Eskom blames capacity decisions for high costs

On Friday, power parastatal Eskom blamed its rising expenditure costs and supply difficulties on South Africa’s late decision in building new generation capacity.

This, along with the requirement for Eskom to keep the lights on at all costs, led to higher power plant and Open Cycle Gas Turbine (OCGT) usage, according to Eskom’s generation group executive, Thava Govender.

“As the de facto supplier of last resort, our mandate required us to use whatever resources we had in order to keep the lights on,” he said. “The electricity system was constrained and a decision was made to delay maintenance, which then led to deterioration of plant, most of which were already in midlife.”

Eskom primary energy division general manager, Dan Mashigo, pointed out that this had led to an increase in coal-burn volume per power station beyond design parameters. This meant that the state entity had to go into building mega projects – such as the Medupi Power Station – as quickly as possible with very little planning time.

Gerrie Bronkhorst, Eskom’s capital expansion general manager, said that this had resulted in problems during building - such as delays and cost movements which impacted available capacity and funding.

However, Eskom said it had drawn up plans in order to prevent similar issues in the future.

“We have created risk-adjusted schedules to provide a more realistic view on scheduling and funding and continue to focus on bringing new capacity on line,” said Bronkhorst.

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