South Africa Blackouts Seen Lasting All Week After Silo Collapse

Rolling power blackouts will probably continue across South Africa this week as Eskom Holdings SOC Ltd. struggles to recover capacity from its second-biggest plant after a coal silo cracked and collapsed, it said.

“It is very likely that load-shedding will continue for the week,” Steve Lennon, the utility’s group executive for sustainability, told reporters today in Johannesburg, using the local term for electricity cuts. Scheduled reductions are most probable over evening peaks and throughout Nov. 6, he said. “If we can avoid any of that then we will.”

The silo fell onto the conveyor at the 13 year-old Majuba power plant, cutting supply of the fuel to all of the facility’s six units, the company said. Eskom should be able to supply four of the boilers using mobile feeders, Group Generation Executive Thava Govender said. The utility is cutting as much as 2,000 megawatts of capacity through rotational blackouts. The scheduled outages started this morning and will run until 10 p.m.

Cash-strapped Eskom was earlier this year forced to implement managed blackouts in the continent’s second-largest economy for the first time since 2008 as it struggles to meet demand with an aging fleet. Large industrial users including steelmaker ArcelorMittal’s local unit and BHP Billiton Ltd., the world’s biggest mining company, are required to reduce demand to avoid a total collapse of the grid.

ArcelorMittal Agreement

“Eskom did not spring this up on us,” Kesebone Maema, a spokeswoman for ArcelorMittal, said by phone. “We have an agreement on how to help manage power when these things happen.” BHP Billiton has “a plan” on how to work with Eskom, Lulu Letlape, a spokeswoman for the company, said by phone.

The Majuba facility, in the eastern Mpumalanga province, has design capacity for 4,110 megawatts, making it South Africa’s biggest plant after the 4,116-megawatt Kendal facility, according to Eskom’s website. Majuba, which isn’t located near a coal mine, is operating at 600 megawatts, Chief Executive Officer Tshediso Matona, who was appointed on Aug. 20, said today.

Eskom has arranged trucks to bring supply to two of the three feeders at Majuba, running at 16 vehicles per hour per feeder, Govender said. Units 1 and 2 share a feeder as do units 5 and 6, he said. Unit 4 was out for maintenance and unit 3 will eventually be cross-fed using supplies to the other boilers, he said.

Unit Plan

The second and sixth are running at about half their strength using coal that was bunkered near them. The utility plans to get these to capacity, with the others, except unit 4, following and raising capability to 2,400 megawatts this week.

Eskom’s construction of two more coal-fired plants of about 4,800 megawatts each, to be Africa’s largest, has been beset by delays. One megawatt is enough to power about 200 middle-income South African homes at peak times, Eskom’s spokesman Andrew Etzinger said in March.

While the utility has installed capacity of 41,995 megawatts across its 27 power plants, which have an average age of 32 years, about 24 percent of that is unavailable because of both planned and unplanned maintenance.

“Eskom has zero reserve margin and hence any incident now threatens power supply,” Anton Eberhard, a National Planning Commission member and professor at the University of Cape Town’s Graduate School of Business, said by e-mail today. “It’s not easy to turn this situation around. This crisis points to the need to consider structural changes to the power market and greater opportunities for private players.”

South Africa will raise at least 20 billion rand ($1.8 billion) by selling shares in listed companies, stakes in state-owned entities and real estate to finance a bailout for Eskom, which has to plug a 225 billion-rand cashflow gap over the five years through March 2018, the National Treasury said last month.

Power tariffs will rise an average 13 percent from April, more than the 8 percent planned, to help the company recover 7.8 billion rand of unbudgeted costs incurred in the three years through March 2013, the national energy regulator said in October. The inflation rate was 5.9 percent in September.

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