Due to repairs that have been made to Eskom’s power grid during lockdown – although not major repairs – there will be much less loadshedding this winter than anticipated.
“We don’t see any stage 2 or 3 during winter,” Eskom Generation Group Executive Bheki Nxumalo said.
Chief Operating Officer Jan Oberholzer said that the utility had recovered some partial losses and made improvements – to make up for the neglect of the system over the past decade – but the country was still not out of the woods. Proper “aggressive” reliability maintenance still had to be done.
“Until the end of July next year, the risk of load shedding will remain because of the unreliability and unpredictability of the system,” he said.
Eskom CEO André de Ruyter also warned that if Eskom did not get its act together, it would continue on a downward spiral.
“We have a debt of some R450 billion. We don’t have enough revenue to cover our debt service costs. We’ve had our challenges with the National Energy Regulator of South Africa (NERSA) and this is part of our quest to find cost-effective tariffs that will enable us to be a sustainable and viable business,” he said.
Eskom and NERSA have been in loggerheads over the tariff increases and De Ruyter said they are working on building the relationship with the regulator.
In addition, their operational expenditure has increased by 30% in the past five years, coal prices have augmented, while their procurement costs are higher than normal and load shedding is still not the thing of the past.
“Our business model is safe to say it’s outdated, the world of energy has changed around us, and we need to change along with it.”
However, De Ruyter said they have adopted the alternative of doing nothing and working around the clock to address the issues.
[Live] Eskom State of the System Address 2020 https://t.co/cby4xRQrVp
— Eskom Hld SOC Ltd (@Eskom_SA) May 21, 2020
He said there are no additional bailouts they are expecting from the government except for the R56 billion.
De Ruyter said they were working around the clock to improve their income statement, balance sheet and continue to restructure Eskom while improving the culture of employees. He said Eskom had managed to do short-term maintenance and was repurposing old power stations and cutting day-to-day costs.
While the generation plant is still not reliable and predictable as they would like it to be, they are working on improving the current plant performance to reduce the risk of load shedding.