Eskom generates less electricity than negative energy amongst South Africans Photo Department of Public Enterprises
Johannesburg – Eskom’s bleak situation continues to worsen. Stage 4 load shedding was implemented on Wednesday night following several failures and breakdowns at power stations across the country. To make up for the shortfall, Eskom has turned to diesel generation to try to reduce the stress on the power system.
According to Adil Nchabeleng, Energy expert, almost half the power stations in South Africa are down or out of order leading to Eskom burning nine million litres of diesel a day to keep the lights on.
“It’s [Eskom] actually having to rely on a lot of diesel generation on the basis that there is not sufficient power generation. A lot of power stations are down, most of them, as we are told right now. The energy availability factor, which is the generation capacity of the whole, over 100 percent, is sitting at about 58 percent. Which means almost half of Eskom’s power fleet is currently down so when you are in that situation you must run into your emergency generation.”
The current method is not feasible. Not only is Eskom burning nine million litres of diesel a day, but it is also burning its cash reserves as well. The cost to produce electricity with diesel is much higher than what consumers pay for it.
“Diesel production accounts for about 7.4 percent of total costs and that energy is only about one percent that Eskom is using,” said Nchabeleng.
“We are paying Eskom about R1,86 at this stage in terms of [per] kilowatt but they are spending R4,70 to produce the electricity that you are paying for at R1,86. The mathematics doesn’t make sense. Eskom is finding itself in a situation where it is going to haemorrhage in terms of its revenues and the total cost of all other unnecessary expenses.”
Eskom is in the business of selling electricity. It has managed to get this far by managing to keep its cost of production in line but with the added shortfall of 21 000 megawatts, it only adds to the problems.
Constant warnings of problems which were given to Eskom were not heeded.
“We’ve been saying this for quite some years now that there is going to be a problem stage,” but it fell on deaf ears,” said Nchabeleng, “We spoke about this thing many times and we indicated the mathematics, we indicated the economic side of it, we indicated the technical side of it and the legal implications, and nobody was interested to listen.”
There have been talks for quite some time that with the current state of Eskom it might be the right time to switch to solar energy. It is seen as the cleaner route, the better route to take to save the environment and the way forward. There are many countries in Europe that have embraced solar energy and renewable energy. Nchabeleng believes “South Africa is a majority poor nation” and as such, many people won’t be able to access solar power.
“Majority of this population, which is over eighty percent, are in abject poverty. As I said to you that we are a developmental state and the mathematics don’t work. Over 47 percent of electricity generation and consumption is at residential level. When you look at 47% of your population, your electricity generation going towards your supply of your households and in there you have over 80 percent of them who are poor…. To buy a solar system that will sustain you day and night you need a minimum of at least R250 000 to be completely off-grid.”
With smart planning, Eskom could have avoided this problem years ago. South Africa is still running on power stations built during the Apartheid era which was created to only service “five million people”. Post Aparthied, Eskom under the ANC, ”did not do anything to service the expanding majority population that came out of the rural areas, came out of the Bantustan, moved into and migrated directly into the cities and we were not able to produce the sufficient electricity generation capacity,” explained Nchabeleng.
According to Nchabeleng the situation that we are currently in could have been avoided or at the very least been much better had Eskom built power stations yearly to keep up with demand.
“There was never sufficient capacity. Eskom should have been building power stations on a yearly basis of 10 000 megawatts. They didn’t do that. If they’ve just done even 2 000 megawatts a year cumulatively over thirty years, it would have made a massive difference in terms of our situation.”
The invasion of Ukraine has been used as a reason diesel is costing Eskom so much. This is a “mismatching issue” said Nchabeleng “as Russia’s war does not even affect them [Eskom]. They’re not buying oil or even diesel from Russia or Ukraine.” It simply comes down to mismanagement and “a lack of planning.”
“There was no planning at Eskom where they should have had their pricing on diesel at the global level which means they should have put a cap and bought excess stock. If you know you’re using one hundred million litres of diesel annually, you should have gone into the market saying, ‘how can I start making sure I protect myself against the price rise?’ That has not happened. They are buying on the spot probably, right now, which means on a daily basis, as the price changes, they buy on the spot, and they negotiate discounts in bulk, which is bad, bad management on any level. The problems at Eskom are multiple.”
The Russia-Ukraine war cannot be used as an excuse when Eskom has been “cancelling coal and shutting down power stations. They are causing a much more severe situation… In the last 10 years Eskom has spent almost R4 billion on diesel alone. It is unacceptable in any scenario,” said Nchabeleng.
The lack of planning and mismanagement at Eskom will continue to hurt consumers’ pockets as Nchabeleng predicts there could be further increases to come at the end of this year.
“Every year Eskom would make an application to NERSA (National Energy Regulator of South Africa) and right now they’ve only been awarded about 9.7% increase that is allowable which means they could charge up to that amount but in the use of its own cost structure you must expect next year, let’s say end of this year, there should be another reason for a price increase.”
