After massively overspending on its diesel budget in the previous financial year, Eskom has not yet finalised a diesel budget for the current year which started on April 1.
To compensate for the poor performance of its coal-fired generation fleet Eskom resorted to running its diesel-powered emergency generation fleet harder than expected to avoid or limit load-shedding.
In the previous financial year to end-March 2023, this led to the utility spending more than three times the budgeted amount on diesel. Against an initial budget of R6.1bn Eskom spent R21bn on diesel to run the open-cycle gas turbines (OCGTs).
Eskom told Business Day that for 2023/24 it has spent R1.2bn since the beginning of April, but said it was still finalising its diesel budget for the year.
With less than a month to go before the official start of winter Eskom is also yet to release its official system outlook for the winter months. Briefing parliament’s select committee on public enterprises and communication last week on electricity tariff increases Eskom chair Mpho Makwana said the board and the executive have been engaged in various deliberations to see how to “ameliorate exposing SA to a tough winter”.
“We remain in consultation with key players such as the national electricity crisis committee, the department of public enterprises, and ministry of electricity. As soon as those consultations are done, we should be able to communicate to the country,” said Makwana.
In response to questions from Business Day, Eskom said it was still finalising its winter outlook and would be briefing the media in the “next week or two” on the level of frequency at which the utility was likely to implement load-shedding during the winter months.
Eskom GM of regulation Hasha Tlhotlhalemaje said in parliament last week that the National Energy Regulator of SA’s (Nersa) tariff decision for Eskom for the 2023/24 financial year made provision for diesel expenditure of R8.4bn.
This was a 123% increase compared with Nersa’s decision in the previous year which reflected, said Tlhotlhalemaje, the need to address load-shedding through the increased use of the diesel-powered generating units.
With this revenue allowance, Nersa assumed that Eskom would run the OCGTs at a load factor of 6%, compared with Eskom’s tariff application which indicated a load factor of 12%.
Eskom confirmed to Business Day that in March the OCGTs were run at a load factor of about 10% and for April (as at April 26) the load factor was 19.72% — three times higher than provided for under the Nersa revenue decision.
The last system update provided by Eskom in November 2022 predicted a worst-case scenario of 28 days at stage 3 load-shedding in June and July and 23 days of stage 3 load-shedding in August. This forecast was however based on assumption of about 16,000MW of unplanned generation availability and demand of 33,000MW.
The delay in bringing Koeberg’s unit 1 back online after a planned maintenance outage and the deteriorating performance of the coal-fired generation fleet now make these assumptions appear unrealistic. Unplanned breakdowns now frequently top 16,000MW — on Sunday total breakdowns were at 17,700MW and increased to 17,900MW by Monday night.
Minister of electricity Kgosientsho Ramokgopa has on various occasions sounded the warning that SA will probably have a difficult winter with higher stages of load-shedding.
He has previously said that Eskom can guarantee available generation of 27,000MW against average winter demand of 35,000MW. This would already require load-shedding to be implemented at stage 8 (8,000MW).
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