The ‘truth’ behind no load shedding – according to Andre De Ruyter

 ·9 May 2024

Former Eskom CEO Andre de Ruyter says the respite from load shedding is due to Eskom burning diesel “at a rate of knots,” adding that the private sector will largely take over electricity generation in the country.

De Ruyter was the keynote speaker at the PSG Financial Services Annual Conference, which started on 8 May 2024.

He mentioned that during his tenure at Eskom, he and former COO Jan Oberholzer only had a budget of approximately R6 billion per year to spend on diesel to fuel the utility’s open-cycle gas turbines to generate electricity.

He explained that previous management had to be very cautious and economical in using diesel, knowing their limited resources. However, the current budget for diesel this year under new management is R24 billion, which is four times more than what they had at their disposal during his time.

“Therefore, if the lights are on, it is because they are pouring a considerable amount of money into diesel at a rate of knots,” he said.

De Ruyter’s conclusion tracks with Eskom’s diesel bill.

Public Enterprises Minister Pravin Gordhan recently revealed that Eskom spent R65 billion on diesel over the past five years to fuel its open-cycle gas turbines (OCGTs).

This equates to R1 billion per month, and some experts—such as energy analyst Clyde Mallinson—say it is not even close to the total spend on diesel.

“The power utility spends another 50%, on average, on independent power producer open-cycle gas turbines,” he said.

After adding these, Eskom spent around R36 billion on diesel over the last year and closer to R100 billion over the past five years.

However, Electricity Minister Kgosientsho Ramokgopa denied that the current 40-plus days without load shedding is due to burning more diesel.

He pointed out that Eskom burned far less diesel in April compared to the same time last year, instead attributing the lower levels of load shedding to improved performance from long-term maintenance initiatives bearing fruit.

De Ruyter to thank – economist

While there are many theories about the uninterrupted power supply—including that it is an election ploy by the ruling party and that Eskom is burning more diesel—economist Roelof Botha dismissed these.

Instead, he agrees with Ramokgopa that the current load-shedding respite is a result of the maintenance plan—though he differs from the minister by saying this is thanks to De Ruyter’s work.

Botha told Nuuspod that De Ruyter’s plans to do preventative maintenance to avoid unplanned breakdowns are coming to fruition.

De Ruyter championed the long-term maintenance programme during his time as CEO at Eskom, which included general overhauls and midlife overhauls of its ageing coal-powered fleet.

In 2020, shortly after becoming Eskom CEO, De Ruyter described his plans as “short-term pain for long-term gain” – a term co-opted and now frequently used by Ramokgopa when taking credit for the improved performance at Eskom.

Eskom’s fate

Speaking about Eskom’s future, De Ruyter said the utility will continue to have a role in South Africa, but it will mainly be limited to transmission.

According to the former CEO, the private sector is better equipped and more efficient than Eskom at generating electricity in the country and has more resources to do so.

If given the opportunity, the private sector will be able to supply electricity to South Africa more efficiently and cheaply than Eskom currently does.

De Ruyter advised the government to focus on extending the utility’s transmission grid rather than investing more money into Eskom’s ageing and deteriorating coal-fired power stations.

By doing so, the private sector will be able to take over generation while Eskom continues to play a role in South Africa’s electricity market.

De Ruyter has discussed on multiple occasions how Eskom’s unbundling will determine the utility’s future in this regard.

Read: Eskom kissing its R9 billion-a-year headache goodbye

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