Eskom loses R152 billion from offline units

[Nat Quinn]

Eskom loses R152 billion from offline units

 

Eskom loses around R152 billion a year from offline units, which limits its sales of electricity as it has to implement load-shedding to prevent its grid from collapsing.

This was revealed by the German consultancy group VGBE Energy, which the National Treasury commissioned to analyse the performance of Eskom’s coal-fired power plants and recommend how they can be improved.

The German engineers with extensive experience running coal-fired power plants spent four and a half months studying South Africa’s ailing power utility.

They went through Eskom’s coal fleet, plant by plant, to determine what changes the utility should make to improve the performance of the individual stations.

The team did not give much focus to the deteriorating finances of Eskom, as their sole focus was on the performance of the coal-fired power stations.

However, they did briefly outline the disastrous impact of offline units on Eskom’s finances.

Using the average unavailable capacity of 17,419 MW taken during the four-and-a-half-month study, they estimated that Eskom’s offline units cost the company R152 billion in revenue annually.

This excludes the cost of diesel burnt to mitigate load-shedding by running Eskom’s open-cycle gas turbine peaking stations.

According to the VGBE team, 1 MWh accounts for around R1,000, and if 17,419 MW of Eskom’s capacity is offline for a year, it will lose around R152 billion in sales.

“Unless there is immediate intervention, the situation will continue to escalate,” the German engineers warned.

They said the situation could even deteriorate overnight, with the VGBE team warning that South Africa could plunge into stage 13 load-shedding if urgent action is not taken at several power stations.

The experts were particularly concerned about the poor state of many of Eskom’s water treatment plants at some of its largest power stations.

For example, the Medupi and Matimba power stations share the raw water treatment plant, which is filling into disrepair and is unable to supply both stations at full capacity.

The engineers said this plant urgently requires, at the very least, maintenance and upgrading. If the existing plant fails, 12 units with 9,800 MW of capacity would go offline.

Moreover, the current water supply is insufficient to install the wet flue gas desulfurisation plant that needs to be built for the Medupi and Matimba sites by 2025.

The water treatment plant at Kendal is also in very poor condition and needs urgent maintenance and refurbishment. If that plant fails, six units – 3,840 MW of capacity– would be offline.

This means that if these ailing water treatment plants fail, 13,640 MW of generation will go offline – resulting in a record high stage 13 load-shedding in South Africa.

 

source:Eskom loses R152 billion from offline units – Daily Investor

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