Page 22 - Energize Issue 1 2023

VIEWS AND OPINION

However, frequent changes in Eskom’s executive management are unsettling, and their arrear debt, or to meet repayment
visionary, forward-looking board and executive appointments are needed to enable arrangements on this debt. Municipal
Eskom to navigate the existential threats it faces, and to transform to become a utility arrear debt to Eskom currently stands at
of the future. above R50-billion.
Most municipalities and municipal
Generation plant performance electricity distributors also fail to
Eskom’s poor operational performance is indicated by the declining energy availability provide free basic electricity to
factor (EAF) of the utility’s fleet of coal-fired and nuclear-powered base-supply the significant majority of indigent
generators, which in the final weeks of 2022 dropped significantly below 50%. households in their areas of supply,
Load shedding in South Africa is worsened by inadequate generation capacity and instead misappropriate about 70%
reserves to provide the necessary headroom for the required deep-level maintenance of the funds budgeted and disbursed
of the poorly performing coal-fired fleet of generators. by National Treasury for this specific
To meet demand over the past few years, Eskom has increasingly relied on the use purpose.
of its emergency, diesel-powered, open-cycle gas turbines (OCGTs) to meet demand, A backward-looking approach to
thereby consistently exceeding its diesel budget. electricity distribution by the municipal
In November 2022, the utility had spent about R12-billion on diesel, double the electricity distribution sector and NERSA
year’s initial budget. And in the absence of further financial support from government, has inhibited the implementation of
Eskom was forced to cut back on diesel usage, and implement more intense load feed-in tariffs for embedded generation
shedding. and battery energy storage in South
The failure of Eskom to meet the legally required minimum emission standards Africa.
(MES) of South Africa at virtually all of Eskom’s coal-fired power stations, with no plans Similarly, the electricity distribution
in place to meet these standards in the foreseeable future, poses further massive risks sector appears unable or unwilling to
to security of supply in South Africa. formulate and implement a national
In 2022, the DFFE ordered the shutdown of a number of Eskom coal-fired power municipal wheeling tariff framework
stations as a result of noncompliance with the MES for over a decade. The loss of some and associated wheeling tariffs in South
16 GW of power generation capacity now hinges on the outcome of an appeal lodged Africa.
by Eskom.
Payment for electricity
Municipal electricity distribution Where there are high levels of
In many areas of the country, the dysfunctional and unsustainable financial and overloading due to illegal connections,
operational state of many municipalities and municipal electricity distributors in South electricity theft and non-payment of
Africa presents as much of a challenge as load shedding by Eskom. electricity, Eskom has been targeting
A significant number of municipalities and municipal electricity distributors are areas supplied directly by the utility
unable to meet payments for their current electricity purchases from Eskom, to service with cut-offs during peak periods, a
practice euphemistically known as “load
reduction”.
The biggest challenge in these areas
is in Soweto, where the level of non-
payment is around 80%, and where a
culture of non-payment and resistance
to the installation of prepayment
meters has existed for decades. Failures
in addressing electricity theft and
non-payment in Soweto has resulted
in Eskom regularly having to write
off billions of rands of arrear debt by
residents.
In recent weeks, Eskom has
been targeting municipal electricity
distributors having high levels of arrear
debt with additional rotating cut-offs,
over-and-above that required by the
Figure 2: Eskom total week-on-week energy availability factor (EAF), from Week 1, 2016 to Week 51,
2022. (Data source: Eskom; Graph: EE Business Intelligence) normal load shedding schedules. The

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