Who will pay Eskom’s R10bn diesel bill?

Comment on this story
Copy of ST_eskom load shedding0 (40474413) INDEPENDENT NEWSPAPERS Eskom spent a whopping R10 billion on diesel last year to help keep the lights on. File photo: Dumisani Sibeko

 

Cape Town - Eskom spent a whopping R10 billion on diesel last year to help keep the lights on.

This was R8bn more than it had budgeted for, but the electricity reserves are so tight, Eskom had to run the country’s diesel-guzzling “peaker plants” for much longer than normal.

The peaker plants, called open cycle gas turbines, usually supplement electricity supply only in the early mornings and evenings when demand spikes. But Eskom spokesman Andrew Etzinger said on Sunday the peaker plants had been used extensively last year – on average for 17 percent of the time – to keep the lights on while the utility undertook “a substantial amount of maintenance on our generation fleet”.

And the bad news is that Eskom expects to run the peaker plants over budget again this year. Etzinger said how much Eskom spent on diesel this year would depend on electricity demand and plant performance. Diesel is the most expensive form of power generation.

Eskom does not know who will pay the R10bn bill – consumers or the Treasury. Etzinger said Eskom was in discussions with the National Energy Regulator of SA (Nersa) and with the government on “how to treat the additional expenditure”.

The total generation capacity of these peaker plants is 2 000 megawatt – greater than Koeberg, which is 1 800MW.

Harald Winkler, head of UCT’s Energy Research Centre, said given the slim energy reserves, Eskom had little choice but to run the peaker plants. Eskom had told the government in 1998 that supply would outstrip demand.

“Eskom alerted the government and the Department of Minerals and Energy at the time that we needed to build more generating capacity. Their internal modelling showed that the supply was not going to keep up. They knew there would be a crunch in 2007, but government did not act on that because of complex political reasons. Eskom was told not to build,” Winkler said.

According to one energy policy analyst – who did not want to be named – where Eskom was to blame was for insisting on being projectmanagers of the Medupi construction. Medupi was due to come online in 2012 but is way behind schedule.

“The first big mistake was government’s, not taking a decision to build in the 1990s. The second big mistake, the Medupi delay, is absolutely in Eskom’s lap. It’s way behind because they chose to project managing Medupi themselves,” the analyst said.

Mike Levington, a board member of the South African Renewable Energy Council, says the money being poured into diesel to run the peaker plants is because of the upcoming elections.

“This is a huge cost but the government is heading for elections and doesn’t want the lights to go out and so said to Eskom ‘do what it takes’,” Levington said.

He said the government still did not recognise the need to build far more generating capacity.

“If you don’t have electricity growth, you won’t have economic growth,” Levington said.

Etzinger said had Medupi’s first unit been online by now, the electricity constraints would have been reduced to a small extent, but the peaker plants’ usage would still have been extensive.

Cape Times



sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.