is not implemented as a selective response but as a response to protect the grid from collapse. Load-shedding can only be suspended if supply meets the country’s electricity demand.”
This week, Eskom said: “In April 2024, Eskom spent R1.1 billion on OCGTs, producing 167.8GWh. This is about 60% less than April 2023 when R3.1 billion was spent to produce 470.22GWh. The OCGT load factor for April 2024 decreased significantly to 6.8% compared to last year’s figure of 19.13%.”
Former Eskom chief executive André de Ruyter, who left the utility acrimoniously in 2023 after alleging corrupt political interference in its running, told a conference this week that the only reason load-shedding had abated was because diesel was being burnt at an excessive rate.
“The budget for this year for diesel is R24 billion. That’s four times what we had at our disposal. So if the lights are on, well done. But they’re on because we are pouring money into diesel at a rate of knots,” he said.
Energy analyst Tshepo Kgadima said it was questionable that Eskom was drawing excessive megawatts of energy from diesel and 1 000MW from its hydro plant this week despite achieving a 65% energy availability factor. “The situation in the power plants is not as rosy as they announce it to be. If you have an EAF of over 60%, then there is no need to draw so much energy because you have a surplus.”
Eskom’s diesel expenditure came under fire last week after Public Enterprises Minister Pravin Gordhan, in a parliamentary response to the Democratic Alliance (DA), said the utility had spent R65 billion in a five-year period.
DA public enterprises spokesperson Mimmy Gondwe said this equated to more than R1 billion of diesel spending a month over five years. “Burning copious amounts of diesel at such unprecedented levels is unsustainable and partly explains why consumers were hit with double digit tariff increases by Nersa.
“This means that consumers are being asked to subsidise Eskom’s failures as the entity burns more diesel to maintain an illusion of improving power supply. With this latest revelation, Minister Ramokgopa’s claim that Eskom has turned a corner is completely false because burning diesel can never be a permanent solution to the load-shedding crisis.”
A previous version of this story indicated that Nersa had explicitly said that a halt in load-shedding was due to the burning of more diesel. This is incorrect. We regret the error.