Ideologues targeting Eskom have no leg to stand on

Eskom’s improved performance is a result of strong leadership from the top and hard work by its employees, writes Matshela Koko.

There should be no denying of the fact that Eskom performance has improved over the last 10 months. This performance improvement is easily visible, but not to ideologues in whose eyes a state-owned company is incapable of delivering basic services as effectively as Eskom does. The improved performance is a result of strong leadership from the top and hard work by Eskom employees.

The assertion that it is not Eskom’s performance but the economic slowdown that has kept the lights on for the past 10 months is disputed. The facts speak for themselves. The peak demand so far this year was 34 899 megawatts, 418MW higher than peak demand last year. To put this in context, 418MW is almost equivalent to one unit at the Kriel power station. Peak demand for electricity in South Africa is during winter and is driven predominantly by the cold weather conditions.

While there has been a 2 percent reduction in energy consumption year to date, the actual peak demand for this year so far was higher than last year’s and was easily supplied by available generation and without the use of the expensive diesel units (as compared with last year) or the implementation of load shedding.

Last year Eskom used five levers to meet demand, namely support by the independent power producers (IPPs), mandatory demand reduction, contracted demand reductions, diesel generation and the utilisation of Eskom’s generation fleet. This year, Eskom has not used mandatory demand reduction, and has managed to decrease diesel usage to a load factor of 0.4 percent from 25 percent last year.

Diesel expenditure

Last year Eskom was spending more than R1 billion a month on diesel costs, however, this has been dramatically reduced with diesel expenditure for last month being R19 million, down from the R854m last October. This illustrates that Eskom continues to be in control of the power system.

In the past seven months Eskom increased its energy availability factor (EAF) from 69 percent to 78 percent year to date. This has added new generation capacity of 2 599MW excluding Medupi and Kusile units. It has achieved the highest peak capacity in four years at 39 067MW, met the high-peak demand of 34 808MW and achieved the planned maintenance factor of 11 percent year to date. As if this is not enough, the EAF for last month is more than 80 percent and the unplanned maintenance is 9.3 percent, the lowest since 2010.

It is interesting to note though, that weeks 18 to 23 had higher peak demand than any period last year. To any impartial reader, this is the result of the efforts of Eskom’s employees, top leadership and strategic shift rather than purely the economic slowdown. The impact of the more than 46 000 Eskom employees plus its partners should not be underestimated. They have developed a greater sense of pride and dedication to delivering against the agreed stretch targets. Each of these dedicated men and women should be commended for their hard work.

IPP consultant Doug Kuni questions this performance. To him, an Eskom that is improving is not good for his IPP ventures. The premise of the IPP projects is partly on the basis that Eskom will underperform and hence IPPs will be essential in guaranteeing security of supply. This ex-Eskom engineer seemingly finds it hard to believe that Eskom is turning the corner. However, Eskom fully supports the IPP projects as envisaged by the Department of Energy.

After all, it is Kuni who said in December 2014 that “what all South Africans can do now about the current electricity situation is to buy candles and a generator”. “You are going to need it for the next five to 10 years,” he said.

Excess capacity

As a result of the improved fleet performance, Eskom has excess capacity of up to 14 000MW between 2am and 4pm in winter. On average 2 000MW of this excess capacity is being exported daily to our neighbouring states. Eskom continues to seek new customers across the border in order to export an additional minimum of 1 200MW. This will require strengthening of the transmission backbone in the Southern African Development Community. Efforts are being conducted with members of the community to undertake this.

Other expert arguments focus on whether Eskom is sacrificing maintenance to attain these results. This again is unfounded as planned maintenance sits at 11.2 percent against a 10 percent target. So not only is Eskom undertaking more maintenance but it is also performing outages more efficiently. There is a funded comprehensive maintenance strategy in place and the improved EAF is testament to the fact that this maintenance regime is working.

Some indicate that Eskom and the new executive team were lucky. Luck is about not load shedding for a day. Not load shedding for 10 months and improving performance across core indicators has nothing to do with luck, and any reputable expert would know that. It is interesting to note that some previous critical commentators, such as Chris Yelland, are starting to recognise that Eskom has put in the hard work. However, Yelland has previously questioned the credibility of the executive team and of the maintenance plan to the extent that he called Eskom short-sighted, arrogant and a danger to South Africa. The realisation of Eskom’s plan must surely lead to questioning of Yelland as an expert.

These ideologues, such as Kuni and Yelland, seem distressed that Eskom has improved performance, which negated their opportunity to use load shedding to support the “#EskomMustFall movement”.

* Matshela Koko is Eskom’s group executive for generation.

* The views expressed here do not necessarily reflect those of Independent Media.

BUSINESS REPORT