Power stations have too little coal at hand‚ Eskom admits

Seven Eskom power stations have coal stockpiles that are lower than the levels required‚ Parliament heard on Wednesday.

Urgent authorisation had to be obtained from the Treasury to purchase more coal without having to go to tender‚ acting group executive for transmission Willie Majola told members of Parliament’s public enterprises committee. A recovery plan was in place and coal was also being moved from stations that had healthy stockpiles to stations that did not have sufficient stock.

Eskom executives led by interim CEO Phakamani Hadebe briefed the committee on the 2016-17 financial results.

Majola said part of the problem arose from Eskom being constrained in terms of capital expenditure. It had concentrated its capital expenditure on Medupi and Kusile and neglected cost-plus mines that require Eskom to invest in infrastructure such as mine shafts. This had meant that those mines had not been able to deliver the monthly tonnages to which they were committed.

Gupta-owned Tegeta Exploration and Resources mines being placed under business rescue made the situation worse‚ as those mines supplied three power stations‚ including Hendrina‚ Komati and Majuba.

Majola noted that Eskom had paid for a significant tonnage of coal from Hendrina in August in 2017 but the coal was never delivered. Disciplinary action was being taken around what amounted to a prepayment that never went through proper governance processes.

Acting group executive for risk and sustainability Thava Govender told MPs that the coal stockpiles at the seven power stations were not at the levels required by Nersa. He said the total system stockpile for all power stations was now at 34 days. If Medupi and Kusile were included‚ this rose to 67 days. He said coal was being moved around to get stocks to healthier levels before winter.