Eskom’s decision to postpone the decommissioning of three of its older, coal-fired power stations will cost the utility between R85bn and R90bn.
These costs would mostly be for purchasing the coal to power stations and operational maintenance, Eskom CEO Dan Marokane told the Presidential Climate Commission (PCC), at a meeting in Johannesburg on Friday.
“The revenue [we will earn from running these stations] will amount to about R100bn so on a net basis [the costs] cancel out,” he said.
Eskom announced in May that the board approved plans to delay the decommissioning of Camden, Hendrina and Grootvlei power stations to 2030. Previous decommissioning schedules provided for the Grootvlei and Camden power stations to be fully decommissioned by 2025 and Hendrina by 2026.
Marokane said delaying the shutdown of these power stations was necessary to ensure secure and adequate electricity supply, given the deteriorating performance of the coal fleet.
There would also be a power supply gap due to the failure of several projects under the government’s emergency power procurement round to proceed to construction.
Four projects under the risk mitigation energy procurement round, including Karpowership SA’s controversial gas-to-power floating power plants, with a combined dispatchable capacity of 1,400MW, came to a halt in January when Eskom decided not to extend the budget quotes that guaranteed them access to the transmission grid.
Commissioners of the PCC were concerned about whether SA would still be able to meet its emission reduction targets given that the electricity sector accounts for about 70% of SA’s total emissions.
Marokane assured commissioners that Eskom was still committed to achieving its 2030 emissions reduction targets.
Eskom, he said, would reassess the need to keep running these stations on an annual basis.
“The decision to extend the life of these stations was not taken lightly and we need to consider more frequently [whether we need to keep running them]. We have looked at all the key components of the national circumstances and as difficult as it is, this is the option we found would be the most practical [to ensure energy security] for the country,” he said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.