Good news for Eskom and load shedding in South Africa

Power utility Eskom says that it is beating even its best-case scenario for winter load shedding, as the country passes 80 days of no outages and systems looking green.

The group said on Friday that its winter outlook had planned for around 15,500MW of unplanned outages between April and August 2024, which would have necessitated stage 2 load shedding.

In its best ‘base’ case, outages would have been kept at 14,000MW and only a couple of days of stage 1 load shedding would be needed.

However, to date, Eskom has managed to keep outages consistently around 12,000MW (approximately 2,000MW better than its base case), with outages even dropping as low as 9,500MW.

“This performance comes from a sustained multi-dimensional program consisting of adequate human resources, aggressive planned maintenance on the back of financial certainty, the use of Original Equipment Manufacturers for critical systems, and progressive implementation of interventions in response to the VGBe findings,” it said.

The performance also counters concerns raised by South Africans that load shedding was only temporarily kept at bay for the national election in May and that it would return soon after.

This represents a remarkable turnaround for the group – though the risk of load shedding returning is still ever-present, as any losses beyond the 15,500MW plan could result in outages.

Further to this, while the national utility may have its grid under control for now, local energy issues persist.

Less diesel

More good news for Eskom is that the improved performance has also had a positive impact on its finances, given the significant year-on-year reduction in the usage of diesel through Open-Cycle Gas Turbines (OCGTs).

This has translated to over R4 billion in “savings” in the current financial year, it said.

While this is a positive result, it should be noted that the utility’s diesel spending for OCGTs has always been exceptional, and the “savings” aren’t likely to reverse the group’s troubled financial position.

The utility has spent the last few years burning far more diesel than is technically allowed by energy regulator Nersa, and it has often served as baseload during times the coal stations were failing.

Thus any reduction in their use should be seen as a return to proper and ‘normal’ functioning.

Outside of load shedding, the company faces multi-billion rand losses, including those derived from lost sales due to South African households, corporates and entire industries moving away from its services.

Eskom CEO, Dan Marokane—who has now completed his first 100 days on the job—said that the group will move to combat this by rebuilding trust and credibility in its operations with the intent to draw future investment.

“It is our intention to remain a critical player in South Africa’s evolving future energy market,” Marokane said.

Over the next 36 months, he said Eskom will pursue key strategies, including:

• Increasing the Energy Availability Factor (EAF) to 70% in the next 12 to 36 months.
• Returning more than 2,500MW in capacity to the grid by March 2025 and developing an executable initial pipeline of at least 2,000MW of clean energy projects by 2026.
• Re-baselining the cost trajectory and improving efficiencies.
• Advocating and pursuing a sustainable solution on municipality debt.
• Delivering the unbundling of the Distribution and Generation divisions.
• Accelerating the implementation of initiatives to enable a Just Energy Transition.

“Eskom will continue to focus on implementing generation recovery, strengthening governance and tackling crime and corruption, while future proofing the organisation to enable energy security, growth, and long-term sustainability to the benefit of South Africa and sub-Saharan Africa,” he said.

Read: South Africans are dumping Eskom – and it shows in one graph