Eskom’s R30 billion plan to avoid stage 10 load shedding: report

 ·15 May 2023

Eskom will renegotiate its diesel budget with the National Energy Regulator of South Africa (Nersa) as it needs more money to burn fuel to accommodate the electricity minister’s winter plan and the exemptions ordered by the nation’s High Court, reported Bloomberg.

On Friday (5 May), the Pretoria high court ruled in favour of 19 interest groups who sought urgent relief for specific sectors to be spared from load-shedding.

According to court papers brought before the court, load-shedding was against South Africans’ constitutional rights. The judge ordered the minister of public enterprises, Pravin Gordhan, to ensure that Eskom provides alternative sources of electricity to these institutions.

Institutions in question included police stations, hospitals, schools and clinics.

Eskom’s interim spokesperson, Daphne Mokwena, said the utility was studying the judgment and had plans to challenge it but added that there were also plans to “renegotiate the diesel plan with the treasury and Nersa to ensure the utility can cover for the shortfalls that will be experienced,” reported the Mail & Guardian.

“The utility is also working on the winter plan and is awaiting confirmation from Nersa to enable us to increase the diesel price from R8 billion to at least R30 billion in accordance with the minister of electricity’s plan,” Eskom said.

“There was R8 billion dedicated to purchasing diesel, and out of the R254 billion relief funds for Eskom, R22 billion would be directed to buy diesel,” said electricity minister Kgosientsho Ramokgopa.

Eskom uses diesel to power open-cycle gas turbines ( OCGTs) when outages and breakdowns occur at its coal-fired plants. The OCGTs make up for a shortfall in generation capacity and help the power utility to prevent the need for higher stages of power cuts.

Plans to burn large quantities of diesel follow Ramokgopa’s presentation in April, in which he proposed to stave off deeper power cuts by increasing the use of diesel turbines, building more storage capacity to store the fuel, and extending the use of coal-fired units set for decommissioning over the next few years.

According to a copy of a presentation seen by Bloomberg, Eskom would need to increase its budget for diesel. The plan showed that a special dispensation could reduce costs by allowing Eskom to purchase the fuel directly.

According to the Mail & Guardian, Ramokgopa told the National Council of Provinces on Tuesday (9 May) about the utility’s plan to burn R30 billion of diesel and that more is needed to keep the lights on.

“The question is not whether the fiscus can afford [a blackout] but whether the South African economy can afford it,” said Ramokqopa.

“We have a choice of saving the billions to run open-cycle gas turbines and save the economy, or choose not to spend and allow the South African economy to collapse.

“Our principal occupation is saving the South African economy, especially the poor, who are disproportionately affected by load-shedding,” added the minister.

The utility’s winter strategy is predominately reliant on its diesel plan, which is now being updated as the country enters colder months.

If the plan to increase its diesel budget is not approved by Nersa, South Africa could see the utility implementing stage 10 load-shedding, said the Mail & Guardian.

Ramokgopa argued that money was available for the utility to use, but Nersa stood in the way.

Read: Eskom employees arrested after spending R940,000 on a container worth R20,000

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