Future without load shedding possible for South Africa, Eskom board chairperson says

South Africa’s long-running energy crisis worsened in July after an easing the previous month. After a short-lived period of relief from rolling power outages, or load shedding, the embattled state-owned power utility Eskom resumed blacking out some areas for up to 10 hours daily.

Further breakdowns of the country’s ageing coal-fired power plants, as well as theft of electricity transmission infrastructure and unusually cold weather, were cited as a reason for increased stages of load shedding.

The outages, the government says, result in the continent’s most advanced economy losing business amounting to $50mn daily. However, Eskom chairperson Mpho Makwana sounded upbeat when he explained the turnaround plan for the struggling utility in an interview with Daily Maverick published on July 24.

“Given that at the highest level in the country there’s a sense that we are in a crisis, our job, firstly, is to minimise this sense of angst that there is a crisis by stabilising the existing fleet,” he said. When asked if it was possible to see the future without load shedding, Makwana stated with conviction: “It is possible.”

“We committed to this country that we would have a turnaround in energy availability and that by 31 March 2023 we would achieve specific measures in terms of contributing towards 60% energy availability,” he said. “We then said that we would strive towards 31 March 2024, to have a 65% energy availability factor, and then 31 March 2025, 70%.”

Makwana explained that the levels of load shedding will come down as the energy availability factor (EAF) increases. On those one or two days in June when South Africans experienced no load shedding, he says, Eskom was already operating at 65% EAF.  “So, between 65% and 70%, load shedding becomes a non-issue,” Makwana said as quoted by Daily Maverick.

Exciting opportunity

According to some energy analysts, the energy reforms are starting to work, judging by the number of independent power generation licensing approvals granted by the National Energy Regulator of South Africa (NERSA). Makwana maintained that the opportunities outside of Eskom and in probable competition with Eskom were exciting for the utility’s board and management.

“The prospect that soon we will have a national transmission company, once approved, that will then start creating a sense of fair play. It just means we get a breather because that’s what it should do,” he explained. “Eskom would get a break to do maintenance properly, do maintenance when it should, and restore some semblance of the excellence we had in 2001 when we were recognised as the global utility company of the year.”

Repairs on track?

During the interview, Makwana confirmed that the planned repairs were still on track for later in 2023, as set out in the winter system briefing. South Africa’s energy stability largely depends on effective operations at Koeberg nuclear power plant and Kusile power station, the largest coal-fired power plant in the country. Koeberg’s Unit 1 and Kusile Units 1, 2 and 3 are responsible for 3,300 MW of power, and their effective repair can limit load shedding.

“So far, there are no indications that they will falter, and so, as far as Koeberg is concerned, all is on track,” the board chairman said. “As far as Kusile is concerned, all is on the way, and the team there is doing a good job stabilising Kusile, and we’ve been getting a lot of support from the private sector.”

At the same time, Electricity Minister Kgosientsho Ramokgopa said at a media briefing that the Koeberg unit repair was more than two months behind schedule, and he was “very, very worried,” as reported by bne Intellinews. Unit one of Koeberg is still offline, and its steam generator is yet to be replaced, while the second unit is expected to go offline in September.

Enough diesel?

According to Daily Maverick, in 2022 and 2023, Eskom burnt through diesel at such a rate that it had to ask the Treasury for additional funds. The utility was allocated ZAR30bn ($1.6bn) budget for diesel to fuel the emergency open-cycle gas turbines (OCGTs) in 2023. The board chairman did not give a straight answer when asked about how much of that budget had been already spent.

“It’s not as huge a problem area as when we assumed office. I remember having a board meeting on 23 December [2022] when Eskom management told the country that we had run out of money for diesel. The investment and finance committee, led by Tryphosa Ramano, figured out some modelling that management could follow,” Makwena explained.

“First, we finished the financial year with adequate diesel supplies; from 1 April 2023 to 31 March 2024 we would have sufficient funding. There’s a prudent use of open-cycle gas turbines, which comforts us that we will not run out of diesel,” he added.

Vague answers

Other than giving an affirmative answer to the very first question on whether it was possible to see the future without load shedding, the board chairman remained vague when questioned about events at the utility.

Asked about a timeframe for a new Eskom CEO appointment, Makwana stated that “the process of appointing the group chief executive is now at its most delicate phase. It’s long out of the board; it’s now in the shareholders phase [government] in terms of due diligence.”

A question about a potential timeframe for the start of the operation of the newly established national transmission company (NTC) was also left unanswered.

“The timelines are a moving target because there is so much complexity,” Makwana said. “Our high-level timeline is to ensure that by quarter three, early quarter four (September to December) of this year, we have something in place regarding a board regarding precise management.”

Other phrases used by Eskom’s board chairman in response to Daily Maverick’s questions were: “these things are proving complicated and taking time”, “there are regulatory matters to resolve”, “it’s an ongoing process”, “there’s work happening”, and “ it’s a mammoth task!”

Perhaps, one of the most telling answers by Makwana was given to this direct question:

Are we still in an energy crisis?

“We are emerging from a crisis because everything we are dealing with is complex. So, there’s always a tightrope to walk, ensuring that everything moves in tandem. You know, Eskom has an enormous system impact on the economy and society, whether you think of security, economic GDP impact, or daily lives. So, you can’t move like a single listed corporation on the JSE. So, that’s why we are emerging out of a crisis because the first crisis is to keep the lights on and reassure the country of the security of supply.”