SA's Eskom vows to avoid load shedding

It said Thursday that coal stockpiles across all its coal-fired power stations were at an average of 35 days, excluding Medupi and Kusile, which were still under construction.

Stakeholders have been concerned about possible load shedding after the utility announced last week that seven of its power stations had coal stock levels of less than 20 days.

The country faced rolling blackouts in 2008, but Eskom interim CEO Phakamani Hadebe said the situations were not comparable, as stockpiles in January 2008 were at an average of 12 days and only improved to average 24 days in July due to production and delivery were severely affected by abnormal rainfall, as well as other challenges at the time.

Eskom said there were a number of reasons for the current low stock levels, but highlighted the historical underinvestment at cost-plus mines due to capital constraints, as well as the undersupply on both coal quality and quantity by the Tegeta Exploration and Resources' Optimum Coal mines, which were under business rescue.

Optimum was put into business rescue in February for the second time after it failed to meet contractual deliveries to Eskom's Hendrina power station in January and could not pay the penalty amount issued by the utility.

However, Eskom said it had the situation covered and had implemented a plan to manage a shift in plant performance and coal stock levels in the short-term to improve stockpile levels at the six power stations where levels were below minimum, making load shedding unlikely during the country's higher power usage winter season.

"The resilience of the power system was evidenced in March this year following a number of plant breakdowns and a number of units on scheduled maintenance. We expect several units to be back on line before the end of this month and will further strengthen the power grid ahead of the winter season," Eskom said.

The recovery plan included securing additional coal supplies, redirection coal stocks from other power stations and negotiating tenders for 100 million tonnes of coal over the next five years.

Eskom is also busy concluding an interim coal supply agreement with the Tegeta business recue practitioners for supply from Optimum Coal to the Hendrina power station.

Optimum is obliged to supply 40,000 tonne per month of coal to Hendrina at a set price, with Eskom saying last week it was considering the business recue practitioners' proposal to halve the monthly tonnage for the remaining contract period, but had not agreed to this yet or any price adjustments.

 "The challenge of coal stock levels below the required target at some of our power stations is not ideal, more especially as the organisation prepares for the traditionally higher energy usage period in winter", Hadebe said.

"We have, however, put measures in place to mitigate the situation and if the current state does not improve, we will meticulously reassess the situation, review our plans and take the necessary action."

He said Eskom was confident that its plants, notwithstanding anomalies, would be able to meet winter demand, with a target set to improve plant performance and achieve a "sustainably healthy electricity system" by balancing maintenance, reducing unplanned breakages and increasing plant availability.

Eskom, which has monopoly on South Africa's power supply, has been dogged by crises over the lasy decade, with both Medupi and Kusile running very behind schedule, governance and corruption issues, money problems, municipal debt issues, disagreements with coal supplying mines and aging infrastructure. 

However, minister of energy Jeff Radebe recently signed power purchase and implementation agreements with 27 renewable energy independent power producer projects

Eskom has also contracted 84% of the coal it requires over the next five years and has a build programme that is expected to deliver 6,382 MW to be commissioned over the same period.

"Continuing to fast-track delivery of the build programme remains a critical enabler for Eskom to support the network sufficiently and to ensure that South Africa has optimal base load capacity and transmission infrastructure to grow the South African economy," Hadebe said.