Eskom’s next big challenge to keep the lights on

Eskom’s plan to extend the life of its ageing coal-fired power plants presents a significant challenge regarding whether resources should be allocated to maintain these deteriorating plants or ensure Medupi and Kusile operate at full capacity. 

The utility has planned for years to extend the life of its ‘old coal fleet’ of Hendrina, Grootvlei, Arnot, Camden, and Kriel power stations, which generate a quarter of its coal capacity. 

However, this plan has hit several roadblocks, including conditions from international investors to accelerate the end of coal-fired power in South Africa and emission caps. 

Eskom had a recent positive outcome in this regard. The utility won an appeal to keep the five oldest plants open until 2030 despite them breaching emissions limits. 

Eskom will still have to submit new applications for exemptions at the Matla, Duvha, Tutuka, and Kendal power plants, which have a capacity of 14,400 MW. 

It is spending billions of rands to address pollution concerns but said it cannot afford the R300 billion needed to comply with new emissions caps that will come into force in 2025. 

Mauro Longano, head of fixed interest research at Coronation, said this presents a substantial challenge for Eskom as these plants will consume significant resources to maintain as they age. 

“We must remember that old plants simply operate less efficiently over time. If these old plants are kept online, they will deteriorate due to age – regardless of the level of maintenance on them,” Longano said. 

Maintenance can only slow down these plants’ declining output, but this comes at an increasing cost over time. 

Maintenance becomes steadily more expensive as plants age, as components can no longer be repaired and must be replaced entirely. 

This will result in resources being taken away from other power stations and parts of Eskom’s business, resulting in declining performance.

Kusile power station

In particular, its new coal-fired power plants – Kusile and Medupi – could be hit as the utility has already poured substantial resources into getting them operational, with neither every producing power at full capacity. 

These new power stations, in theory, should have saved South Africa from ever experiencing severe load-shedding. Medupi and Kusile combined have a maximum output of 9,600 MW. 

However, their construction was plagued with design flaws, corruption and mismanagement, resulting in significant cost overruns and poor output. 

This was compounded by Eskom’s poor operation of these plants. Longano said the explosion of Unit 4 at Medupi and the collapse of flue ducts at Kusile are emblematic of this. 

“It is difficult to say whether these plants will ever operate at their designed capacity due to these operational issues.” 

The extension of the lifespan of Eskom’s older coal-fired power stations puts the utility in a difficult position regarding the allocation of its resources. 

It could allocate increasing resources to maintaining its older power stations to slow their declining output and risk further issues at Medupi and Kusile. 

Or it could focus its attention and resources on ensuring Medupi and Kusile operate at maximum capacity and let the decline of its older coal plants continue unabated. 

Eskom is in this situation due to the utility’s massive debt burden, which has severely constrained its ability to invest in adequate maintenance. 

After the government takes over R252 billion of its debt at the end of the next financial year in 2026, the utility will still sit with over R150 billion of debt. 

Compounding this is the need for Eskom to invest significantly in upgrading its grid infrastructure, which will cost it hundreds of billions of rands, Longano said. 


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