Page 8 - AfrElec Week 26

AfrElec ESKOM AfrElec

Eskom to complete Medupi and Kusile

SOUTH AFRICA ESKOM is insisting that it will finish construc- disruptions.
tion of the 4,764MW Medupi power plant by the “To consistently achieve acceptable levels of
end of 2020 and the 4,800MW Kusile plant by energy availability, a focused maintenance pro-
2023. gramme is critical to avoid electricity supply dis-
South African Deputy President David ruptions, particularly when you are managing a
Mabuza told Parliament last week that the two fleet of old and unreliable power plants.
flagship coal-fired projects, which have been “We are pleased that the Eskom leadership
subject to years of delays, were crucial to ensur- has put a clear maintenance plan in place to
ing energy security in the country. ensure that the energy availability factor is kept
However, he did admit to MPs that the power at levels which will avoid unexpected electricity
sector remained under pressure, with frequent supply disruptions.”
threats of load-shedding. Eskom is implementing a series of reforms,
“Eskom has to deal with cost overruns and the deputy president said, that aim to reduce
defects affecting Kusile and Medupi power sta- costs significantly while improving the overall
tions … We are advised by the leadership of efficiency of the company. Key areas include the
Eskom that a great deal of progress has been cost of coal supply contracts and compensation
made in effecting corrective technical modifica- of employees.
tions, which are required at Kusile and Medupi,” Mabuza said Eskom was reviewing its head-
he said. count levels in a way that will balance and match
“Eskom has committed to completing business delivery outcomes, and will match
Medupi and Kusile power stations by the revised the core skills and improve organisational
dates of 2020 …and 2023 respectively,” he added. performance.
He did warn that the coronavirus (COVID- “As part of achieving operating efficiencies
19) pandemic might have an impact on the and cost reduction, Eskom has embarked on the
potential completion of the Medupi and Kusile re-negotiation of some of the coal contracts to
projects. bring them in line with the [value for money]
In further comments to MPs, he confirmed principle – achieve optimal pricing and ensure
that the government and Eskom had drawn win-win outcomes with the affected coal suppli-
up a clear maintenance plan for the utility’s ers, in the best interest of our country.”™
elderly power plants to avoid electricity supply

SA court ruling could allow Eskom to

pass on more costs to customers

SOUTH AFRICA SOUTH Africa’s High Court has overruled a Eskom had made the claim as the country’s
previous decision by South African regulator tightly controlled power sector rules allow it to
NERSA that limited the costs Eskom could recover funds lost to changes in coal prices, the
recover from customers for the three financial price of power supplied by independent power
years to June 30, 2017. producers (IPPs), high capital expenditure costs
Eskom had made a claim for ZAR66.6bn and lower than projected revenue.
($3.8bn) but NERSA ruled it could only recover The situation is caused by Eskom not being
ZAR32.69bn ($1.9bn). able to charge cost-reflective tariffs, but being
Eskom was claiming the money through a dependent on prices laid down by NERSA. As
mechanism known as the regulatory clearing such, in the three years to 2017, Eskom incurred
account (RCA), which would allow Eskom to costs which it was trying to recover from the
recoup the differences between its forecast reve- regulator.
nue and actual costs during those years. The prospect of high tariffs would relieve
The decision means that Eskom can now some financial pressure on Eskom, which has
again ask NERSA to consider its full claims for ZAR450bn ($26bn) of debt and has blamed
$3.8bn of costs. NERSA for being unable to raise tariffs by as
Eskom wants to recoup this money via bills much as it wanted in recent years.
paid by its customers. The court’s decision means The current court decision follows events in
that Eskom could in future recover more money February, when Eskom took NERSA to court
from customers’ bills, thereby pushing up the after the regulator refused to sanction the 16.6%
cost of electricity, a very unpopular move. and 16.7% tariff increases for 2020 and 2021 that

P8 www. NEWSBASE .com Week 26 02•July•2020