Collapse of Old King Coal Part 2: How Unrealistic Targets Created an Energy Crisis

 

 

  • This is Part 2 of amaBhungane’s series on the collapse of the Eskom coal fleet: a story about how we got it wrong, how we ignored what was happening at coal power stations, clung to unrealistic projections, and walked into an energy crisis of our own making.  
  • Read part 1 – The Collapse of Old King Coal here 

It is said that history repeats itself – first as tragedy, second as farce.

On Friday, Public Enterprises Minister Pravin Gordhan announced the new board of Eskom, and issued it with a clear instruction: get the availability of Eskom’s power plants back up to 75%.

The energy availability factor (EAF) is the percent of time a power plant is available to produce electricity. Both breakdowns and maintenance have reduced the current EAF to 58%, resulting in a record-breaking streak of load shedding in September.

Gordhan’s 75% target is not new – it is the number contained in the government’s shareholder compact with Eskom and the number that unpins our current outdated energy plan.

“If you look at it today, the actual performance is below 60%. Below 60% is just not good enough,” Gordhan said on Friday. “And so the board has to ask the question: the journey from 60% to beyond 75%, what does that involve? What extraordinary things need to be done?”

But the 75% target is part of the reason that we have an energy crisis today.

The source of the current crisis is the steady decline of Eskom’s once mighty coal fleet. Forced to keep running without proper maintenance, the coal-fired stations are now, on average, only available to produce electricity 55% of the time. 

In 2018, Eskom told the government that it could get the EAF back up to 75% by 2023.

“I think privately many engineers in Eskom were shaking their heads at this,” Eskom’s new chief executive, André de Ruyter, told us in July: “This was the answer that government wanted, and therefore that was the answer that government got.”

Even as the coal fleet collapsed and Eskom sounded the alarm that the lofty targets may not be met, the government clung to the belief that Eskom could restore its power plants to 75% availability. 

The result is that the country now has a 6GW shortfall – a scenario that was not just predictable, but predicted by people inside and outside Eskom.

But instead of learning from past mistakes, the government seems determined to repeat them. 

Asked, on Friday, if the 75% EAF target was still realistic or whether it was being pursued for political reasons, Gordhan said: “This is not about any political instruction, this is about what the country needs. And if the country needs [75%] … and if experts tell me and others that it is possible to get there, then every effort must be made in an honest endeavour to reach as close to 75% … as is possible.”

Crystal ball

Back in October 2016, Eskom’s energy planning office had been asked to make its annual prediction about where the EAF would go over the next five years.

The Medium-Term System Adequacy Outlook is supposed to act as an early warning system, identifying any risks to electricity supply that could emerge in the next five years, so that adequate plans can be made.

The 2016 report delivered three scenarios: two were based on aspirational targets set by Eskom and the government, and predicted the EAF would rebound to 80% and 78% respectively. Only one – the least optimistic at 71% by 2021 – was based on Eskom’s own statistical modelling.

But when the next system outlook report was published in October 2017, it only contained one scenario: it confidently predicted the generation fleet would “[recover]to 80% as early as 2020”. 

A memo to Eskom’s board indicates that the optimistic 80% EAF projection had come from Eskom’s generation division, under the leadership of Matshela Koko, and was “based on Eskom Shareholder compact [with the government]and Eskom Corporate Plan target”, and not on Eskom’s own modelling.

This was a risk: these system outlook reports are supposed to offer a sober assessment, so that plans can be made to cater for the worst-case scenario.

Eskom was now only catering for one possibility: restoring the Eskom fleet to its former glory and an EAF of 80%.

Eskom culture

Koko, who resigned from Eskom in February 2018, still believes that this target was realistic.

“We were going to achieve it, our trend was going there,” he said when we spoke to him recently.

Asked whether it was reckless for Eskom to plan for the future based only on aspirational projections, he said: “What is a projection? Your projection is your target. That’s the Eskom management culture … This is what we aspire [to]… and it becomes our target, and you plan for it and you achieve it.”

But Eskom has not achieved it. Instead of an 80% EAF by 2020, as the 2017 system outlook had predicted, the Eskom fleet achieved an EAF of 65% in 2020, leaving a gaping role in the country’s electricity supply

Author: Susan Comrie

This is a small extract from a very in depth and well researched article written by investigative journalist, Susan Comrie from amaBhungane Centre for Investigative Journalism. This is Part 2 – The Collapse of Old King Coal. Part 3 will follow. Read part 1 here.

Read more on this exclusive story from the amaBhungane Centre for Investigative Journalism HERE

 

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