Gopolang Chawane
2 minute read
17 Jan 2019
11:36 am

Eskom tables reasons for decline in generational plant performance

Gopolang Chawane

Nersa is holding hearings across the country for the next three weeks on the parastatal's two applications.

Eskom's Medupi power station. Picture: Supplied to Moneyweb

Eskom has tabled its generation performance at the National Energy Regulator of South Africa (Nersa) hearings in Port Elizabeth on Wednesday. The parastatal presented its fleet performance as part of their fourth multi-year price determination application to Nersa.

Presenting on Eskom’s performance was Brad Ross-Jones, a middle manager in the Generation Group. Ross-Jones highlighted numerous factors that contributed to the decline in generation plant performance.

“The root course goes back to the late 90s when Eskom needed to make decisions on building new stations by 1999 at the latest, to meet demand by 2007 but was not allowed to. This meant that the final investment decision could only be taken in December 2006 which was too late.”

This was later exacerbated by delays in the construction of Medupi and Kusile plants. “It should also be noted that one of the key reasons for the delays was an accelerated design period as a result of the late decision and the subsequent over-optimistic expectations on delivery dates.”

This then led to inadequate capacity to meet demand resulting in Eskom operating an ageing generation fleet. This excludes the new power stations under construction. The presentation highlighted that more than half of the stations would be over 37 years old by the start of the MYPD 4 period.

The many financial limitations resulted in mid-life refurbishments and enhancements projects to improve technical performance not being implemented.

Ross-Jones used a car analogy to describe Eskom’s position during the 2010 World Cup in order to avoid load shedding. In order to avoid load shedding, “the car had to run above the red line for extended periods while taking it in for a service every 30,000km instead of every 20,000km as advised by the manufacturer.

Performance improvements with additional capacity from Eskom and IPPs later improved to 78% in 2017/18 from a low point of 72%. This was, however, shortlived, due to the historical ageing fleet being under maintenance. Staff morale was also impacted by the recent state capture and current uncertainty, according to Ross-Jones.

He provided the following solutions:

Costs have to be reduced in a manner which ensures skills required are retained and even sourced externally while reviving the morale of all staff.

The price of electricity must increase to restore the generational performance levels.

An optimum level of maintenance must be executed even if this means load shedding.

Design defects need to be addressed as the newly built units at Medupi and Kusile are not performing as expected.

The hearings continue in Durban on Thursday and Friday. Nersa is holding hearings across the country for the next three weeks on Eskom’s two applications.

The first application is the regulatory clearing account (RCA) application of R21.6 billion for the fifth year (2017/2018) of the MYPD 3 period.

The second is the MYPD 4 revenue application of R219 billion for 2019/20; R252 billion for 2020/21 and R291 billion for 2021/22 meaning a 15% price increase for each year of the MYPD 4 period.

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