{"id":671689,"date":"2023-03-10T11:08:55","date_gmt":"2023-03-10T09:08:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=671689"},"modified":"2023-03-10T13:05:09","modified_gmt":"2023-03-10T11:05:09","slug":"eskoms-big-turnaround-plan-is-failing","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/671689\/eskoms-big-turnaround-plan-is-failing\/","title":{"rendered":"Eskom’s big turnaround plan is failing"},"content":{"rendered":"

On 22 January 2023,\u00a0Eskom chair Mpho Makwana said<\/a><\/strong> the group had embarked on a turnaround journey to improve plant performance and reduce load-shedding. This turnaround plan is failing.<\/p>\n

When the new Eskom board was appointed, Public Enterprises Minister Pravin Gordhan gave it the mandate to increase the energy availability factor (EAF) to 75%.<\/p>\n

EAF is a core performance metric for Eskom because it is directly linked to load-shedding. When the EAF declines, less power is available, which typically leads to load-shedding.<\/p>\n

Eskom\u2019s EAF has been declining for years because of poor maintenance at power stations and increased breakdowns.<\/p>\n

Five weeks ago, Makwana said the board’s plant performance recovery plan was at the final stages of approval.<\/p>\n

\u201cIt will be driven vigorously, and an external project management company will assist the board in stress testing and monitoring the execution of this recovery plan,\u201d he said.<\/p>\n

The Eskom chairman cautioned that Eskom\u2019s coal fleet recovery would not be achieved within the short term. \u201cIt will take at least two years to improve the EAF from the current 58% to 70%,\u201d he said.<\/p>\n

\u201cThe journey of the turnaround will see a stretch target EAF being driven toward 60% EAF by 31 March 2023, a mere ten weeks away, then 65% EAF by 31 March 2024 and 70% by 31 March 2025.\u201d<\/p>\n

He said the key levers to the success of the recovery of the Eskom fleet is fixing the systematic issues that are troubling the organisation.<\/p>\n

The problems include leadership, organisational culture and poor internal controls required to operate an organisation. \u201cThese will be embedded as part of the recovery plan,\u201d he said.<\/p>\n

Time of reckoning is approaching \u2013 and it is not looking good<\/strong><\/p>\n

With less than four weeks until the first deadline, 31 March 2023, it looks unlikely that Eskom will reach its 60% AEF target.<\/p>\n

Eskom\u2019s weekly generation statistics show that its energy availability factor has been declining in February.<\/p>\n

In week 8 of 2023, Eskom\u2019s EAF was 51.13%, significantly lower than the 54.67% two weeks earlier.<\/p>\n

The average EAF in 2023 is 52.11%. It is misguided to expect it to suddenly jump to 60% by the end of the month.<\/p>\n

Eskom\u2019s acting head of generation, Thomas Conradie, said last month the company could not reach an EAF of 60% by 31 March.<\/p>\n

The main culprit is breakdowns, which, in combination with planned maintenance, is driving Eskom\u2019s generation availability down.<\/p>\n

Eskom\u2019s failed turnaround strategy should not come as a surprise. Many experts have warned that the board can do little to improve the power utility\u2019s performance.<\/p>\n

Makwana said that in their first 112 days, the Eskom board had more than 50 meetings of their various committees.<\/p>\n

Unfortunately, these high-level strategic meetings will do little to stop corruption, mismanagement, and incompetence at Eskom\u2019s power stations.<\/p>\n

Former Eskom generation executive Rhulani Mathebula said fraud, corruption, funding constraints, poor planning, and shoddy work were behind the power utility\u2019s decline.<\/p>\n

Strong leadership is needed to address these issues, including cutting the workforce, firing corrupt and incompetent employees, and doing away with poor procurement rules.<\/p>\n

However, the government has been a hindrance to implementing the changes needed to fix Eskom\u2019s problems.<\/p>\n

The declining EAF should, therefore, be expected, as nothing concrete was done to address the real problems at Eskom.<\/p>\n

\"\"<\/p>\n

This article was first published on Daily Investor and reproduced with permission. Read the original here<\/a><\/strong>.<\/em><\/p>\n

\n

Read: Eskom is running out of load shedding stages \u2013 fast<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Eskom’s board planned to boost energy availability by the end of March. That’s not going to happen.<\/p>\n","protected":false},"author":93,"featured_media":671729,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[1164,26],"class_list":["post-671689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-eskom","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/93"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=671689"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671689\/revisions"}],"predecessor-version":[{"id":671767,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671689\/revisions\/671767"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/671729"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=671689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=671689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=671689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}