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VIEWS AND OPINION

How South Africa’s troubled power utility is being reset

An interview between Professor Anton Eberhard and André de Ruyter

Eskom, South Africa’s state-owned power utility, is facing a litany of challenges. The Conversation Africa
asked Professor Anton Eberhard, director of the Power Futures Lab at the University of Cape Town’s Graduate

School of Business, to pose questions to the power utility’s CEO.

Anton Eberhard: The performance and
availability of Eskom’s power stations has
declined from above 90% in the early 2000s
to an average of 64% in the 2021 financial
year. Is this long-term, historical trend
inevitable as Eskom’s kit ages? Obviously,
Eskom should do all it can to improve
operations, but what is a realistic expectation
of future performance? Will we see energy
availability factors above 75% again, or will
average power plant availability now remain
in the 60s%?

André de Ruyter: Eskom’s fleet of coal
fired power stations, excluding Medupi and
Kusile, are on average 41 years old. These
power stations have been run far harder Anton Eberhard André de Ruyter
than international norms and have not been
maintained as they should have been. In
addition, the new generation plants, Medupi and Kendal 1. In the medium term, we should therefore expect some recovery in the energy
and Kusile, have design defects that will take availability factor as our planned maintenance returns to a more typical level. We are working
time and money to address. We therefore hard to get the energy availability factor above 70%, but given the age of the fleet, it would
have a generation system that is challenging be unrealistic to expect a sustained performance above 75%. This is the reason why we have
to operate. welcomed policy interventions to increase the available generation capacity for the country, as
As one would therefore expect, the ultimately, we need more power to enable South Africa to grow.
long-term trend in energy availability factor
has been downward. In January 2020, when Anton Eberhard: Declining power station performance is one reason for load-shedding and
I had just started, we took the decision power cuts which South Africa experienced in 2007 and 2008, and again in 2014 and 2015, and
to embark on a campaign to ramp up our every year since 2018. But you have pointed out that South Africa is also short of power. These
maintenance in order to increase the energy shortages will increase as old power stations reach their end of life. You said recently that 22 GW
availability factor. At the time, we made it will need to be decommissioned by 2035. The Integrated Resource Plan 2019 indicated around
clear that catching up on the maintenance 33 GW of new power generating capacity has to be added by 2030. That will require well over a
backlog would mean an increased risk of trillion rand in new investment. In a number of speeches, you have made the point that because
load-shedding, as we took units down for of Eskom’s high levels of debt, and a fiscally constrained state, most of this investment will need to
outages typically lasting up to 100 days each. come from the private sector. It’s unprecedented for an Eskom CEO to speak in this way, effectively
The energy availability factor therefore has encouraging private competition, but I guess you are alerting us to the urgency and the magnitude
been even more depressed than one would of the challenge if we are to keep the lights on. Can you elaborate on what needs to be done to
expect by extrapolating the long-term trend, restore electricity supply security?
because planned maintenance is deducted
from the energy availability factor. André de Ruyter: Eskom has publicly stated that the country currently has a generation capacity
We have recently seen some major deficit of 4000 MW. And that is at the current levels of economic activity and available generation
units returning to service after long outages capacity. This gap will obviously increase should economic activity rise without commensurate
at Duvha and Tutuka, which have played a investments in generation capacity, which result in increased load-shedding. This need not be the
significant role in alleviating the pressure case. South Africa should never have been forced to choose between protecting Eskom and having
caused by the incidents at Medupi 4 electricity.

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