Energy regulator responds to Mail & Guardian article on Eskom diesel spend

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  • The National Energy Regulator of South Africa (NERSA) would like to correct the factually incorrect information contained in an article titled ‘Eskom spends more than half of its quarterly budget on diesel’ published by Mail & Guardian on Friday, 10 May 2024. Read full article here

The article incorrectly stated that ‘NERSA has called out Eskom for blowing more than half of its quarterly budget for diesel for the first quarter of the 2024-25 financial year in just one month’. This statement is both factually and substantively incorrect. NERSA has never ‘called out Eskom’ or raised concerns on the said allegation.

Herewith are the facts: On 02 May 2024, NERSA responded to the enquiry received from Mail & Guardian which was based on the following three questions:

  1. How much diesel did NERSA approve Eskom to use for the whole year?
  2. Does NERSA know if Eskom has exceeded the amount of diesel it used within the first quarter?
  3. How much diesel is Eskom expected to use to run OCGTs’ in each quarter?

NERSA transmitted the following written responses to the Mail & Guardian:

Response to question 1: In terms of the MYPD5 decisions, Eskom was allowed to utilise OCGTs at a load factor of 6%, based on certain assumptions on the performance of the coal fleet and contribution by contracted IPPs. This translates to 1 266 GWh for the whole year, which requires 405 120 Million litres of Diesel to produce.

Response to question 2: In terms of the MYPD5 decisions, Eskom is expected to report on a quarterly basis, the actual amounts of diesel used. NERSA makes an annual allocation for OCGTs, 1266GWh was allowed for the FY2024/25, which amounts to 316.5GWh per quarter. According to the latest report, In the month of April, which is the first month of the 1st quarter (April-June) of the 2024/25FY, Eskom has generated 168.5GWh from diesel generators.

Response question 3: NERSA makes annual allocation for OCGTs generation as indicated in response to question 2 above. However, OCGTs are provided for use as a last resort to prevent excessive load shedding up to the maximum allowed volumes of 1266GWh per annum for FY24/25. Please note that NERSA has effective oversight of the allocated load factor.

The article incorrectly stated further that ‘NERSA says Eskom has averted load-shedding largely because the power utility has been burning more diesel-which is only supposed to be used as an emergency because of its costlines-than usual’. This statement is also incorrect as NERSA has never made such a comment.

The article also incorrectly stated that ‘NERSA’s comments are contrary to Minister Ramokgopa, who told a media briefing that Eskom had been using diesel for generation’. This deliberate assertion is both factually and substantively incorrect as NERSA has not made any comments regarding Eskom’s use of diesel for generations. NERSA only responded to the three questions as indicated above.

It is quite clear that the Mail & Guardian deliberately used NERSA responses to the three questions to write and publish an incorrect and misleading article to achieve their nefarious objectives and an unwarranted destabilisation of the ESI decorum. In addition to responding to the three questions, NERSA further attached the Reasons for Decision Document (RfD), which detailed the decision of the Energy Regulator regarding Eskom’s OCGTs application for the 2023/24 and 2024/25 Financial Years, with the conditions that apply to the decision.

NERSA distances itself and condemns in the strongest possible terms the incorrect and misleading article published by the Mail & Guardian. NERSA remains committed to its regulatory principle of being transparent in its decision-making process and assures all stakeholders and the public that its decisions are made in accordance with all applicable laws and endeavour to strike a fair balance between the interests of customers, end-users, licensees and investors in the electricity supply industry.

Source: NERSA


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