Eskom’s coal deals dodgy
The power utility yesterday suspended the managers at three power plants and put its chief procurement officer, Jay Pillay, on notice after a ‘whole lot of coal that was supposed to be there, wasn’t there’, a source says.
Eskom has confirmed the suspensions of managers at Kendal, Matla and Hendrina power stations for investigations at the plants, while chief procurement officer Jay Pillay has been has been served with a precautionary notice.
And there may be more to come, energy expert Chris Yelland said.
Eskom spokesperson Khulu Phasiwe said the utility could not disclose the reasons for these suspensions as “this may compromise the investigations”.
Pillay has 48 hours to state reasons why he should not be suspended as per the Labour Relations Act, Phasiwe said.
He added that coal levels were improving at six struggling power stations. “Previously, there were seven stations with low stock levels, but one, Komati, is now up to the requisite levels.”
Eskom has seven coal-fired power stations and has been running diesel generators to fill the gaps caused by increased planned maintenance, coal supply problems, unplanned capability loss and other capability loss factors.
“In the 2017-18 financial year, Eskom budgeted R650 million for the open cycle gas turbines, but only used R320 million. The usage of diesel was in line with the national Energy Regulator of SA’s allowed load factor of 1%. The R320 million expenditure represented a load factor of 0.5% – a huge improvement from the previous expenditure of R1 billion per month during the 2014 loadshedding,” Phasiwe said.
Yelland said there were apparently also problems at Matla, which was not on the original list of power stations running low on coal. Arnot, Tutuka, Majuba, Hendrina, Camden, Kriel and Komati were on that list. “My information was that there is coal at Matla, but it is unusable. Eskom told me it would conduct a survey of the stock and get back to me, which it never did,” Yelland said. “So, after hearing the station manager was suspended, there must be a problem at Matla. I’m speculating, but he was probably suspended for giving the wrong information to Eskom.”
Yelland claimed Hendrina’s manager was suspended for that reason. “He was suspended a while ago. In November, Hendrina had 26 days’ coal, then 12 days, then it came out there was only 10 days’ coal. A whole lot of coal said to be there was not there.”
Even if coal was shuffled between the power stations, the levels were still at 20 days, insisted Mining & Energy Advisory’s Ted Blom.
Miningmx reported recently that Matla coal mine needed “a R1.8 billion reserve and resource replacement project to maintain the contracted 10 million tons per year to Eskom. Currently, Exxaro is supplying about eight million tons annually to Matla.”
Blom said he had verified his numbers with a coal supplier and Eskom’s figures did not add up.
“It’s impossible for Eskom to have picked up an extra five million tons in one week ... Seven out of 11 stations in Mpumalanga were in trouble. Eskom is not admitting it is on the brink of collapse,” he said. “Eskom burns about 2.5 million tons a week. They’ve increased their stockpile by 15 days. There aren’t that many trucks in SA, never mind coal trucks.” –
Eskom is not admitting it is on the brink of collapse.