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‘Protecting the economy’ — Ramokgopa defends spending billions on emergency diesel

‘Protecting the economy’ — Ramokgopa defends spending billions on emergency diesel
Electricity Minister Kgosientsho Ramokgopa. (Photo: GCIS)

Eskom has spent R12.4bn on diesel since April, a cost that Energy Minister Kgosientsho Ramokgopa has said is necessary to protect South Africa’s economy.

‘You have to make a choice on whether you continue to burn this diesel, essentially expending a lot of money, and protect the South African economy — or allow the economy to go into free fall,” said Minister of Electricity Kgosientsho Ramokgopa on Sunday during his weekly media briefing on the implementation of the Energy Action Plan.

Ramokgopa was referring to the R12.4-billion Eskom spent on diesel from the start of April until now — R9.2-billion of which was spent on burning diesel at Eskom plants, the rest on buying electricity generated by independent producers that burn diesel for their open-cycle gas turbines.

Read more in Daily Maverick: Billions blown as Eskom burns through its emergency-use diesel

“I really want to emphasise that they [Eskom] were not surprised by these numbers,” said Ramokgopa. “It was always part of our deliberate strategy to protect the South African economy.”

Daily Maverick has reported that burning diesel to run Eskom’s open-cycle gas turbines (OCGTs) — intended only for dire emergencies or use during peak demand periods — is a centrepiece of Ramokgopa’s short-term plan to stave off higher stages of blackouts, especially during winter.

In May, Ramokgopa told Daily Maverick that he predicted that a diesel budget of R30-billion would run dry before the financial year was over. 

“We did say, even at the time, it’s going to come at a great cost to the fiscus,” Ramokgopa said.

That was why R8-billion was provisioned from the 18.65% electricity tariff increase that was recently approved by the National Energy Regulator of SA for Eskom during 2023/24, and R22-billion provisioned from the funds allocated to the power utility from the fiscus in February.

Eskom generation manager Bheki Nxumalo said at the briefing that in the previous financial quarter (beginning in April) the power utility had a diesel budget of R9.7-billion, but currently had spent only R9.2-billion. 

“So we are still within target,” said Nxumalo. “The idea is really for us to improve on EAF [energy availability factor] because that automatically will also reduce the diesel [expenditure].”

Rudi Dicks, the head of project management at the Presidency, said that in May, the budget was R2.7-billion, but R3.1-billion had been spent on diesel.

“Now, that is obviously high, and as you recall, May was a significantly difficult month for us, as many of the units had tripped and failed, and of course, the burn rate for the OCGTs was quite high,” Dicks said.

“But if you look at diesel to date so far … we are well on budget for diesel.”

Improved generation

Ramokgopa emphasised at the briefing that there had been a “considerable improvement” in the generation of power with this week’s (Monday to Friday) average generation capacity at 28,932 megawatts (MW).

“You can see that we are beginning to normalise available capacity to be upwards of 29,000 megawatts, in some instances very close to that,” said Ramokgopa, thanking the team at Eskom.

The top three performing plants are Medupi (one of the “newer” coal-fired power plants), at 88% EAF for July, Lethabo coal-fired power plant (86% EAF for July) and Matimba coal-fired power plant (72% EAF for July).

The available generation capacity had improved by 2,000MW, or 4.5%, Ramokgopa said.

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(Image: The Presidency)

More maintenance as summer comes

As the weather starts to heat up, the country will demand less energy from the grid, which means Eskom will increase the number of planned outages (scheduled maintenance), a “maintenance philosophy” Ramokgopa says is necessary for the sustainability of a plant.

eskom

(Image: The Presidency)

Now that generation is improving — breaching 60% EAF — and demand will come down in the warmer months, “The logical approach is that let’s be expedient, let’s not have load shedding at all,” Ramokgopa said.

“But, working with Eskom, we say that for long-term sustainability … it’s important that we continue to take out these units, as and when necessary,” Ramokgopa said, explaining that while planned maintenance might hinder the ability to reduce the impact of load shedding, “it’s short-term pain, but long-term gain”.

Koeberg costing Eskom

Eskom’s chief nuclear officer at Koeberg nuclear power plant, Keith Featherstone, on Thursday confirmed that Koeberg’s Unit 1 — which was meant to return to service 90 days ago but has since had several delays — would return to service by 3 November.

