Tag: Eskom

Brace for Stage 8 loadshedding, says expert

Power and mining expert Ted Blom has warned South Africans that they should brace themselves for the worst year of loadshedding yet in 2021, with Stage 8 being a possibility before the end of winter.

In the latest episode of the Free Marketeers podcast, Blom provided his analysis of the utility’s situation and a prognosis for loadshedding in the next year.

The highlights of Blom’s predictions include:

  • Eskom is understating the amount of power it was actually shedding from the national grid
  • Eskom already interrupts 2 000MW of supply to its big customers when it announces load-shedding for the general public (so Stage 1 load-shedding or shedding 1 000MW is in fact a 3,000MW shortage)
  • Eskom is capable of handling about 11 000MW of shortages before having to implement load-shedding
  • The utility’s outlook for the next three months in its latest system status report showed a near-consistent unavailability of 20,000MW or more when taking both planned maintenance work and unplanned outages into account
  • The deficit over the next three months would hover around 9 000MW
  • Based on Eskom’s own forecasts, 2021 is going to be the worst year of load-shedding on record

What happens during Stage 8?

Stage 8 load-shedding is implemented when 8 000MW needs to be shed from the national grid in order to prevent a total collapse of the system.

During stage 8, consumers can expect much more frequent power cuts, to be without electricity for 48 hours over four days, or 50% of the time.

The worst level of load-shedding previously experienced in South Africa was Stage 6, which was implemented in December 2019 after a technical problem at Medupi Power Station.

At the time, Eskom needed to shed 6 000MW, which meant that around 40% of its capacity had been unavailable.

Response

Eskom’s response to the outlook was that “while it endeavours to only load shed at Stage 4 or below and only when truly necessary, higher stages of load shedding could be required”.

Source: Supermarket & Retailer

Johannesburg and Cape Town, which have a combined population of about 10 million people, plan to diversify away from the electricity produced mainly from coal by Eskom Holdings SOC Ltd to more sustainable sources such as solar and power generated from landfill gas.

“The City is looking at 300 megawatts of renewable” energy, Kadri Nassiep, Cape Town’s executive director for energy and climate change, said by email. “If all clarity is obtained and plans forge ahead, we could start seeing greater diversification of our energy resources as a city in about three to five years time.”

In addition to improving security of supply, the move will allow the cities to boost their fight against climate change by using power that doesn’t result in the emission of greenhouse gases. Still, it will slash revenue for Eskom, which is struggling to service a $30 billion debt bill.

“Internationally many cities are at the forefront of dealing with climate-change disasters and so have adopted proactive climate-change responses,” Lauren Hermanus, director of Adapt, a South African company that provides consultancy services on sustainable energy, said in an interview.

“We are also all aware of Eskom’s related operational, governance and fiscal challenges, most clear in our bouts of load shedding,” she said, using a local term for power outages.

Landfill gas

South Africa produces the same quantity of greenhouse gases as the UK, which has an economy eight times larger. Eskom, which runs a fleet of coal-fired power plants, is the country’s worst polluter, accounting for about 40% of the greenhouse-gas emissions.

Cape Town plans to build a photovoltaic solar power plant by the end of the 2023 financial year, as well as sourcing additional sustainable energy, Nassiep said. The city took the energy ministry to court this year to win the right to source its own power. The judge ruled that further negotiations with the government should take place.

“We intend putting out a tender for renewable-energy plants embedded in our grid in the next year and we would like to source renewable energy from large independent power producers as soon as is feasible,” he said.

Johannesburg, South Africa’s biggest city and financial hub, is considering sourcing power from solar plants and landfills, where gas from rotting garbage can be used to produce electricity.

The initiative is driven mainly by Eskom’s unreliability, the city’s commitment to reduce carbon emissions and the need to protect customers from rising power prices, said Isaac Mangena, a spokesman for Johannesburg’s City Power utility.

“City Power is still at early stages of the initiative and we expect the process to take at least 2 years,” he said.

Consumers lose again in Eskom-NERSA clash

Source: OUTA 

Eskom’s urgent application filed recently to recover one of the R23bn bailouts in 2021 is understandable but it is harsh news for struggling consumers and businesses.

There is no way to win in this situation.

It’s the latest move in the legal battles between the inept regulator, NERSA, and the utility struggling with unsustainable debt.

