Picture: Reuters/Siphiwe Sibeko
Picture: Reuters/Siphiwe Sibeko

Treasury backs Eskom 'emergency procurement' of diesel to mitigate load shedding

By Dineo Faku Time of article published Dec 6, 2018

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JOHANNESBURG – State-owned Eskom has received the Treasury's approval for the “emergency procurement” of diesel to power its expensive open-cycle gas turbines as load shedding threatens to plunge the economy into a further crisis.

Company spokesperson Khulu Phasiwe said yesterday that Eskom had approached the Treasury at the end of last month for the emergency contract as the company relies on Ankerlig and Gourikwa to mitigate the impact of load shedding.

“We are using the turbines to limit the extent of load shedding. Had it not been for the contract we would have had a deeper level of load shedding,” Phasiwe said.

A Treasury spokesperson confirmed the contract, saying: “The deviation was supported and communicated to Eskom on November 30.”

Eskom has spent R839million as at September and was expecting to pay an additional R700m by next March on diesel, it said last month. The company also said the Treasury had approved the urgent procurement of 4million tons of emergency coal to help address stock shortfalls at its coal-fired power stations.

Reports emerged on Tuesday that Eskom was in the process of asking the government to take R100bn worth of debt on to its own balance sheet to help turn the company around.

The DA said yesterday that the debt swop would be the single largest bailout of a state-owned entity in the history of South Africa.

The party said it would be writing to Eskom chairperson Jabu Mabuza to ask for complete transparency on this debt swop.

“We will be requesting that the Eskom board present this information to an urgent public enterprises parliamentary committee meeting. South Africans are literally in the dark given the current power outages across the country. We cannot be left in the dark around this debt deal,” the party said.

Ted Blom, a member of Energy Expert Coalition and partner at Mining & Energy Advisors, said Eskom’s generation capacity was expected to decrease further from 72 percent to below 50 percent at Mpumalanga coal stations - a situation which could intensify blackouts.

“The problematical supply of coal over the next five years could contribute to further outages, while Eskom states the uncertainty of future tariff increases could well extinguish the lights,” he said.

Eskom has been grappling to provide power and has implemented load shedding “as a measure of last resort to protect the power system from a fatal collapse”.

Phasiwe said the company’s power stations had less than 10 days' stockpiles available and the company had secured supply from 27 companies that would increase the output to 4million tons.


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