Eskom implements major electricity cuts

13 Feb, 2019 - 00:02 0 Views
Eskom implements major electricity cuts

The Herald

JOHANNESBURG. — South Africa’s power utility Eskom implemented major electricity cuts for a third straight day yesterday, as a shortage of generating capacity exposed the frailty of the struggling state-owned firm despite government promises to revive it.

President Cyril Ramaphosa is trying to reform Eskom, which supplies more than 90 percent of the power in Africa’s most industrialised economy but is drowning in more than US$30 billion of debt, to lift the economy before an election in May.

The cash-strapped company warned of wider controlled power cuts on Monday after six additional generating units unexpectedly went offline. Offices, shops, factories, traffic lights and private homes were hit on Monday by “load-shedding”.

Eskom said it would cut 3,000 megawatts (MW) of power from the national grid from 0600 GMT yesterday, likely until 2100 GMT, a day after cutting 4 000 MW in the worst power cuts seen in several years.

Around a third of Eskom’s 45,000 MW capacity is offline.

A senior generation official, Andrew Etzinger, told Reuters that around 11,000 MW was offline because of plant-related problems, while approximately 5,000 MW was out of service because of planned maintenance.

A further 2,000 MW was unavailable because of a shortage of diesel. State-owned oil company PetroSA said it was in talks with Eskom over emergency diesel supplies. The power crisis also prompted an urgent meeting of Eskom’s board of directors and executives with Public Enterprises Minister Pravin Gordhan on Monday, when it also pummelled the rand currency. Yesterday, the rand was little changed against the US dollar. Etzinger said Eskom was aiming to end the power cuts by the end of the week by bringing some generating units back online.

“We’re struggling,” said Eunice Mashaba, a manager of a textile shop north of Johannesburg.

Some firms in the mining sector, the backbone of the country’s economy, are looking at alternatives to reduce their dependence on Eskom. Miner Harmony Gold said yesterday that it was in talks to build a 30 MW solar plant to supply power to some of its assets, in an effort to cut its electricity costs and dependence on Eskom.

“Our Eskom bill is massive. To replace Eskom would be a fallacy, we won’t be able to do that. However, where we have long-term projects we can start building solar plants,” Harmony Chief Executive Peter Steenkamp said at a presentation of the company’s results.

President Ramaphosa, who announced a plan last week to split Eskom into three separate entities in an effort to make it more efficient, has said the latest power cuts are “most worrying”.

“That comes as quite a shock. It is reported that there are six units that are down – that is most worrying, most disturbing,” said President Ramaphosa during a live Twitter broadcast.

The president’s plan to split Eskom faces opposition from powerful labour unions and from within his ruling African National Congress party, while some analysts have said a bolder approach is needed to address the financial rot at the utility. Etzinger said Eskom was for now treating unplanned outages at some of its power stations as technical breakdowns, despite speculation from analysts that disgruntled union members could have sabotaged some units.

“There’s no reason to believe it’s sabotage,” he said. The South African Chamber of Commerce and Industry (Sacci) also expressed its worry that load shedding would affect investment, and eventually become the problem of all South Africans.

“We have to find a solution for Eskom because the power utility is now becoming a risk that the country itself face because if that thing doesn’t work out . . . it’s too big to fail. It will collapse and take everyone else down with it,’‘ said Sacci CEO Alan Mukoki.

Ratings agency Moody’s said on Monday an “unbundling” of Eskom into different units for generation, transmission and distribution would pave the way for greater transparency but do little to solve the firm’s financial difficulties.

President Ramaphosa’s efforts to reform Eskom have been hampered by fiscal constraints, as well as a sharp deterioration in Eskom’s power plant performance after years of mismanagement during which critical maintenance work was delayed. — Reuters/News agencies.

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