ESKOM - Lights might be on, but all is not well at Megawatt Park

ESKOM

Lights might be on, but all is not well at Megawatt Park

Kgosientsho Ramokgopa seems a good sort, and those who have met him say he’s an affable guy. However, his sunny disposition does risk allowing us to feel as if things are getting better at Eskom, when that is actually not clear at all. The minister remains hemmed in on all sides by the ANC’s internal ructions and presidential dithering, and the utility still faces severe challenges.

At the heart of this is load-shedding, which has been beaten back somewhat in recent weeks. On the surface this is excellent news. But a lack of load-shedding should not be mistaken for a return to health. Indeed, as counterintuitive as it may seem, it could even be the opposite.

In an editorial published in December, when former Eskom CEO Andr& xE9; de Ruyter announced that he would leave, and under the impression at that stage that his departure was imminent, this newspaper warned that "it may be a fool’s errand to make predictions, but it is likely that the severity of rolling blackouts will improve rapidly in the coming weeks. This will be used to illustrate that De Ruyter was an incompetent CEO."

We continued: "If what De Ruyter said recently about the scale of the sabotage is true — and it seems that, if anything, he was understating the severity of the issue — the assault the utility has had to withstand on its infrastructure, especially in Mpumalanga, will be called off by those who wanted to get rid of De Ruyter. By calling off the saboteurs and stopping planned maintenance you could, in the short term, eliminate ‘load-shedding’. But we must not fall for it. We must see it for what it is; a victory for corruption and criminality."

Looking back, it was certainly a cynical view, but it has to an extent been borne out by events. De Ruyter has gone and load-shedding is in retreat. It is reasonable to ask what has changed so quickly. Eskom’s issues are so clearly not fixable in just a few weeks, and the startling recovery in the energy availability factor (EAF) is reminiscent of the infamous "Koko effect" — when the utility was run at full throttle without regard to the long-term harm this was doing to the power stations during the Zuma administration.

If the utility is running its plants too hard we will all pay the price down the line and, as the kids like to say, winter is coming.

That noted, there are other issues too. Ramokgopa’s pronouncement last week that the unbundling of the entity into generation, transmission and distribution businesses is not a priority suggests a worrying level of politics-induced myopia.

In fact, the process is central to securing investment in the future of our electricity infrastructure.

Tens of thousands of megawatts of coal capacity are due for decommissioning in the coming few years, and the grid constraints represented by the geographic requirements of renewables infrastructure all need immediate attention. The unbundling has already missed the president’s deadline (the end of 2022), and in my view is as important as the immediate attention to EAF — if not as politically sensitive for elections in 2024.

As part of the minister’s media blitz he took reporters to Tutuka, a coal plant notorious for its poor performance and, as reported by this newspaper, seemingly under the thumb of crime syndicates. The criminals operated the sabotage-and-tender model of bleeding Eskom of cash at the cost (in the case of Tutuka) of two stages of load-shedding, or about 2GW. There, he announced that the plant’s GM, Sello Mametja — who famously is said to have worn a bulletproof vest on site — has been booted sideways.

Eskom gave Business Day a terse response citing "needs of the organisation" when asked why, but surely such a brave and committed colleague would have been more useful where he was? It’s all a bit odd, and Eskom’s response is reasonable cause for suspicion. Are Tutuka’s problems fixed, or merely brushed under the carpet?

At Kusile, Ramokgopa denied that corruption was responsible for the brand-new plant’s inability to run. The issues, he said, were technical and related to "design deficiencies". I’m sorry to be the turd in this punchbowl, but this cannot stand. It did not happen on the minister’s watch, but it was dodgy tenders worth R38bn linked to ANC investment company Chancellor House and Hitachi Power Africa that led to the "design deficiencies" at the heart of these brand-new power stations that mean they will never run at capacity.

And finally, the minister has not dealt with Koeberg. As we speak, Eskom is at the most critical and dangerous stage of replacing one of the steam generators, recently announcing that it had reached a milestone in the process. However, those in the know say the hard work is ahead. Plugging a brand-new, new-technology generator that operates at an improved thermal efficiency into an old plant is the hard bit. The plant will need to be modified to operate the new generator.

The generator replacement is running years late. The 20-year life extension of Koeberg — the application for which will also take time — is conditional on the successful and compliant replacement of the generator as measured by the International Atomic Energy Agency’s exacting standards. It is all doable, but planning for both of Koeberg’sunits to be back online this year would be fanciful.

So, as you enjoy the delights of a more reliable electricity supply, don’t deceive yourself that the problems that caused it are gone, despite the minister’s hard work and positive attitude. They are not — our energy future remains distinctly sketchy.

Parker is Business Day editor in chief.