Eskom Managing Maintenance to Avoid South African Blackouts

  • South Africa outages unlikely until April 2016, Eskom CEO says
  • Ingula plant to come online next year, Kusile unit in 2017

Eskom anticipates it won’t have to resort to rolling power cuts, known locally as load shedding, until April next year, even as the electricity grid remains constrained, Molefe said. While demand is set to exceed existing supply after that, new generating units due to come online should help to reduce the shortfall, he said.

Eskom, which supplies about 95 percent of electricity in Africa’s most-industrialized economy, is struggling to meet demand after decades of underinvestment and delays in completing new plants. There have been about 100 days of managed outages this year.

The 1,332-megawatt Ingula pump storage plant will be fully synchronized with the national grid by August next year, according to Eskom. The first 800-megawatt unit at the Kusile coal-fired plant is due to come online in August 2017 and the second unit of the Medupi coal power station a month later.

Unplanned Works

While the utility has potential capacity of 44,262 megawatts, about 4,608 megawatts is out of service for scheduled maintenance and faults have shut down a further 6,757 megawatts, Eskom said. Peak demand is currently about 30,563 megawatts.

Eskom isn’t concerned that it doesn’t have the ability to borrow sufficiently in the markets after exceeding capital-raising targets for this year, the acting CEO said.

"Our borrowing requirement for this year is 55 billion rand ($4.03 billion) and as of yesterday we have signed commitments for 72.4 billion rand," Molefe said.

Eskom must raise a total of 110 billion rand to ensure that maintenance of its power stations continues and for other operational requirements and is seeking some of this money through price increases.

‘Programs Continue’

Eskom won approval last October to increase tariffs by an average 13 percent starting in April. The regulator in June denied it permission to raise fees by as as much 25.

"We will find the money to continue with our programs even without tariff increases," Molefe said.

Moody’s Investor Service downgraded Eskom debt to Ba1 in November, a day after cutting its rating on South Africa’s sovereign debt. The rating cut, to one level below investment grade, potentially increased the cost of borrowing funds for the utility.

"The downgrade has not added too much to our cost of borrowing at about 60 basis points above sovereign," Molefe said.

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