Eskom burned through ‘R250m a day’ in diesel, and still couldn’t keep lights on

Despite the much lower power consumption during the long Easter weekend and spending an estimated R235 million on fuel for 20 open cycle gas turbine generators (OCGT) for 14 hours between Saturday and Sunday night, Eskom still couldn’t manage to keep the lights on and this doesn’t bode well for the coming winter.

Head economist and owner of Economists.co.za Mike Schussler said information was that Eskom’s two biggest OCGTs burn about 400 000 litres of diesel an hour, while the others were far smaller.

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During the week of 15 April, Eskom would have been burning between R126 million to R250 million per day, he said.

Eskom’s inability to provide electricity with the ongoing load shedding would continue to harm the economy in the long run as the utility continued to drown in debt and its deteriorating units. Schussler said the diesel consumption rate a day for OCGTs worked out to around R1.6 billion per week, or about R7 billion a month – “which is unsustainable for Eskom,” he said.

Schussler said the country needed the power and added the economic losses were bigger. “The problem is that Eskom can afford a day or three on this sort of generation cost, but it cannot do so the whole time.

Presently, diesel prices were close to record highs and that will cost, too.”

Schussler said SA needed a solution to produce power cheaper at peak consumption periods.

“We need the power so that our industry can produce or should do so. We should have enough power over the long weekend when much of the heavy industry is closed.

Also, many refineries that use a lot of power have closed.”

He said it was worrying that the power was not there over a long weekend. “We should be using about 25% to 30% less power over a long weekend,” he said.

Professor Roula Inglesi-Lotz from the department of economics at the University of Pretoria said most of the problems of load shedding were linked with planning and strategising from Eskom’s side.

“The weather patterns and the impact on demand, as well as other cyclical trends, can be anticipated up to a point. More needs to be done from a demand side forecasting perspective,” she said.

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Inglesi-Lotz said in 1994, only 36% of the total households in the country were electrified, of which 50% were urban population and 12% were rural population. “In recent years, particularly since 2008-09, the instability in the electricity supply, combined with the rising tariffs, has had a dire economic impact.

“It has become a barrier to income generation, economic growth and development,” she added.

“Planned power cuts are expected to reduce 2021 GDP growth by three percentage points – and cost the country 350 000 potential jobs,” she said.

The university studied the mismatch, either a shortage or a surplus of electricity would probably be bad for economic growth.

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“Our study covered the South African economy from 1985 to 2019. We found that a rising surplus of electricity enhanced economic growth. And increasing economic growth contributed to the rise in the electricity surplus, by making resources available to increase generating capacity,” she said.

– marizkac@citizen.co.za