coal stockpiles
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Eskom’s spokesperson, Khulu Phasiwe, confirmed on Monday that the power utility is running low on coal supplies adding that some power plants have less than 20 days of coal stockpiles.

Responding to this declration, the Organisation Undoing Tax Abuse (OUTA) said it is perplexed and concerned about the reported coal supply crisis at Eskom.

OUTA believes this situation is a direct result of poor management and mischievous attempts to purchase ‘emergency coal’ at excessive prices.

“This is a clear indication that bad management decisions at Eskom are at the heart of our high electricity prices. Depleted coal stock piles will result in coal being purchased at premium prices, which will likely result in Eskom requesting another electricity price increase,” said Ronald Chauke, OUTA’s manager: energy portfolio.

Low coal stockpiles

In 2008, South Africa faced chronic power outages due to alleged low stockpiles and high rainfalls that culminated in unusable wet coal.

“We are deeply concerned that the low stock pile levels will inflict a severe blow to our already-fragile economy. In addition, we suspect that Eskom will not be able to meet South Africa’s electricity demand and will be forced to begin load shedding,” added Chauke.

Last month, Eskom’s CEO, Phakamani Hadebe, reported to Parliament that nine of its power stations in Mpumalanga had very low coal stockpile levels.

OUTA maintains that it is imperative that Eskom urgently executes a mitigation strategy to prevent the impending crisis from taking place.

The organisation commends the new board to follow through with the mandate given by the Minister of Public Enterprises, Pravin Gordhan, to come up with a new short-term strategy by the end of September 2018.

OUTA strongly suggests that this strategy should include a new coal procurement strategy to prevent emergency coal purchases.