The government’s support for coal-fired power and reluctance to transition to renewable energy undermines potential for economic expansion and job creation in the renewable energy sector. Photo: Waldo Swiegers/Getty Images
Eskom released its financials on Tuesday. The search for a new chief executive continues; City Power will take over the management of load-shedding in Johannesburg and Koeberg nuclear power station is still dealing with delay after delay.
Let’s take a closer look at the embattled state-owned enterprise.
Eskom announced a staggering loss of R23.9 billion for the financial year ending March 2023.
The losses were in part attributed to increased load-shedding, municipal debt and spending on diesel for open-cycle gas turbines, which more than doubled in this financial year compared with the previous one. Other reasons included criminal activities and irregular spending.
The losses come despite a tariff hike.
The year also recorded more days of load-shedding — 280 — than the previous one — 65.
The losses were attributed to the energy availability factor of only 56.03%, down from 62.02% the previous financial year.
Another announcement was a municipal debt of R58.5 billion compared with R44.8 billion the previous financial year.
Koeberg has been struggling with maintenance. Unit one, which adds 980 megawatts to the grid, was supposed to come online in June. It’s still offline because maintenance has been delayed. The steam generators needed replacing, a task more arduous than expected.
Electricity Minister Kgosientsho Ramokgopa was concerned that unit two also needed maintenance work and if both were out of order, load-shedding would be exacerbated. Unit one is expected to be functioning by 3 November, which should allow unit two to undergo its maintenance on 7 November. Unit two also requires the replacement of its steam generators.
Ramokgopa, in a recent energy update, said that if both units were not functioning the good work Eskom has been doing to reduce power cuts would be at risk.
He also said it would undermine the strategy of diverse energy sources.
City Power, which is wholly owned by the City of Johannesburg, will now handle load-shedding in most of the metro, taking over from Eskom.
It has promised to keep power cuts to two-hour slots no matter the load-shedding stage because people struggled with more than four hours of no electricity. The takeover starts on 6 November.
Eskom will still manage certain areas of Johannesburg because of system technicalities.
City Power regularly attends to calls dealing with prolonged power cuts caused by ageing infrastructure and struggles to restore power after power cuts.
Eskom struggles on other fronts as well. The power utility still needs a new chief executive and board, which has seen chairperson Mpho Makwana stepping down. Public Enterprises Minister Pravin Gordhan has voiced his discontent over candidates, including Dan Marokane. The constant back-and-forth has left the utility without permanent leadership.
Elsewhere, the process of splitting Eskom into three companies — generation, transmission and distribution, as outlined by the Eskom roadmap in 2019 — still hobbles on. Transmission, thus far, has been granted one of the three licences it requires before it can operate.
When asked about this, Eskom told the Mail & Guardian: “It is Eskom’s understanding that Nersa [National Energy Regulator of South Africa] has subsequently been evaluating the applications and are following their governance processes to conclude on their decisions.
“It is anticipated that Nersa will grant all applicable licences required for the national transmission company to operate the transmission business by quarter three of the current financial year,” it said.
Eskom has a tender out for the design of a new logo and corporate identity. This has been slammed by people everywhere, including the Democratic Alliance, naturally. In light of the power utility’s record financial losses, one can see why this move has drawn criticism. The amount for the tender has not been announced, but surely that money would be better spent elsewhere.
During last week’s energy update Ramokgopa complimented Eskom and its work in reducing load-shedding. The way it looks is that we’ll have more load-shedding over the next financial year and that Eskom has a long way to go before it is operating optimally.