Page 11 - Energize Issue 1 2023

INDUSTRY NEWS

packages (VSPs). There were no forced
retrenchments.
The Generation Division continued to
show poor performance, with frequent plant
breakdowns subjecting the country to varying
and higher stages of loadshedding.
The Transmission Division continued to
deliver resilient and improving performance
while the Distribution network performed at
acceptable levels despite the negative effects of
infrastructure and cable theft.
The build programme progressed well, with
the 794 MW Medupi Power Station’s Unit 1
achieving commercial operation on 31 July 2021.

The full presentation can be viewed here:
2022_integrated_report.pdf (eskom.co.za)

NERSA’s decision regarding 2023-25 electricity tariffs

n Thursday 12 January 2023, the Energy Regulator of regulator said, to provide the country with additional power during
South Africa (NERSA) announced its decision regarding the morning and evening peaks, and for emergencies.
Othe increase Eskom can apply electricity tariffs in South It was mentioned that Eskom was too quick to resort to its
Africa for the next two years. OCGTs when faced with failing traditional generators. Eskom
Based on the information at its disposal and the analysis of apparently claimed that it had resorted to using its OCGTs when
Eskom’s fifth Multi-Year Price Determination (MYPD5) revenue generation failed to meet demand due to factors “outside of
application for the 2023/24 and 2024/5 financial years, the management’s control”. The regulator expressed concern saying
Energy Regulator, at its meeting held on 12 January 2023, that nothing should be outside of management’s control, and
decided to allow Eskom to increase its tariffs by 18,65% on certainly not as frequently as it seemed to be.
1 April 2023, and by 12,74% on 1 April 2024. Eskom had requested permission to increase the use of its
Customers who buy electricity directly from Eskom will OCGTs from 6% load factor to 12%. The regulator said that while it
pay the higher tariff from 1 April and those whose electricity is could not prevent Eskom from increasing the usage of its OCGTs,
supplied by municipal distributors will pay more from 1 July. it was unwilling to compensate the power utility for the usage
Although the regulator is still to publish an official statement beyond 6% load factor.
outlining the reasons for its decision, it was clear from comments
made during the two-hour long discussion the regulatory Power station performance
committee held that a number of issues needed to be addressed The ever-decreasing EAF is worrying, the regulator said. Load
by Eskom. shedding will not decrease unless the EAF improves and increasing
the tariff won’t improve the EAF, the regulator added. The power
The discussion centred around three main concerns: utility must focus on improving the EAF to levels above 65%.
• The excessive use of diesel-powered open cycle gas turbines
(OCGTs) Maintenance and coal quality
• The declining performance of Eskom’s coal-fired power plants The regulator was critical of Eskom’s increase in the amount of
as expressed as the energy availability factor (EAF) coal that was burned while electricity generation was decreasing.
• Coal supply and maintenance issues The issue of poor-quality coal resulting from criminal acts must be
addressed by management, the regulator said, and not be passed
OCGT usage on to the consumer through tariff increases.
Eskom was criticised for what the regulator said was excessive Regarding maintenance, the regulator said that Eskom must
use of its OCGTs. They supported their argument that the OCGTs do everything necessary to improve the EAF of its coal-fired power
were being over-used by the fact that Eskom spent twice the stations to decrease the need for load shedding. The regulator said
budgeted amount on diesel in 2022, requiring the utility to seek that it was unfair to expect consumers to pay for equipment “No
financial aid to buy more diesel in November (roughly three- new plant will be available this year – [Eskom] must fix what they
quarters through its financial year). The OCGTs were installed, the have”, the regulator said.

energize | Issue 1 2023 | 11