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Eskom: Load shedding will be ongoing problem without bailout

Eskom says it will run out of money to buy diesel by the middle of next month.

FILE: Eskom has warned that without additional funding, load shedding will be continuous and ongoing. Picture: EWN.

JOHANNESBURG - Eskom has warned that without additional funding to buy diesel, load shedding will be continuous and ongoing because the utility won't be able to operate its open gas turbines.

The utility says the power grid remains vulnerable and any technical issues or generator problems may force it to implement rolling blackouts at a moment's notice.

Eskom has experienced major supply problems since last year when a coal silo collapsed at the Majuba Power Station in Mpumalanga which reduced supply by about 1,800 megawatts.

Stage one load shedding was implemented on Friday for the first time this year when generators suddenly broke down, forcing the power giant to cut electricity without notice.

Eskom says it will run out of money to buy diesel by the middle of next month and it's waiting for feedback from government on whether it will receive funds to keep the lights on.

The utility has been running open gas turbines extensively in the last few months to keep up with electricity demands but at the same time spending billions of rands to buy diesel to operate them.

Eskom's Andrew Etzinger says by February, the parastatal will simply not have the money.

"If we are not able to secure the additional funding, it would mean quite a big risk of load shedding on an ongoing basis."

A government meeting on the power supply issues and how to help Eskom will take place soon.

At the same time, energy experts and economists have warned a government bailout will not help Eskom in the long-term to deal with the electricity crisis.

The parastatal said it's expecting about R20 billion from government to help it continue buying diesel.

Energy expert Chris Yelland says Eskom needs to look at the fundamental business problems.

"Throwing money at this is not the solution. It will become like a black hole if you don't address the underlying issues it simply means that in a period of time they will need more money."

Economist Iraj Abedian says a coherent national energy policy is needed.

"The government has failed to come up with a credible and sustainable national energy policy and therefore it has placed extraordinary pressures on Eskom."

On Monday, Eskom's financial woes remained firmly in the spotlight but there's no indication as to how or when government will assist.

Finance Minister Nhlanhla Nene reportedly read the riot act to Eskom bosses, saying they must sort out their problems which are affecting the economy.

It is understood government will "play its part" but Nene warns that day-to-day operations are the utility's responsibility.

Eskom spokesperson Andrew Etzinger says they are waiting for feedback from government on how they'll buy diesel when funds run out.

"The critical issues are being dealt with and at the right time, government will make an announcement."

Eskom says while the power grid is stable, load shedding remains a risk this week.

It warned South Africans must be prepared for load shedding at all times.

The company, which supplies 95 percent of South Africa's power supply, said the grid can change at any time.

Eskom has also been battling with ageing infrastructure and limited generating capacity.

POWER CUTS AFFECTING SEIFSA

The Steel and Engineering Industries Federation of South Africa (Seifsa) says the manufacturing industry contracted by 2.5 percent last year as a result of power cuts by Eskom.

Seifsa says the disrupted power supply led to a contraction of between five and 13 percent in the rubber, structured steel and general purpose machinery sub industries.

Last year, the metals industry was hit by a five month long strike in the platinum sector and a further month long strike by the National Union of Metalworkers of South Africa ( Numsa) before load shedding started in November.

Seifsa's members represent about 34 percent of the manufacturing sector and its chief economist says the power cuts are stifling growth.