Eskom warns of Medupi power delay
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ESKOM has warned that it will take another 24 months and an additional R13 billion for the Medupi power station to deliver electricity to the national grid at full capacity at a time when the economy is fragile.
This could put a damper on the expected economic recovery as the ongoing energy crisis could see Eskom continue failing to meet the country’s electricity demand, leading to muted industrial activity.
The SA Reserve Bank last month took a cautious stance and maintained its 4.2 percent gross domestic product outlook for 2021 as recent supply disruptions and protracted lockdown could result in downward risks to economic growth. The struggling power utility yesterday announced that its flagship Medupi in Limpopo has been finally completed, 14 years after the project commenced.
Eskom said Medupi’s last of six generation units – Unit 1 – had attained commercial operation status on Saturday and was thus handed over to the generation division.
This marked the completion of all building activities on the 4 764 megawatts project, which commenced in May 2007 with an operational life of 50 years.
However, Eskom’s group executive for capital division, Bheki Nxumalo, said the power utility still had to resolve a number of technical defects at the station.
“What remains for the Medupi project is the last part of implementing the agreed technical solutions related to the boiler design defects on the balance of plant,” Nxumalo said.
“Once these repairs are completed during the next 24 months, Medupi will reliably deliver power to the national grid at full capacity, helping increase energy security for the country.”
Eskom had previously discovered a number of technical design flaws at Medupi, including that the boiler internal volume and dimensions were too small for South Africa’s slow-burning coal.
Investec economist Lara Hodes said it would still be a long time until Medupi was fully operational.
“The delay in generation is definitely an impediment, especially at a time when the economy is fragile and businesses need to operate optimally to claw back profits potentially lost during the pandemic,” Hodes said.
Medupi – the fourth largest coalfired plant and the largest dry-cooled power station in the world – has been plagued by a number of technical defects.
Eskom spokesperson Sikonathi Mantshantsha said the capital cost of the Medupi project had increased from the initial budget of R80bn and was sitting at R122bn so far.
He said the power utility expected to spend in total under R135bn on completion of the balance of the plant due to many changes to the design specifications.
He said the final unit had been contributing to the grid since 2020 and had now been certified to have met all legal regulations and safety requirements.
“This means that the grid will be more reliable,” Manshantsha said.
“We have more certainty that it is more reliable and will produce power closer to the way it was meant to be.”
Professional associate at Nelson Mandela University’s Infrastructure Development and Engagement Unit, Bongani Mankewu, said Eskom was not meeting the demands at the huge cost to the overall economy and wellbeing of South Africans.
Mankewu said South Africa depended on Western engineering workshops for any industrial products, and Eskom was no different.
“We need homegrown ideas for our problems to show the world that we can be self-sufficient.”
BUSINESS REPORT ONLINE