In July 2020, the high court ruled that NERSA was wrong to consider the R69bn government bailout to Eskom (R23bn a year for Eskom’s 2019/20, 2020/21 and 2021/22 financial years) as revenue instead of as an equity injection, and that this resulted in a significantly lower Eskom electricity price increase allowed for these years. The court ordered this to be added back to the electricity price.

We note that NERSA conceded and acknowledged that it erred in this regard in the court proceedings leading up to the judgment against it. We further note that the judge ordered the error be rectified through appropriate tariff increases during the 2021/22, 2022/23 and 2023/24 financial years.

NERSA was subsequently granted leave to appeal, not in respect of its self-acknowledged error, but to challenge the judge’s authority to prescribe the manner and timing of electricity price increases to rectify NERSA’s mistake. NERSA believes it should have the right to decide how much the prices should increase and over what period in refunding Eskom, taking into account the effect on customers and the economy. NERSA’s appeal – which is still pending – effectively suspended the court order.

Eskom’s interdict this week calls for R23bn – one year’s bailout – to be loaded onto the 2021 price (the allowable revenue), so that it does not lose another year of this. It will add about 10% to the price increase from April 2021, in addition to the 5.22% already granted. In terms of the court order, it will increase the price from the already approved 116.72c/kWh to 128.24c/kWh.

OUTA believes that NERSA has demonstrated a serious lack of competence and judgment in its misappropriation of R69bn as revenue instead of equity in making the Multi-Year Price Determination (MYPD) for the 2019/20, 2020/21 and 2021/22 financial years. While this has a negative impact of Eskom’s cash flow and sustainability, we also believe that the application of Eskom’s tariff increases following the court’s ruling in their favour will be a blow to an already over-burdened South African consumer and the economy as a whole.

The past decade of NERSA’s lack of leadership and political meddling has failed to hold Eskom’s past leadership to account for the utility’s soaring costs, borrowings and false asset revaluations. This is now playing out in very technical and costly court challenges that are having negative consequences on both Eskom and the public at large.

OUTA believes that NERSA may be wasting more time by opposing Eskom’s interdict to have one of the three R23bn bailouts loaded onto the 2021 price, as this may lead to more bailout requests from Eskom to prevent it defaulting on its loans.

Eskom effectively lost the R23bn a year for 2019/20 and 2020/21, due to NERSA’s ruling. OUTA believes this ship has sailed and that this situation provides NERSA and Eskom with an opportunity to reach a compromise on writing off at least part of the outstanding R46bn, in a way that takes into account the interests of Eskom, customers, taxpayers and the economy.

Eskom workers strike

By Lauren Isaacs for EWN

Eskom on Monday confirmed that some workers at its power stations would embark on a planned protest from Tuesday.

The demonstrators are temporary workers employed by contractors and Eskom Rotek Industries.

It is believed they are up in arms over the use of labour brokers.

Eskom’s spokesperson Sikonathi Mantshantsha said: “Eskom has put in measures to minimise the disruption to production and it bears noting that the matters that are being raised by the protestors are already before the CCMA,” he said.

On Tuesday night Eskom sent a notification on Twitter to say that the power grid was under pressure.

This comes as President Cyril Ramaphosa said that government was making progress in overcoming the problems Eskom has been facing for years now.

Ramaphosa has used his weekly newsletter to address the energy crisis gripping the country.

He said that improvements were continuing in municipal debt collection and despite load shedding, maintenance work was continuing at power stations.

He said that South Africa would be buying electricity through a transparent tendering process that prioritised competitiveness and cost-effectiveness.

Government has gazetted ministerial determinations that will enable the development of more than 11,800 megawatts of additional power generation.

Eskom caught lying about load-shedding

Source: MyBroadband

Eskom has admitted to exceeding stage 4 load-shedding limits, which energy advisor Ted Blom said shows the power utility is lying about which stage they have implemented.

This year, South Africa experienced the worst load-shedding it has ever seen, with 49 days of blackouts to date.

According to Eskom’s announcements, load-shedding peaked at stage 4, but Blom highlighted that the power utility exceeded stage 4 in September.

Official information shared by Eskom showed load-shedding of 5 359MW on Wednesday 2 September and 5 642MW on Thursday 3 September.

This far exceeds stage 4 load-shedding, which “allows for up to 4 000MW of the national load to be shed”.

