Eskom jumped in ahead of the National Energy Regulator of SA’s (Nersa’s) Gauteng hearings on its tariff application which started yesterday, with an update on the power system that showed the utility had improved performance and cut its diesel costs significantly during the past quarter.Eskom has applied to Nersa for an additional R22.8-billion in revenue – equivalent to an extra 8% increase in tariffs – to cover cost overruns in its 2013-14 financial year.
Those overruns include R8-billion in diesel costs‚ over and above the amount the regulator had allowed originally and which the utility incurred as it battled to meet demand and reduce load-shedding during that period.
But Eskom chief executive Brian Molefe said yesterday the utility had now clocked up almost six months without load-shedding – and Eskom’s prognosis was that it would get through this summer‚ autumn and winter without load-shedding.
The performance of Eskom’s system had improved in the last quarter of 2015‚ when unplanned outages were down 10% compared to the previous year.
Unplanned outages – caused by breakages‚ accidents or power station units generating below their capacity – fell to 13.8% of its generating capacity in December‚ the lowest since July 2014.
This meant that Eskom used its diesel-fired open-cycle gas turbines (OCGT) less than it had to previously, to meet demand.
Molefe said OCGT usage had fallen 66% between October and January and diesel costs for the financial year to date were R8.6-billion‚ compared to the R9.55-billion that Eskom spent on diesel in the earlier financial year.
Asked if the additional R8-billion for which Eskom was asking Nersa had been prudently incurred in that year‚ Molefe said it had been prudent. The low level of availability of Eskom’s power plants‚ due to unplanned outages and the need for maintenance‚ has been a constraint on its ability to meet demand.
Molefe said the energy availability factor as of yesterday was 74%‚ but he provided no detailed history‚ nor did the briefing include any information on trends in demand.
Very weak demand in an economy that is growing at less than 1% is seen by analysts as one of the key factors that has helped Eskom to keep the lights on, while at the same time doing maintenance on its ageing power stations in an effort to improve their performance.
Molefe said Eskom would continue with a rigorous programme of planned maintenance and would use all available levers to avoid load-shedding.
“If load-shedding does happen‚ it would be because we have gone terribly wrong‚” he said.
The first unit of Eskom’s new 1300MW Ingula power station is expected to be in commercial operation by March next year‚ with the power station fully commissioned two months later.
Eskom head of new build Abram Masango said they had revised estimates of the cost of the Medupi and Kusile power stations‚ but the R160-billion‚ which it has been speculated Medupi would now cost, was “not the number”.
Eskom reins in diesel costs to keep the lights burning
Eskom has applied to Nersa for an additional R22.8-billion in revenue – equivalent to an extra 8% increase in tariffs – to cover cost overruns in its 2013-14 financial year.
Those overruns include R8-billion in diesel costs‚ over and above the amount the regulator had allowed originally and which the utility incurred as it battled to meet demand and reduce load-shedding during that period.
But Eskom chief executive Brian Molefe said yesterday the utility had now clocked up almost six months without load-shedding – and Eskom’s prognosis was that it would get through this summer‚ autumn and winter without load-shedding.
The performance of Eskom’s system had improved in the last quarter of 2015‚ when unplanned outages were down 10% compared to the previous year.
Unplanned outages – caused by breakages‚ accidents or power station units generating below their capacity – fell to 13.8% of its generating capacity in December‚ the lowest since July 2014.
This meant that Eskom used its diesel-fired open-cycle gas turbines (OCGT) less than it had to previously, to meet demand.
Molefe said OCGT usage had fallen 66% between October and January and diesel costs for the financial year to date were R8.6-billion‚ compared to the R9.55-billion that Eskom spent on diesel in the earlier financial year.
Asked if the additional R8-billion for which Eskom was asking Nersa had been prudently incurred in that year‚ Molefe said it had been prudent. The low level of availability of Eskom’s power plants‚ due to unplanned outages and the need for maintenance‚ has been a constraint on its ability to meet demand.
Molefe said the energy availability factor as of yesterday was 74%‚ but he provided no detailed history‚ nor did the briefing include any information on trends in demand.
Very weak demand in an economy that is growing at less than 1% is seen by analysts as one of the key factors that has helped Eskom to keep the lights on, while at the same time doing maintenance on its ageing power stations in an effort to improve their performance.
Molefe said Eskom would continue with a rigorous programme of planned maintenance and would use all available levers to avoid load-shedding.
“If load-shedding does happen‚ it would be because we have gone terribly wrong‚” he said.
The first unit of Eskom’s new 1300MW Ingula power station is expected to be in commercial operation by March next year‚ with the power station fully commissioned two months later.
Eskom head of new build Abram Masango said they had revised estimates of the cost of the Medupi and Kusile power stations‚ but the R160-billion‚ which it has been speculated Medupi would now cost, was “not the number”.
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