Eskom needs additional 3 000MW to avoid load shedding

Posted On Wednesday, 22 April 2015 15:37 Published by
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Eskom’s newly appointed acting CEO Brian Molefe says the utility needs to find an additional 3 000 Megawatts of power in order to maintain power plants without implementing load shedding.

 Brian Molefe

The acting CEO said this when the Eskom Board, led by acting Chairperson Dr Ben Ngubane, appeared before Parliament’s Portfolio Committee on Public Enterprises on Wednesday to give an update on governance and operational challenges of Megawatt Park.

“We have a maintenance backlog due to commitments made to ‘keep the lights on’ and this has led to deteriorating power station availability and subsequent load shedding. “We however need a minimum of 3 000 Megawatts and a maximum of 5 000 Megawatts buffer either through supply-side or demand-side options in order to close the backlog within three to five years and avoid load shedding,” he said.

The briefing comes after the power utility was, in recent times, faced with several challenges at governance and power plant level that saw several board members being suspended pending an independent inquiry, while load shedding caused an inconvenience to business and residential customers.

Following the suspensions, Board chairperson at the time Zola Tsotsi announced his resignation, with Minister Lynne Brown as the shareholder announcing the appointment of former SABC Board chair Dr Ngubane to his position. Transnet CEO Molefe was then seconded to act as the CEO at the power utility.

Molefe said governance issues had since been resolved at the parastatal and that they were awaiting the conclusion of the inquiry on the suspended executives to give an update at a later stage. Last week, Minister Brown apologised to the nation following losses in generating power that forced Eskom to implement stage three load shedding.

Several units had to be taken out of service for unplanned maintenance caused by technical faults, the Minister said. This led to 9 500 Megawatts being lost when units went off-line. Eskom has a total installed capacity of 42 Megawatts, but on the demand side, the power utility was faced with a reality that it has to catch up on maintenance, Molefe said.

Molefe said Eskom was currently doing a financial assessment to see how much it would need to get the additional 3 000 Megawatts, and whether it would raise the funds through a tariff increase or through borrowing. During stage three load shedding, a typical family would not have electricity for 10 hours in a week, Molefe said.

He said Eskom was currently not in a bad financial position, having posted profits of R21 billion last year. “From a financial point of view, Eskom is not in a very bad position. “On the cash position, Eskom has a substantial amount of facilities that have been negotiated … In addition, National Treasury has made a commitment to give Eskom R23 billion, which will be given to us in two [transactions] during this financial year.

“With that additional income from Treasury, we are not saying Eskom is about to be declared bankrupt. We will be engaging with rating agencies to find out what it is they would love to see for Eskom to be re-rated to a positive rating.” 

Last modified on Wednesday, 22 April 2015 17:59

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