Koeberg’s Unit 1 was taken offline in December 2022 for planned maintenance, refuelling and life-extension works in preparation for its 20-year extension.

With one out of its two units out for planned (but seriously delayed) maintenance, Koeberg had an EAF of 48% for the month of July.

Eskom’s Nxumalo said their focus was to get Unit 1 back online, adding that the “good news” was, “At least now, the major work on the replacement of the steam generators has been completed. Now we are at a period where we are dealing with the normal maintenance that we’ve got much experience on,” which gave Eskom confidence that it would meet the deadline of 3 November.

“As you know, there’s over 120 days delayed,  at huge costs in relation to Unit 1,” Ramokgopa said.

“And we don’t want that to overlap into the services of taking out Unit 2, which might compromise the licensing of individual units and Koeberg as a  whole.”

The delays in returning Unit 1 to service have caused serious concern for Ramokgopa, as Unit 1 leaves the grid short of 920MW of power — equivalent to nearly one stage of rolling blackouts, and the delay puts the scheduled maintenance of Unit 2 — originally scheduled for September and now pushed to November — at risk.

Extending the life of old coal-fired power plants

“We’ve made the point that, given the crisis that is confronting us of existential proportions, we think that there are power stations that were meant to be decommissioned that we must delay the decommission,” Ramokgopa said.

He was referring to three of Eskom’s oldest coal-fired power plants, Camden, Grootvlei and Hendrina, which were meant to be decommissioned by 2025 and 2027, but Ramokgopa is reconsidering the closure dates in light of the energy crisis.

Read more in Daily Maverick: Electricity Minister Kgosientsho Ramokgopa to push for extending life of ageing coal-fired power station

Ramokgopa said they would be informed by safety, cost and emissions.

He said in terms of the continued safety and the cost associated with those plants continuing to operate, the team was comfortable that, “If you juxtapose that [cost and safety] with the cost of the South African economy, it’s justified.”

Nxumalo said they had been given money for maintenance on Camden, Grootvlei and Hendrina as part of their life-cycle management from the government and the Eskom board.

“But as I speak to you, I think, the only leg that is missing is the modelling in relation to the emissions,” Ramokgopa said. “And I did say that we will share with you once we get to that point.”

Ramokgopa said the team was getting assistance in modelling what the impact on emissions would be if they were to extend the life of the plants.

“We’ve got an obligation to protect the health of communities in that area.

“We’ve committed to the issues around the international agreements in relation to the decarbonisation,” Ramokgopa said, referring to the commitments made by the South African government to the international community in an $8.5-billion deal to retire the power stations and reduce the country’s emissions.

“And we are very grateful that Cabinet and Eskom have agreed to … delay the decommissioning without tampering with our agenda of meeting our international obligation with regard to the net zero path.”

At the 2015 UN Climate Change Conference (COP21) in Paris, South Africa, (along with 195 other nations) signed the Paris Agreement, which requires the country to submit its Nationally Determined Contributions every five years as a mechanism to track and reduce national emissions.

“And the good news as well is all of these older plants were fitted with the latest technology in terms of the emissions controls … so they are not the worst emitters,” Ramokgopa said.

However, it’s pertinent to note that South Africa’s air quality standards specifically for sulphur dioxide, the most damaging air pollutant to health have been dubbed hopelessly weak and inadequate” by experts. DM

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Comments - Please in order to comment.

  • Denise Smit says:

    On what level loadshedding would we have been if a lot of us had not on our own account installed solar energy, 4 400 megawats of it. This is all optics from the ANC government for next years elections. Nothing has changed. We are changing it with our own money , not the corrupt ANC. Denise Smit

  • Graeme J says:

    Planned maintenance should not be a negotiable subject for Eskom. It is absolutely essential if the plants are going to survive. The shocking state of the Johannesburg infrastructure is a prime example of what happens when planned maintenance is not performed. In fact, that probably goes for much of the rest of the country too.

  • Gerrie Pretorius says:

    I wonder if the OCGTs are being maintained?! This is the last resort for the anc to hang on to power in the 2024 elections. They will burn gas (money?) and run the OCGTs into the ground and bankrupt SA just to stay in power.

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