Eskom is battling to keep the lights on as municipalities owe it R57bn

While South Africans should brace for two more years of load-shedding, the possibility of it reaching stage 8 is receding for now as Eskom battles to recover R57bn in municipal debt.

This is according to outgoing Eskom CEO Andre de Ruyter who, with Eskom board members and other executives, provided an update on the implementation of an action plan to address the energy crisis.

De Ruyter, who apologised to South Africans for the ongoing outages, said: “From the outlook the possibility of stage 8 load-shedding is receding, which is positive.”

But he warned there is an “inherent risk and for that purpose we have to protect our reserves including our diesel reserves and pump storage reserves”.

He said liquidity remained a key problem with municipal debt approaching R57bn.

“We urge all consumers of electricity to pay for what you consume. If we don’t receive payment we are compromised to carry out planned maintenance, buy the feed stocks and diesel we need to keep the lights on.

“Paying your account is an extremely important role you can play to help put load-shedding behind us.”

He said Eskom and government departments were working hard to address issues that have led to the crisis.

“The first matter that is enjoying urgent attention is our energy availability factor ... which has during the past weeks reached new lows.

“This is attributable to the failure of three units at Khusile as well as extremely high levels of planned maintenance ...

“These are steps, particularly with planned maintenance, which are vital to restoring the system. Therefore we don’t wish to compromise on our programme of planned maintenance.

“During the winter period we will be ramping down our planned maintenance. This is not neglect but a deliberate planned exercise.

“The capacity that is available from the Eskom system is likely to remain constrained and supply is likely to remain tight for the whole of 2023.”

De Ruyter said on a positive note an estimated 9,200 megawatts of embedded generation projects were in the pipeline.

“When these projects are added to the grid — the first of these are intended to be added to the grid by the end of this year — we will see a meaningful difference being made to the supply situation.”

Mpho Makwana, Eskom chair, said the generation recovery plan, approved by the board last month, has been stress tested.

“The planned performance recovery plan, which is at the final stages of being approved by the shareholder now that the board has approved it, will be driven vigorously and through an external project management company which will independently ensure that we will be able to constantly monitor and execute the recovery plan.

“This is part of the different mechanisms for the purposes of ensuring that henceforth we give credible information to the people of our country.

“The reality is that the recovery of the Eskom coal fleet currently comprising 80% of our generation power mix will not be achieved within a short term.

“It will take at least two years to ultimately reach the perfect split desirable energy availability factor.

“We are moving from a low base currently at 58% to 70% in two years' time.”

Makwana said key to the success of the Eskom fleet is fixing systematic issues troubling the organisation.

“Issues relating to leadership, organisation culture and poor internal controls that are required to lead this organisation back to a semblance of where it used to be. These efforts will be embedded as part of the recovery plan.

“The recovery of generation performance will not happen within a short space of time.

“The execution of the recovery plan, requires that power stations are given space and room to execute the plan that requires adding either additional capacity to create space while ensuring that proper maintenance is done without a constant drive that is reactive.

“We want to ensure that we maintain some predictability by maintaining some level of permanent stages between 2 and 3 load-shedding for the next two years in order to give sufficient space for maintenance, while giving the country a level of consistency to plan livelihoods better.”

He conceded that “shuffling from one stage to another in a short space of time is not good for any business in any context”.

“The teams at power stations are working hard to get better reliability and availability of power.”

Makwana said Eskom teams needed to be incentivised to spur good performance.

“The capacity challenges that Eskom is dealing with are not insurmountable.

“We do have the capacity to fix the plant reliability and availability challenges.

“What is most important to note is that we need close co-operation between ourselves and all our stakeholders.

“The support required from all South Africans is to use electricity sparingly.

“Numerous interventions are being explored such as rooftop solar rollouts, micro-grid rollout programme, [for] which we have already done some pilots and energy conservation such as energy efficient lighting.”

He said the search for a new chief generation officer as well as group CEO has commenced.

“Leadership is critical in dealing with this crisis, and the board is driving this process as speedily as possible.”

He thanked De Ruyter for his commitment, “in spite of the ultimate sacrifice he almost suffered when an evil treasonous criminal allegedly laced his coffee with cyanide”.

“The board takes this matter extremely seriously, in line with our duty as an employer, various initiatives will be taken by the board while allowing the full might of the law to take its course.”

Makwana said the recently approved 18.65% tariff increase would go a long way towards solving the liquidity challenges Eskom was facing.

“We are fully cognisant of the impact this increase will have on our customers in terms of affordability of electricity.

“The power system outlook for the next coming months is currently being looked at and will be finalised as soon as possible.

“Load-shedding is an act of last resort to protect the power system from a total blackout.

“Even though the country is experiencing high stages of load-shedding the turnaround plan is geared to reducing the stages of load-shedding.

“We are also mindful that the winter months are fast approaching, where there is higher demand.

“This increases the probability of higher stages, Eskom will work harder to ensure that we don’t get to much higher stages of load-shedding.”

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