Eskom

According to Eskom’s figures, the power utility is not moving fast enough to reverse the downward trend in power availability with serious implications for South Africa’s economy.
Eskom’s latest bi-weekly systems status bulletin, which provides statistics on planned and unplanned out of service plant, goes a long way to explain why South Africa’s electricity is increasingly expensive and blackouts loom ominously.

On Monday, January 27, Eskom said that 27% of required capacity is out of service; in other parlance, nearly one-third of income sales generating plant is not available. Eskom says that 18% of this was planned and 9% unplanned.

The global norm in power plant world for total unavailable capacity is 10% to 14%, not 27%. South Africa’s previous Integrated Resource Plan (IRP) followed this standard and assumed 86% availability for the Eskom fleet. However the current proposed update to the IRP 2010 uses 80% full and 20% unavailable capacity, which Eskom has adopted with its 80:10:10 maintenance strategy. The 20% allows for 10% planned and 10% unplanned maintenance and accepts that more unplanned maintenance will be the norm.

On January 27, 9% of unplanned maintenance was close to the Eskom’s target of 10%, but planned maintenance at 18% was far above the long term planning target of 10%. Eskom systems status updates show this to be a regular pattern.

The problem is that on that date Eskom was experiencing an additional 8% of planned outages, or about 6,000 MW of capacity, which equates to two complete existing power stations in Mpumalanga, and more than the capacity of the mega stations, Medupi and Kusile currently under construction.

This happens to varying degrees on every day that planned outages are higher than 10%. Eskom must reverse this trend of increasing unplanned outages, otherwise it could easily lead to a downward spiral of less and less power available on the grid with serious implications, including:

  • Increased use of gas turbines (on diesel) at high costs;
  • Decline in power quality due to lack of capacity of the grid (frequency reduction, and associated decrease in the life of equipment and appliances);
  • More heavy industrial customers in forced shut downs;
  • Lost production and growth and the potential jobs;
  • Potential load shedding for large private customers.
  • Time is not on the side of Eskom or South Africa’s economy. There are known solutions but in South Africa, the liberalisation of the electricity supply industry is progressing far too slowly which is a key factor driving the crisis within the power industry.

The 1998 White Paper states that opening up the sector to independent private producers (IPPs) is official government policy. This policy has not been changed. However, beyond a small amount of renewable power, competitive access to the grid is still a long way off.

Critical questions remain:

  1. Is an open market in electricity generation still government intention as set out by 1998 White Paper?
  2. If so, then when will this be implemented?
  3. If not, then we need to know what government intends.

By the Free Market Foundation