Eskom unbundling: Stage set for private electricity generation

Eskom CEO André de Ruyter said the unbundling of the ailing parastatal, as one of it’s most urgent priorities, is on track.

De Ruyter explained the aim of seperating crucial departments is to encourage private electricity generation.

“We have legally separated the transmission entity that was completed in time as per the deadline set by government and we are now in the process of operationalizing the business.

That should take place by September of this year and then we will have the tool at our disposal to allow for a far more liberalised approach to electricity trading to start to take hold.”

“Initially of course this will not happen overnight, but we will definitely see this as a sign that will build confidence among investors that Eskom is serious about facilitating and encouraging private investment in new generation capacity, de Ruyter said.

Load Shedding

Addressing the current bout of stage 2 load shedding, De Ruyter said there is a shortfall of between 4 and 6 gigawatts of electricity which is required for headroom to take other units off line.

De Ruyter said load shedding remains a huge inconvenience.

“I can give you the assurance that my executives and I are seized with the matter, we are working hard to resolve the issues that are outstanding, but we still face considerable challenges and some significant legacy issues we need to overcome.”

ALSO READ: Load shedding: Eskom announces stage 2 will continue after three generation units fail

De Ruyter said it is important to emphasize that South Africans should not accept load shedding and the lack of generation capacity as the new normal.

“While it’s been going on for fourteen years now, we need to take urgent steps to address load shedding.”   

Zondo Report

De Ruyter said Eskom also operates in an ecosystem and is dependent on a number of other government departments and agencies.

“In particular we welcome the report released by the Zondo Commission into state capture and corruption at Eskom. We have taken careful note of the contents of that report. We’ve established an internal task team chaired by myself that will deal with the implementation of the recommendations in that report.”

De Ryuter said Eskom has also appointed external legal advisors to advice the parastatal on legal advice.

“Very soon after the release of the relevant Zondo report, I met with Advocate Shamila Batohi at the NPA. We had a very constructive discussion and we are at idem that the NPA is seized with the matter of bringing prosecutions on an urgent basis, but in a way that ensures maximum prosecutorial success.”

“We have agreed that from an Eskom perspective we will do everything that we can to assist the NPA in ensuring that those prosecutions are successful, making available witnesses, further evidence, documentation, whatever the NPA requires, we will be there to render assistance.”

De Ruyter said Eskom is also looking forward to increase support and cooperation from law enforcement authorities particularly in the province of Mpumalanga where it is still beset with criminal activity.

“Fraud and corruption have unfortunately have metastasised in Eskom and it has come to a point where we now really need the urgent assistance of our law enforcement agencies to help Eskom to bring these criminals to book and to ensure that we can resume normal operations instead of having to cope with organised crime operating at our facilities.”

Eskom’s presentation during the State of the System update also revealed that the national electricity grid remains constrained, with an elevated risk of loadshedding over the winter period, particularly during the morning and evening peaks.

Eskom said during the next few weeks, it will return to service two units at Kusile Power Station and Koeberg Unit 2 is expected to return by the end of June 2022.

These three large generation units it said, will add approximately 2 500MW to the power system.

Due to low plant availability Eskom has increasingly relied on the usage of diesel-powered open cycle gas turbines (OCGTs) to limit the implementation of loadshedding, from 1 January to 10 May this year, loadshedding has been implemented for 32 days.

This is six days more than the 26 days of loadshedding during the same period last year.

Winter Outlook

Sharing the Winter Plan, Eskom’s Group Executive for Transmission, Segomoco Scheppers, highlighted that the outlook shows an elevated risk of loadshedding remains.

“One thing counting in favour of the country is the world class and effective management by the transmission system operator, whose main task is to maintain the balance between supply and demand.” 

Last month Scheppers said load shedding in winter will depend on whether it is able to contain the unplanned breakdowns to below 12 500MW and that the country could experience between 37 and 101 days of load shedding.

ALSO READ: Eskom’s Group Executive for Generation, Philip Dukashe quits