Eskom's energy generation performance is cruising along nicely, so much so that it now goes for days without burning diesel. If the trend is sustained long enough this could lead to lower electricity tariff increases.
Eskom, which was spending about R100m a day burning diesel to generate electricity earlier this year, is now spending an average of R7.9m per day.
The power utility has implemented double-digit tariff increases in recent years which exceeded the inflation rate. It is seeking approval from the National Energy Regulator of South Africa (Nersa) for an average tariff increase of 36% in 2025 after having been granted a 12.7% increase this year.
During June, Eskom went three days in the height of winter without requiring the open-cycle gas turbines (OCGT) to meet peak energy demand, Eskom told TimesLIVE Premium.
In the event that the actual OCGT spend is lower than the Nersa determination, this will be included in the regulatory clearing account application for the benefit of the consumer.
— Eskom
“The financial year 2024 year to date [diesel] budget is R7.60bn and actual is R3.48bn, resulting in an under-expenditure of R4.12bn. These financial efficiencies are as a result of the Generation Operational Recovery Plan,” stated Eskom.
It added that this trend may benefit the consumer if it's sustained.
“An assumption is made on the level of OCGT production required when a revenue application is made. Nersa then makes a determination. In the event that the actual OCGT spend for both Eskom and IPP [independent power producers) OCGT is lower than the Nersa determination, this will be included in the regulatory clearing account application for the benefit of the consumer.
“Thus, the consumer will benefit due to the lower utilisation of OCGT when compared to a Nersa determination,” said Eskom.
Eskom will enter the summer season in a positive position as it is expecting more than 2,500MW of energy generation additional capacity in the next few weeks.
Medupi's unit 4, where a generator blew up in 2021, and Kusile unit 6, which have installed capacity of 800MW each, were expected back online between next month and November.
Koeberg unit 2, which is undergoing a steam generator replacement project to extend its lives, will add 920MW to the grid.
Eskom's head of generation, Bheki Nxumalo, has credited the two-year generation operational recovery plan, which commenced in March 2023, for improving the availability of the coal fleet.
The big turning point, according to Nxumalo, was when three units at Kusile were returned, including the commissioning of unit 5. However, there was also improved performance from five of the six power stations that were not performing as expected at the start of the recovery, Nxumalo said.
Independent energy analyst Clyde Mallinson said the ideal situation would be seeing “the system operator having three times the storage power capacity” at his fingertips right now.
He said the system operator would be secure in the knowledge that there would be sufficient surplus in each 24-hour cycle to recharge.
“Wouldn't that be pleasant? No longer any need to ride the coal-plant clutch for rapid ramping up and down,” Mallinson said.
He said Eskom has put itself in a good situation where all emergency resources can be used for what they were brought into the fray for.
“The other thing that happens when pumped storage (hydro storage power) is able to fulfil its full potential for daily ramping and peak supply duties, without range anxiety.
“He said the reduction in the use of diesel peakers [OCGT] ... can now be relegated to providing emergency reserves, as the pumped-hydro storage is barrelling along at full tilt, instead of at half-mast.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.