Eskom spokesperson Sikonathi Mantshantsha denied accusations that Eskom is deliberately deceiving the public on which load-shedding stages it is implementing.

He confirmed the accuracy of the load-shedding statistics published on 2 and 3 September but said load curtailment should also be taken into consideration.

“Once Eskom declares Stage 4 load-shedding, it can request any major industrial customer to curtail up to 20% of load,” Mantshantsha said.

“This amounts to 1 200MW of demand that must be curtailed by industrial customers as part of the licenced load curtailment in terms.”

“Load-shedding is what Eskom sheds from the public, and that is what Eskom announced at Stage 4 on Thursday.”

However, when pushed on the amount of load-shedding which truly happened on Thursday, Mantshantsha said “Eskom did shed 4,400MW on the day in question”.

This equates to stage 5 load-shedding based on Eskom’s own definitions. Mantshantsha, however, would not answer the question on whether the power utility implemented stage 5 load-shedding.

It is not clear why Eskom refused to admit it implemented stage 5 load-shedding, as this could cause confusion among consumers.

Blom accused Eskom of being deceitful in its answers and trying to downplay the severity of load-shedding in South Africa.

Eskom’s load-shedding stage definitions
Eskom explains the different load-shedding stages on its website and in the documentation it provides to the public and municipalities.

Here are the current load-shedding definitions for Stage 1 to Stage 8:

Stage 1 allows for up to 1,000 MW of the national load to be shed.
Stage 2 allows for up to 2,000 MW of the national load to be shed.
Stage 3 allows for up to 3,000 MW of the national load to be shed.
Stage 4 allows for up to 4,000 MW of the national load to be shed.
Stage 5 allows for up to 5,000 MW of the national load to be shed.
Stage 6 allows for up to 6,000 MW of the national load to be shed.
Stage 7 allows for up to 7,000 MW of the national load to be shed.
Stage 8 allows for up to 8,000 MW of the national load to be shed.

According to these definitions, and after taking 1,200MW load curtailment into account, stage 5 load-shedding was implemented on 2 September and 3 September.

The table below provides an overview of the load-shedding implemented in the beginning of September.

Blom said there is a “massive difference between being forced to shed 4,000MW (13%) of total demand and 6,000MW (20%)”.

“If the power utility is short of 20% of the economy’s need it is a national disaster and requires an immediate intervention,” he said.

According to Blom, Eskom has lied to the public on load-shedding days this year and on the level of load-shedding.

He added that Eskom is also not telling the truth on how long the reconditioning program will take and the level of reconditioning done during lockdown level 5.

“In short, the public has branded Eskom as pathological liars with many examples over the last decade,” said Blom.

Blom said Eskom’s leadership should take extra precautions to ensure they are “100% factually correct and stop playing cat and mouse with the public”.

By Tom Head for The South African

The Matjhabeng Municipality in Free State has agreed to hand over 139 farms belonging to the administrative region, to act as a security on their R3.4-billion Eskom bill.

The serial defaulter has run up a tab of more than R3.4-billion in unpaid electricity bills over the years. Eskom put their foot down earlier in 2020, severely limiting the supply of energy for the municipality. However, it seems both parties have come to an agreement, and the total cost of the land is believed to be worth R2.5 billion.

This doesn’t clear all of the debt, but it marks a significant – if unusual – agreement between both parties. The deal was facilitated by the Free State High Court, and the title deeds will be signed over to Eskom while Matjhabeng remains in arrears. It is not yet clear what the power utility intends to do with these farms, should the debt stay in place.

The firm issued a statement on the matter earlier on Tuesday, confirming the details of their “land shedding” exchange. They state that all defaulting municipalities still owe them R31-billion, which remains a “threat to sustainability” for Eskom.

“In its ongoing efforts to recover more than R3.4 billion in unpaid debts owed by the Matjhabeng Municipality, the administrative body has agreed to hand over to Eskom 139 farms belong to the municipality, as a security on the debt. The farms are worth approximately R2.5 billion, and the title deeds will be endorsed in favour of Eskom.

“This will remain in place while the debt is unsettled. The order has been made by the High Court in Free State. This step on the part of Eskom is the result of repeated failures by Matjhabeng Municipality to adhere to its payment requirements. The total outstanding municipal debt [for all municipalities] of R31-billion threatens our sustainability.”

