Eskom keeping the lights on despite reduced coal off-take from suppliers

A worker operates near coal stores in the coal yard at the Grootvlei power station, operated by Eskom. File photo

A worker operates near coal stores in the coal yard at the Grootvlei power station, operated by Eskom. File photo

Published Jun 27, 2024


ESKOM is managing to keep the lights on even through the winter period despite reduced off-take of coal from suppliers such as Exxaro Resources, which said this week that it expects a 12% half-year decline in sales of the energy commodity to the power utility.

Exxaro was diverting some of its local coal sales for export, it said on Tuesday. It attributed the expected interim decline in coal sales to Eskom for the period to the end of June to “lower Eskom demand linked to their internal maintenance and production” plans.

However, Eskom has been keeping the lights on, avoiding lengthy load shedding, a development that has brought some respite to South African mining, manufacturing and industry companies.

“I suspect that Exxaro is referring to last year’s performance for both Eskom and Exxaro. They are not talking about what is happening in the current financial year where lights have been on,” said strategist Mteto Nyati.

Exxaro said its domestic thermal coal sales for the period to December were expected to decrease by a wider margin of 54% as it diverts domestic coal sales to the export markets, mainly from the Mpumalanga mines.

This, however, appeared not to affect Eskom’s power generation, with energy experts arguing that the rapid uptake of solar for both household and industrial consumption was lifting off part of the weight of Eskom’s reliance on coal.

However, other analysts said Eskom’s power generating units were now operating reliably, with limited disruptions and breakdowns, which might mean that the power utility already had stockpiles from prior period.

“Eskom's main issue was unreliability, seemingly they are avoiding unplanned, unforced errors, which is what actually causes load shedding, not planned maintenance. Eskom sales volumes should always be flat or declining because you should never supply more than the contract amount,” said business analyst Stephen Govender.

Eskom said last week that “load shedding continues to be suspended until further notice, due to the ongoing intense focus on maintaining the gains made in the reliability and stability of the generation coal fleet” during the winter months.

“Our generation performance continues to surpass the winter forecast for this year. The current unplanned outages remain at an average of 12 000MW,” said Eskom.

The power utility “continues to strategically utilise, as planned in its winter outlook, its peaking stations, including the open-cycle gas turbines, to meet the high electricity demand during the morning and evening” peaks.

Its diesel usage remains below its published winter forecast and year-to-date budget. The usage continues to be significantly lower compared to the same period last year, it added.

“The current planned maintenance of 6 222MW is offset from our maintenance plans for this winter by short-term maintenance that was required to ensure the continued plant reliability.”