Eskom gets diesel lifeline — but still no funding
State-owned oil company PetroSA has made 50-million litres of diesel available to Eskom, enough to last the power utility for about two weeks given the rate at which it has been burning diesel to power emergency reserves in recent months.
Eskom, which has run out of funds to buy fuel to operate its open-cycle gas turbines (OCGTs), will receive the diesel immediately, but it is still not clear where the money to pay for the fuel will come from.
The use of these emergency diesel-powered generators is needed to compensate for the loss of capacity due to breakdowns at Eskom’s coal-fired power stations.
According to independent energy analyst Clyde Mallinson, if Eskom were to run the OCGTs at full capacity for about five to six hours per day, 50-million litres of diesel would last about two weeks.
Eskom announced last week that it might have to implement higher stages of load-shedding, and warned that jumps between stages might become less predictable because it did not have the money to run the OCGTs.
Public enterprises minister Pravin Gordhan said in reply to an urgent question by DA MP Ghaleb Cachalia in the National Assembly on Wednesday that the diesel from PetroSA would be made available immediately. However, what payment arrangements, if any, still have to be determined.
Gordhan said the Treasury was also looking at funding options so Eskom could acquire diesel. He and finance minister Enoch Godongwana held urgent talks on Sunday evening on where money could be found, and on Monday teams from the
Treasury and the department of public enterprises met to identify a number of options, which were being evaluated by the Treasury team.
Gordhan said he expected a response soon.
According to Gordhan, mineral resources & energy minister Gwede Mantashe and PetroSA had given the undertaking that sufficient diesel would be made available at all times for Eskom, one of PetroSA’s biggest customers.
The minister said Eskom had already reached R14.7bn in terms of its diesel requirements by November 17 against a budget this year of about R11bn.
The OCGTs — Ankerlig and Gourikwa — have a combined generation capacity of 2,000MW, which is equal to the amount of power that is dropped from the grid at stage 2 load-shedding.
According to Eskom, it is not possible for it to use more than about R2.4bn of diesel (about 100-million litres at current wholesale prices) in a month due to the logistical limitations of delivering the diesel to the OCGT stations.
The diesel from PetroSA will be delivered to Eskom by pipeline to Gourikwa, but diesel to Ankerlig has to be trucked in.
Eskom sounded the alarm about imminent budget shortages for diesel as early as June when it said that the escalating cost of fuel coupled with the high demand for emergency power generation compelled it to burn diesel at about twice the rate it had budgeted for.