Eskom CEO appoints board for planned division into 3 units

JOHANNESBURG - Eskom’s new chief executive Andre de Ruyter said on Friday he was in the process of appointing boards for the state power utility’s planned division into units for generation, transmission and distribution.

Eskom produces more than 90% of South Africa’s electricity, but its ailing fleet of coal-fired plants have struggled to keep up with demand, leading to periodic crippling power shortages.

De Ruyter warned that the probability of power cuts would increase over the medium term as Eskom gets on with badly-needed maintenance. He added that Eskom was seeking to refinance its debts, and so the interest charges on its balance sheet could increase.

“We will unfortunately have to expect some increase in loadshedding. We will have to give ourselves the space to fix what needs to be fixed,” he said.

“If we don’t implement this maintenance plan there is a very real risk that the deterioration in our systems will continue.”

He added that the company was seeking to refinance its debts — currently estimated at R450bn ($31.40 billion). The interest charges on its balance sheet could rise because of this, he said.

President Cyril Ramaphosa announced last year that Eskom would be split up in order to open up the power sector to more competition.

But on Sunday de Ruyter said such a plan should not be rushed, owing to the risks entailed, which included problems transferring assets against which creditors had loaned Eskom money. He said rushing the split could further destabilise South Africa’s power supply.

Eskom on Thursday announced load shedding from 9 am on Friday, due to system constraints and depleted emergency resources.

The power utility said that it had been using pumped storage schemes and open cycle gas turbines to maintain capacity during the day. It said it would replenish these overnight.

Eskom said Stage 2 load shedding would continue at 9 am on Friday as the system "remains tight".

"The system operator will continue to monitor the power grid closely, and we will give an update early tomorrow morning once we have reviewed the performance of the power system overnight."

Eskom said that there had been a reduction on unplanned outages at 8 pm on Thursday.

It again called on consumers to conserve electricity by, among others, switching off geysers during peak periods, reducing swimming pool cycles to three hours twice a day, turning off devices such as computers and printers, rather than using the stand-by mode.

"We apologise unreservedly to South Africans for the negative impact this may have on them. Customers are advised to check their load shedding schedules on the Eskom website or municipal websites depending on who supplies them," the power utility said.