Eskom spends more on maintenance – but performance gets worse

Eskom spends more money on the maintenance of its coal fleet than its international peers, but its plant performance is much worse. 

This was revealed by the German consultancy group VGBE Energy, which the National Treasury commissioned to recommend how Eskom can improve its performance. 

The group of German engineers with extensive experience in running coal-fired power plants spent four and a half months studying South Africa’s ailing power utility. 

The report pointed to one issue in particular with Eskom – its dysfunctional and overly complex management system. 

This system leads to unnecessary wastage of resources meant to be directed at improving the performance of its power stations. 

However, while Eskom has immense sums of money set aside for the maintenance of its plants, much of this is wasted. 

This results in the utility spending more than its international peers on maintenance yet having much worse plant performance. 

“Compared to international benchmarks, the maintenance budgets of Eskom’s coal fleet is higher – although the Energy Availability Factor (EAF) is much lower,” the report said. 

The EAF shows the percentage of time the power station was available for use when it was needed. It is a core measure of performance for any power utility.

The engineers used maintenance budget figures from coal-fired power plants operating in Europe, the US and Asia to define an international benchmark.

From 2013 to 2027, Eskom’s budgets for plant maintenance are well above the international benchmark, they said. 

Thus, the money spent by Eskom should have been sufficient to execute proper maintenance and to keep the power plants in good condition.

But, the EAF of Eskom’s coal fleet is currently at about 51%, whereas international benchmarks are in the range of 78%. 

The report said the only way to improve the EAF is to ensure the execution of thorough operation and maintenance practices and procedures. 

Eskom’s complex management system and onerous procedures complicate this and prevent plant managers from addressing challenges without approval from Megawatt Park. 

Eskom’s EAF plummeted to 50.84%, a new record low for February towards the end of the month, despite claims from government officials that the utility had performed intensive maintenance on its plants. 

The declining EAF is particularly concerning because it is the core metric for Eskom to lighten and eventually stop load-shedding.

In January 2023, then-Eskom chair Mpho Makwana said they had embarked on a turnaround journey to improve plant performance and reduce load-shedding.

Makwana set targets of 60% EAF by 31 March 2023, 65% EAF by 31 March 2024, and 70% by 31 March 2025.

These targets formed the foundation of Eskom’s plan to meet the country’s electricity demand and end rolling blackouts.

Unless Eskom succeeds in increasing the reliability of its generation fleet, South Africa should expect many more years of load-shedding.

The table below shows how much more money Eskom spends on maintenance compared to the international benchmark while its performance deteriorates further.

The blue line represents the international benchmark for spending on maintenance of around €15.62 (R323.12) per MW. Eskom’s spending on maintenance fluctuates between €23.46 (R485.30) per MW and €33.89 (R701.08) per MW.


Top JSE indices