Cash-strapped Eskom needs R187bn to meet emissions standards
Eskom, which uses coal-fired power plants, has been granted a reprieve until 2020 to meet air emissions standards
Eskom needs about R187bn to comply fully with existing legislation curbing harmful emissions, a government presentation to parliament showed on Wednesday.
The power utility, which uses mainly coal-fired power plants to generate electricity, is one of 37 top domestic polluters, including Sasol, granted a five-year reprieve by the government until 2020 to meet air emissions standards. The new minimum emissions standards for air quality laws in SA, which cover particulate, sulphur dioxide and nitrogen oxide emissions, came into effect on April 1 2015.
“Complete compliance with the minimum emissions standard would require an estimated R187bn,” the presentation by the department of public enterprises said. Africa’s biggest public utility supplies more than 90% of SA’s electricity, relying largely on ageing, heavily polluting coal-fired power stations but does not generate enough cash to meet its debt-servicing costs.
Project delays and cost overruns at Medupi and Kusile, two mega-coal plants being built by Eskom, largely contributed to Eskom’s debt ballooning to R440bn.
“Given the current financial constraints, at this stage Medupi will be prioritised to be retrofitted with flue-gas desulphurisation (FGD technology),” the department said. The government has said that any new coal plants would need to have emissions-reducing technology, such as FGD.
In September, Eskom said it might have to shut some plants if it fails to reduce emissions, raising the prospect of further power cuts in the county and also putting more pressure on the government which has had to bail out the debt-ridden state-owned enterprise (SOE) to keep it afloat.
Eskom has applied to the department of environmental affairs over postponements of its obligations under the legislation to meet the emissions and air standards.
Ageing plants and poor maintenance has triggered load-shedding throughout the year, putting pressure on key economic industries, such as mining, as the country skirts a recession.
The latest bout of nationwide blackouts came after repeated power cuts in February and March, which hit the economy and pushed the government to grant Eskom a R59bn bailout on top of a R236bn bailout spread over the next 10 years.