Eskom adds R1bn to diesel bill to keep the lights on
Eskom has spent R200m on diesel in 2018, and says although it is expensive, diesel generators are cheaper than load-shedding’s cost to the economy
Eskom expects to spend as much as R1bn more on diesel generators, which it plans to run as needed over the next four months as it moves to pull the power system back from the brink.
The growing operational costs are particularly bad news for the utility, which is already in a debt trap as it spends more on debt servicing than it generates in revenues. It has applied to the National Energy Regulator of SA for an electricity tariff hike of 15% per year for the next three years.
Briefing media on the state of the system on Friday morning, Eskom CEO Phakamani Hadebe said between R750m and R1bn had been budgeted to run open-cycle gas turbines on diesel.
The utility has spent R200m on diesel usage in the year to date, and said this week that although expensive, diesel generators were cheaper than load-shedding’s cost to the economy.
Ten out of 15 coal-fired power stations are also experiencing supply shortages and stockpiles now face the added risk of getting wet from summer rains.
The diesel usage is part of a nine-point plan Eskom is putting in place to fix pressing problems.
The diesel power will provide support to the system so that planned maintenance of power stations can be carried out into March 2019, Hadebe said.
“Maintenance is not where it was supposed to be and we are paying the price for that and trying to resuscitate and change that.”
The budget, however, does not account for any additional generators for unplanned outages. It also does not mean that that the risk of load-shedding has disappeared. Willy Majola, acting group executive for transmission, said the risk remained high over the festive season.
Hadebe said Eskom’s story was not an “exciting one” but a story that had to be known as major challenges still remained.
“Before we turn around this huge institution, it’s going to be a tough journey.”