South African’s placed their future hopes on the expectation that the 2020 SONA would present solutions to Eskom’s economy-destroying runaway costs and instability. However, the question which now is whether the President did enough to fix up Eskom. A healthy dose of reality on this matter might be useful.
Our Government has been grappling with Eskom and electricity issues since 2001 and attempted to solve the problem through an unsuccessful effort to entice the private sector into building power stations under a capped rate of return. Later, our government announced an accelerated and grossly fraudulent New Build – which initially included four new power stations and the now-scrapped French Areva Nuclear deal (a $2.5bn international corruption scandal).
Government’s latest salvo to avoid the importation of 5GW of power (as suggested by Energy Analyst Ted Blom to create a window for critical maintenance) is to ask the private sector to revisit their excess generating capacity – estimated at around 600MW. Alongside questionable legislative amendments, new IPP’s are hurried through the regulatory minefield to obtain operating licences and sell power.
Blom scoffs at this “half-baked” idea stating that the available capacity is from standby generators not designed to run 24/7 for months or years on end. Placing such demand on a standby fleet will result in more frequent breakdowns than currently endured by the Eskom stations. Secondly, to synchronise each set with the grid will, in most cases, take a long time and cost millions of rands – given the shortage of available skills required to conduct such technical exercises. Thirdly, it would be an impractical nightmare for Eskom to fuel all the sets – given that Eskom on a good day struggles to service two fleets of diesel Gensets at Mosselbay and Atlantis.
Blom also suggests this self-inflicted crisis will not be resolved in under 18 months and believes the new Eskom CEO could have been misled.
According to Blom, each generation set will take at minimum 18 months to refurbish as most of the boilers have been trashed by sub-spec coal and stone. The most vital parts will need to be uniquely machined in Europe and then shipped to SA. Blom’s estimates for such an exercise exceeds five years. On top of this, Blom questions where Eskom will find the extra budget and estimates the task will cost over R600bn – adding to Eskom’s current R450bn debt.
Further, the above crisis management does not address Eskom’s dire coal issues. Blom was contracted in 2006/8 to help construct a coal “Roadmap to 2030”, which indicated some 20 new coal mines producing some 100 million tons pa would be required by 2016. To date, Eskom has not commissioned one new coal mine, yet continues to feed new boilers with the same questionable coal/rock mixture, worsening the maintenance-related loadshedding catastrophy.
In summary, Blom feels that the current electricity crisis will continue for at least the next five years. South Africans have been sold short once again as proposed solutions ignore critical thinking by experts familiar with the complex situation prevailing at Eskom.
Power to the people
BCom, BJuris, ACIS, MBA, D.Mine Eval, PmD