Brace yourselves for blackouts, says Eskom
Poor planning and construction delays have put electricity capacity at risk
SOUTH Africans should settle in for a cold, dark winter as Eskom battles to deal with tight electricity supplies — a result of insufficient planning and major delays in building new power stations.
The power utility’s interim CEO, Collin Matjila, warned this week that the likelihood of controlled blackouts remained high because of tight generation capacity. He said it would be a “last resort”, but this will be small solace for the public. Several Johannesburg suburbs already experienced power cuts with the arrival of the cold front over the weekend, due to cable theft.
Public Enterprises Minister Lynne Brown said she was likely to lose sleep as the new guardian of South Africa’s state-owned enterprises.
“I am looking after eight stateowned enterprises and my aim is to track where they all are and identify their challenges and other daunting issues.
“Many of these issues were heard here today [at Eskom’s media brief- ing]. Hopefully, somewhere along the line, I will get some sleep.”
Eskom’s inability to keep to its deadline on delivering its new build programme — specifically the 4 800MW Medupi coal-fired power station — is enough to turn anyone into an insomniac.
Medupi had initially been due to start delivering electricity in April 2011.
This week’s briefing was told that the earliest the first unit could be ramped up to full production (supplying 800MW) is April 2015. This four-year delay will cost R105-billion, excluding interest.
And despite Matjila’s assurances this week that technical problems — including defective boiler welds — had been sorted out, Eskom might not escape still more delays owing to another strike.
Workers at Medupi plan to start striking next month, which could result in further delays at the plant as well as at the other big coal-fired power station under construction, Kusile. The effect on South Africa’s economic growth, already creeping along at a sluggish pace, would be stifling. “Electricity is a critical block to support economic growth in the country,” said Brown.
She again asked South Africans to switch off geysers, pool pumps and unnecessary lights and to use gas heaters where possible, especially from 5pm to 9pm, when electricity demand spikes.
To keep the lights on, Eskom will cut down on the scheduled main- tenance of South Africa’s “middleaged” stations this winter.
It is also “in talks” with big industry to cut back on electricity use during tight periods. The utility first asked the big users, such as the mining giants, to cut their electricity use during the rolling blackouts of 2008. It was a plea the utility had to repeat in February and March this year.
Tight supplies forced it to use other, expensive, measures too, such as using open-cycle gas turbines that run on diesel.
Eskom spent R1-billion on diesel during the first two months of its financial year.
Its third project under construction, the Ingula pump scheme, ground to a halt in October last year because of a serious accident that led to the deaths of six workers. Matjila revealed this week that investigations into the accident were expected to delay the project another year.
Constrained supply is not the util- ity’s only challenge — it is staring a massive R225-billion revenue shortfall in the face over the next five years.
Thirty Eskom executives will be forfeiting their “performance” bonuses this year in an effort to cut costs and close the shortfall, but although this makes for good PR, it represents a drop in a very large bucket.
Last year, former CEO Brian Dames and financial director Paul O’Flaherty together received about R8.8-million in bonuses.
Both have since left the besieged power utility.
One of Brown’s first tasks will be to nominate a new Eskom CEO in the coming weeks.
Matjila has come under fire in recent weeks for his involvement in Cosatu’s investment arm, Kopano ke Matla, first because of pension money being misappropriated and then for helping to sell the old Cosatu building on the cheap and overpaying R6.3million for a new building.
Matjila told Business Times that he had not thought of any plans after Eskom yet.