South Africa

Eskom needs more money – Electricity Minister

Electricity minister Kgosientsho Ramokgopa

Electricity Minister Kgosientsho Ramokgopa argued today that Eskom needs more money to increase generation capacity and limit load-shedding.

He said that the first problem facing Eskom is under-investment. The total cost of not investing in the generation fleet to mitigate stages of load-shedding is far greater than the money required to improve the fleet’s efficiency.

Following his tour of power stations across the country, the minister provided a technical and granular look at the challenges power stations face and the opportunities that exist to increase the fleet’s efficiency.

Currently, 47% of South Africa’s generation capacity is offline. Generation units are either unavailable or forced to operate at a lower output level as a consequence of restrictions such as maximum emission constraints.

Some of the power plants are performing exceptionally poorly, including:

  1. Kusile, when completed, will be able to mitigate 4.5 stages of load-shedding. However, its available units have an energy availability factor (EAF) of 37.4%.
  2. Tutuka, which can mitigate 3.5 stages of load-shedding, has an EAF of 26.02%.
  3. Hendrina can mitigate two stages of load-shedding but only operates at an efficiency of 23.3%.

To improve the efficiency of the generation fleet, Ramokgopa said that significant investment in the utility would be required.

The minister identified areas where investment was required at the country’s biggest power stations to improve the fleet’s efficiency.

A recurring theme across stations was the need for investment in Eskom’s coal assets to ensure a reliable supply of high-grade coal to power stations.

Eskom owns coal mines but has often been unable to provide the finances required to utilise these assets.

Ramokgopa urged the cabinet to consider a simple cost-benefit calculation when deciding whether to finance a project that could bring generation capacity to the grid.

If the cost of the load-shedding that an investment could reduce is greater than the cost of the investment itself, then it makes sense to finance the investment.

He said that this should be top of mind for decision-makers rather than concerns about the balance sheet of Eskom.

Ramokgopa will be presenting policy options to the cabinet so that Eskom can decide whether to free up funds to increase the electricity supply.


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