Eskom to burn R30bn of diesel as it tries to deal with load-shedding

Electricity minister Kgosientsho Ramokgopa has announced Eskom will spend about R30bn in the current financial year as it tries to mitigate the severity of load-shedding. 

Ramokgopa was speaking at a briefing on Friday, at which he outlined the implementation of the energy action plan.

With demand expected to increase by between 32,000MW to 37,000MW in winter, Ramokgopa said the next 150 days would be difficult but that interventions were already under way. 

Among other measures, Ramokgopa said the power utility will maximise the use of open-cycle gas turbines to generate electricity, which will see Eskom spend about R30bn on diesel.

“We know that in the 18% tariff increase that Nersa granted Eskom, there’s R8bn set aside to buy diesel. In the R254bn fiscal relief provided by the National Treasury, there’s about R22bn set aside for purchasing diesel, so in total we are talking about R30bn for diesel. 

“The cost of protecting the South African economy will be significant but we say the measure of the success of our intervention must be seen to protect jobs, to ensure that there is a degree of GDP growth so that we don’t collapse the economy. That’s what we are trying to do now,” Ramokgopa said. 

He added Eskom was working on improving the energy availability factor and that South Africans should start seeing improvements soon. 

“Eskom will continue to ensure that we undertake substantial maintenance as we did during the summer period and we have seen — temporarily — some improvement in six power stations. 

“Of course, we did have setbacks sometimes, with units failing and our inability to return units on time as promised. This is an area that is receiving attention.”  

Another intervention, he said, would be upscaling Eskom's work on demand side management.

“We know that there is significant potential there, especially at the household level. Eskom ran a very successful campaign in 2010 and they were able to save about 3,000MW. That is about three stages of load-shedding in the current status. We say that’s still possible now. With the maturity of technology, we will be able to roll out rapidly.”

On longer-term interventions, Ramokgopa said Eskom was nearing the finalisation of a deal which could add much-needed capacity to the grid. 

“Work is at an advanced stage to procure emergency power solutions for a period of not more than five years because it is emergency procurement. There is an opportunity that presents itself for us to get 1,000MW from Mozambique, Eskom is still pursuing that through a power purchase agreement.” 

Ramokgopa said some of the projects procured through the government’s renewable independent power producer programme were connecting at the end of the calendar year and some next year.

The other challenge affecting Eskom's ability to improve the energy availability factor, he said, was the constraint on the power utility's balance sheet because it was unable to make necessary investments.

During his budget speech in February, finance minister Enoch Godongwana announced a three-year, R254bn debt relief package for Eskom.  

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