In its MYPD 3 Selective Reopener application hearing starting on Tuesday, Eskom\u2019s acting CEO Brian Molefe will argue that an increase in tariffs will shorten load shedding and improve overall generation stability.<\/p>\n
In a presentation to be shown on Tuesday morning, Molefe will urge the Energy Regulator (Nersa) to give Eskom an additional R11 billion per year to power its open cycle gas turbines (OCGTs), R5.8 billion funding per year for short-term contracts with independent power producers (STPPP) and further funds for an increased environmental levy.<\/p>\n
\u201cEskom is applying for the recovery of efficient costs relating to OCGTs and STPPP for the next three years,\u201d the presentation reads.<\/p>\n
\u201cEskom cannot wait for an RCA process to recover these costs due to the financial challenges facing the organisation.<\/p>\n
\u201cThis expenditure will contribute towards Eskom creating space to do necessary maintenance whilst mitigating the impacts of future load shedding,\u201d it says.<\/p>\n
\u201c[Eskom] requires an adjustment 10% linked to the extraordinary costs to limit load shedding.”Eskom is convinced that the only way to restore plant reliability is to put emphasis on proactive maintenance, which includes refurbishment,” Molefe will explain.<\/p>\n
“If this is done, availability should improve, but if outages continue to be deferred in order to keep the lights on, availability can be expected to deteriorate further.”<\/p>\n
Molefe will explain that Eskom\u2019s next generation new build assumptions in the MYPD application did not materialise.<\/p>\n
Medupi’s Unit 6 will only contribute 800 MW commercially by August (it does currently contribute between 500 MW and 800 MW intermittently), Molefe told media recently, while the only other plant delivering power is Sere – 100 MW.<\/p>\n
\u201cEnergy assumed to be delivered by each coal unit … is approximately 4,500 GW hour per unit per year,\u201d it reads.<\/p>\n
\u201cThis energy had to be replaced by other supply sources.\u201d<\/p>\n
\u201cDue to operational and financial challenges facing Eskom, allowance by Nersa for recovery of higher OCGT and STPPP costs is essential to allow Eskom to continue to utilise these supply options to help mitigate the impact of load shedding and contribute to space for generation maintenance,\u201d Molefe will tell Nersa.<\/p>\n
\u201cUnder the circumstances, [it is] still viable to use [the] expensive OCGT (approximately R2.75 to R3.00\/kWhr depending on fuel price) when compared to cost of unserved energy estimated by National Treasury to be between R9 to R15\/kW hour.\u201d<\/p>\n
\u201c[It] contributes to improvement of industry towards sustainability,\u201d he will explain.<\/p>\n
According to Eskom in the presentation, National Treasury’s viewpoint on the matter is:<\/p>\n
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