 

Loadshedding reappears, stages may worsen

Eskom announced Stage 2 load-shedding will continue on Wednesday from 8am to 10pm.

The power utility said the breakdown of multiple units resulted in the power system being constrained.

“With the unreliable and aged generation infrastructure, together with a number of risks on running units, there is a high possibility that additional stages of load-shedding may be implemented at short notice,” read a statement from Eskom.

A generator each broke down at Arnot, Medupi, Lethabo, Matla powerstations, while two units each at Majuba, Camden and Tutuka powerstations also broke down.
This, together with the need to conserve emergency generation reserves, necessitated that loadshedding be implemented in order to protect the integrity of the system.

Eskom is urging customers to reduce electricity usage to ease the strain on the system. The current loadshedding stage could be moved up at short notice.

Chaos reigns at Eskom virtual meeting

By Antony Sguazzin for Bloomberg

With South Africa’s biggest state utility in crisis, one of parliament’s most important financial oversight committees called an urgent online meeting with the company.

Eskom Holdings SOC Ltd. non-executive board members failed to log on, sending a text message to say they were tied up, and parliamentary staff forgot to invite Pravin Gordhan, the public enterprises minister, who oversees the utility.

The meeting was convened, to among other things, discuss two legal reports — one of which dealt with the conduct of Chief Operating Officer Jan Oberholzer, and the other with a multi-billion rand fuel oil supply contract. Oberholzer, Eskom Chief Executive Officer Andre de Ruyter and several other executives did attend.

“You had chaos from the board side, which made it a farce,” said Alf Lees, a member of the Standing Committee on Public Accounts for the main opposition Democratic Alliance. “You couldn’t address the issues, particularly the issue of the COO.”

The need for urgency is self evident. Eskom is mired in corruption allegations, has debt of about 450 billion rand ($26.8 billion) and is struggling to supply the country with sufficient power.

The committee adjourned and will try to meet again next week to discuss Eskom.

Source: MyBroadband

The Department of Environment, Forestry and Fisheries (DEFF) says it has revoked a section 30A directive granted to Karpowership SA Pty Ltd for activities linked to the emergency generation of electricity.

When the company had initially submitted its request, it had indicated that the country’s electricity supply was under threat because of the increased pressure on the healthcare system as a result of the COVID-19 outbreak.

The motivation for the request was to ensure an uninterrupted supply of energy to the healthcare sector, something which Eskom was unable to guarantee.

The department verbally approved the request on 26 June 2020. Following receipt of confirmation that all environmental requirements would be met, the directive was confirmed in writing on 6 July 2020.

“It has subsequently emerged that the company had applied for the verbal directive in advance, in preparation for the possible implementation of the government’s integrated resources plan and in the event that the company would be selected as an emergency power producer.

“However, this information was not disclosed to the department when the company motivated for the verbal directive to be issued for the Section 30A activities, which are, in essence, an emergency provision,” the Department of Environment, Forestry and Fisheries said in a statement.

“In light of the fact that it has now emerged that there was in fact no emergency situation, the department has withdrawn the verbal authorisation and subsequent written directive for the commencement of activities listed in terms of Section 30A of the National Environmental Management Act on 13 August 2020,” the department said.

The company has since accepted the notice and indicated that it does not intend to challenge the department’s decision to revoke the verbal directive.

 

Eskom begins Stage 2 loadshedding 

By Mia Lindeque for Eyewitness News

Eskom says its implementing stage two loadshedding at 8 am.

The utility says it’s battling with several breakdowns of generation units at its plants, which have taken 2 0000 megawatts off the grid.

The blackouts are expected to last until at least 10 pm.

However, Eskom is warned of a high possibility it may ramp up loadshedding to stage three for the evening peak period.

Eskom’s Sikonathi Mantshantsha said: “Eskom regrets informing the country that starting from 8 am this morning, we will have to implement loadshedding stage 2. This is due to the increase in breakdowns overnight and this morning. We will be implementing stage 2 loadshedding, as we have had additional breakdowns overnight.”

Tens of thousands of people on the west rand, the Vaal and Soweto had their power cut at 5am already.

Eskom says its implemented so-called “load reduction” in these areas to prevent network overloading.

Power was expected to be restored to these communities at 9 am, and it’s not yet clear how loadshedding will impact them after that.

 

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