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Eskom: Load shedding may be implemented on Monday

Eskom has warned it could implement load shedding on Monday should it lose generating units during the day.

Picture: Pexels

JOHANNESBURG - Eskom on Monday announced that it had experienced some unplanned breakdowns amounting to more than 13,000 megawatts. It warned that its system was under strain.

On Sunday, Eskom said that its system had improved.

The embattled power utility said its teams would stabilise the system and generation fleet in order to meet Monday’s electricity demand.

Eskom has warned it could implement load shedding on Monday should it lose generating units during the day.

It said the power system was vulnerable and volatile with an ageing fleet that needed higher levels of maintenance.

The utility’s Dikatso Mothae said: “Should we lose some generation during the day, we will use emergency reserves to supplement capacity and may implement load shedding in the evening. However, if there are drastic changes, we may implement load shedding earlier.”

Over the weekend, President Cyril Ramaphosa said the power company would not be privatised. This was not the first time the ANC leader made the remarks.

WATCH: Eskom will be restored, not privatised - Ramaphosa

The ANC is still trying to overhaul Eskom after more than a decade of intermittent electricity cuts that have stifled the economy.

Below are key facts reported in November 2019 about Eskom, its financial problems and the planned reforms.

GENERATION SHORTFALL

Eskom, established in 1923 under white minority rule to serve the mining sector, is in the top 20 power utilities in the world by installed generation capacity.

But it has struggled to meet demand since 2007, with several bouts of severe power cuts.

The utility now has a total nominal capacity of around 44,000 megawatts (MW), with 36,500 MW of that coming from 15 coal-fired power stations.

Alongside its creaking coal fleet, Eskom operates Africa’s only nuclear power plant near Cape Town, as well as gas, hydropower and wind plants.

It generates more than 90% of South Africa’s power and 40% of the electricity on the continent.

Eskom is scrambling to complete two new mammoth coal plants, Medupi and Kusile, which have been beset by huge cost and time overruns.

DEBT, LOSSES AND BAILOUTS

Eskom is struggling to service R450 billion ($30.5 billion) of debt, which it ran up because of soaring expenditure on Medupi, Kusile, coal and salaries.

Executives also blame years of low tariff awards, which have not allowed the company to recover its costs and corruption scandals under previous management.

It made a 20 billion rand loss in the year to the end of March and expects to make a similar loss in the current financial year.

The government has promised to inject R59 billion into the utility in 2019/20 and 2020/21, in addition to R230 billion of bailouts spread over the next decade.

Analysts say even those bailouts aren’t enough to make Eskom sustainable in the long term.

An outline of the government’s Eskom plan unveiled in October gave no details of further debt relief, but finance ministry officials have said they are weighing options including swapping Eskom debt for government bonds and moving its debt into a special purpose vehicle.

THREE-WAY SPLIT

Ramaphosa pledged in a state of the nation speech to split Eskom into three entities for generation, transmission and distribution to make it more efficient.

The government says it will prioritiSe setting up a separate transmission unit within a state-owned Eskom holding company by the end of March 2020, while the legal separation of all three entities should be complete by the end of 2022.

The aim is to create greater transparency over performance, improve management focus and minimize corruption.

Some analysts are skeptical officials will follow through with their Eskom plans in full, given fierce opposition from labor unions and vested interests in the energy sector.

Eskom employs more than 46,000 people, which many analysts consider excessive.

Ramaphosa has promised Eskom won’t be privatiSed and that voluntary severance packages will be offered to staff instead of redundancies. Job cuts are a sensitive issue given unemployment is running at 29%, an 11-year high.

Additional reporting by Reuters.

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