Photo: (Dean Hutton/Bloomberg/Getty)
Eskom projections show a considerable increase in spending on independent power producers over the next five years, compared to the average spend increase in maintenance.
The power utility appeared before the National Council of Provinces (NCOP) on Tuesday afternoon on its immediate to medium-term solutions to load-shedding and its budget for maintenance compared to independent power producers.
Outgoing chief executive André de Ruyter reiterated Eskom’s aim to add 1 862 megawatts to the power grid by the end of next month. The entity plans to achieve this by prioritising maintenance at six power stations — Tutuka, Duhva, Majuba, Kusile, Matla and Kendal.
However, the company’s turnaround plan to recover its energy availability factor from the current estimate of 58% to 60% by the end of the current financial year will not be achieved, said De Ruyter.
He explained that Eskom can boost its energy availability factor by 10% if they suspend planned maintenance and consequently risk the reliability of the national power system.
“The minute we do that, we will significantly impact the reliability of the plant going forward, and this is what has happened in the past. If we allow this to happen again, the situation will just become worse.”
South Africa saw a slight reprieve of rolling blackouts this week as Eskom maintains stages three and four after implementing stages five and six last week.
De Ruyter told the NCOP that the utility projects an increase of 18.2% in its spend on independent power producers (IPPs) over five years. Eskom recorded a major increase in its spend on external power producers in the past year, from 36.7% in 2022 to 49.2% in 2023.
“We will buy significantly more electricity from IPPs as they come onto the grid,” noted De Ruyter.
Meanwhile, the utility said despite the spending increase on power producers, it is not cutting on its budget for repairs and maintenance as it has gone up “quite substantially” from 2020.
Overall maintenance spend is forecast to grow at an annual estimate of 9.5%, just over half the estimated growth of Eskom’s spend on IPPs over five years.
In terms of maintenance spending in previous years, De Ruyter remarked: “It makes it clear we are growing our maintenance spending, rather than cutting back on it. This is exactly what you can expect from a fleet that is ageing”.
Aside from its budget, De Ruyter updated the NCOP that there have been multiple successes by law enforcement agencies to clamp down on corruption and theft at the power utility.
At the end of last month, De Ruyter told parliament’s standing committee on public accounts that power instability is threatened by corruption, especially on its coal fleet.
On Tuesday, he confirmed 25 arrests and the closure of three illegal sites where coal to power stations is replaced by low-quality coal, causing damage to Eskom plants. The police are in the process of targeting an additional 30 similar illegal coal sites.