No limit to the greed that permeates that whole ecosystem at Eskom – Pravin Gordhan

  • South Africa’s Public Enterprises Minister, Pravin Gordhan, briefed Parliament’s pending watchdog, the Standing Committee on Public Accounts (SCOPA) yesterday on the widespread corruption at the country’s state owned and state run power utility, Eskom.
  • He said that there seems to be no limit to the greed that permeates that whole ecosystem at Eskom.
  • Pravin Gordhan was appointed Minister of Public Enterprises by President Cyril Ramaphosa in February 2018.
  • Eskom has the Government of the Republic of South Africa as its sole shareholder, with the shareholder representative being the Minister of Public Enterprises.
  • Eskom’s performance has got progressively worse under Gordhan’s tenure as public enterprise minister.

South Africa’s state owned and state-run energy utility, Eskom, is in dire straits. They recently released their Group annual results for the year ended 31 March 2023. Generation performance has continued to deteriorate, while networks and new build delivered variable performance. Plant availability deteriorated to 56.03% (2022: 62.02%), with unplanned load losses rising to 31.92% (2022: 25.35%) and planned maintenance at 10.39% (2022: 10.23%).

Loadshedding had to be implemented on 280 days during the past year due to generation supply constraints and shortfall from IPP programmes. 9.9TWh (5%▼) decline in sales volumes across every sector due to Eskom and IPP generation supply constraints, leading to loadshedding and load curtailment.

Gas turbines produced 4 116GWh (2022: 2 725GWh) at a cost of R29.7 billion (2022: R14.7 billion) for Eskom and IPP OCGTs. Gordhan said that PetroSA (a state owned entity) should not be making a margin on the sale of diesel to Eskom. “That margin is still there … in essence, Eskom is subsidising PetroSA,” said Gordhan.

The minister repeated that a permanently appointed CEO for Eskom would be in place by year-end. Eskom has been without a CEO since since Andre De Ruyter left in February making revealing widespread fraud and corruption at the utility which involved senior ANC members. De Ruyter said fixing and turning Eskom around was not feasible. Read more 

Arrear municipal debt escalated to R58.5 billion (2022: R44.8 billion) and net loss after tax worsened to a record R23.9 billion (2022: R11.9 billion).

Eskom’s generating plant availability reached the lowest levels ever, due to unprecedented levels of unplanned unavailability. A factor that contributed to the supply constraints is the fact that IPP capacity – both renewable and other programmes, such as DMRE’s Risk Mitigation IPP Procurement Programme – has not come online as expected under the IRP 2019, with an energy shortfall of more than 5 100GWh for the year, requiring increased levels of loadshedding and “overproduction” by Eskom and IPP-owned OCGTs of around 2 000GWh for the year.

Additional dispatchable capacity of 4 000MW–6 000MW is required immediately, to support the stability of the power system, create space for maintenance and reduce the need for loadshedding. South Africa’s renewable energy procurement programme REIPPPP BW 7, aimed at procuring 5000MW of new generation capacity, has been further delayed. Read more

Author: Bryan Groenendaal

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