Eskom has run out of cash to purchase diesel that can be utilized to run its emergency technology fleet and generate energy, heightening the chance of South Africa being positioned beneath excessive and sustained rolling blackout ranges.
Eight months into its present monetary 12 months, which is able to finish on 31 March 2023, Eskom has already exceeded its diesel price range of R12-billion. Throughout this era, it had an preliminary diesel price range of R6.1-billion, which was later revised to R11.1-billion. By November, the facility utility had spent R12-billion on diesel.
The sustained rolling blackouts of latest weeks have compelled Eskom to burn extra diesel in its open-cycle fuel generators (OCGTs) to the extent that the facility utility has run out of cash to acquire extra diesel.
Diesel is used for powering the OCGTs at Ankerlig and Gourikwa, which have a mixed power technology capability of two,000MW, which is equal to 2 levels of rolling blackouts. The OCGTs are used to make up for a shortfall in technology capability when there are outages and breakdowns at Eskom’s coal-fired stations. If OCGTs run effectively, they allow Eskom to keep away from implementing greater levels of rolling blackouts.
However Eskom doesn’t have cash to purchase diesel and run the OCGTs to stop greater levels of rolling blackouts at a time when extra items at its coal-fired energy stations face breakdowns. The facility utility doesn’t plan to order extra diesel till 1 April 2023 except it receives emergency funding from the federal government.
It isn’t clear whether or not the federal government plans to throw Eskom a monetary lifeline. However Public Enterprises Minister Pravin Gordhan met with the facility utility’s board on Sunday evening 20 November in regards to the “critical issues in regards to the danger of upper ranges of rolling blackouts within the coming months.” Gordhan, as Eskom’s sole shareholder, is accountable for the facility utility’s operations, together with its monetary affairs.
“The division of public enterprises (DPE) is urgently working with Nationwide Treasury and Eskom for it to seek out the cash to purchase provides of diesel,” the Public Enterprises division stated in an announcement on Monday 21 November.
The division additionally stated it was additionally partaking with Eskom to search for financial savings inside the energy utility’s current funds for the continuing buy of diesel and upkeep.
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Eskom’s empty diesel tanks
The severity of Eskom’s diesel disaster emerged on Sunday when power analyst Chris Yelland revealed on Twitter an trade with the facility utility’s Sikonathi Mantshantsha. Within the trade, Mantshantsha confirmed that Eskom didn’t plan to acquire extra diesel till 1 April subsequent 12 months and that its tanks at Ankerlig and Gourikwa have been empty.
And there aren’t any ships carrying diesel for Eskom which are anticipated to dock at Mossel Bay and Cape City. Diesel for the OCGTs at Ankerlig and Gourikwa is not going to be replenished till 1 April 2023 “on the earliest” stated Mantshantsha, or “till somebody supplies Eskom with more cash for procurement of diesel”.
Eskom administration first sounded a warning final week in regards to the energy utility working out of cash for the acquisition of diesel. The warning on the time got here from Eskom’s chief operations officer Jan Oberholzer in the course of the energy utility’s state of the system briefing for the 2022/ 2023 summer time interval.
Oberholzer stated on the time: “If we proceed to burn diesel the way in which now we have for the previous seven months, the associated fee can be astronomical. However we would not have the money to spend. We might be capable of pay if the municipalities have been paying us.”
Debt owed to Eskom by errant municipalities has greater than doubled lately, going from R20-billion in 2019 to about R53-billion this 12 months. Eskom additionally doesn’t generate sufficient income from electrical energy gross sales to pay its debt of practically R400-billion.
Oberholzer stated Eskom’s “troublesome” monetary place was forcing it to implement greater levels of rolling blackouts as a result of it doesn’t “have the cash to burn diesel on the fee [it] has been doing so far”.
Because the begin of its monetary 12 months in April this 12 months, Eskom has carried out greater than 145 days of rolling blackouts. It would implement one other 120 days earlier than the top of March subsequent 12 months. DM/BM