Eskom has implemented Stage 2 load shedding on Thursday evening, from 9pm to 6am. Picture: Ayanda Ndamane/African News Agency (ANA)
Eskom has implemented Stage 2 load shedding on Thursday evening, from 9pm to 6am. Picture: Ayanda Ndamane/African News Agency (ANA)

Eskom CEO has a power strategy but load shedding continues

By Paul Burkhardt Time of article published Jan 30, 2020

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JOHANNESBURG - As the newly installed head of South Africa’s stricken state power company drafts plans to fix its operations, the utility offered yet another reminder of its inability to provide a stable supply of electricity.

Eskom Holdings SOC Ltd., which generates about 95% of the nation’s power, warned on Thursday there’s been a delay to bringing some plants back online and it may have to resume controlled blackouts. The utility has already had one round of scheduled outages this month and its generation fleet is showing no signs of stabilizing.

Since taking up the post on January 6, Chief Executive Officer Andre de Ruyter has given a rough outline of what’s being considered to fix the utility, including a disciplined maintenance schedule. 

On Friday, he will present a “State of the System” briefing that may shed more light on how he’s going to turn things around.

“His focus will be on wanting to reassure stakeholders that his tentative plan will get support,” said Darias Jonker, a London-based director at Eurasia Group Ltd. “He wants to show that he’s in charge.”

Solutions to South Africa’s power crisis have already been widely discussed. President Cyril Ramaphosa dispatched various task teams, multiple ministers and revived a so-called war room to solve Eskom’s operational, financial and other issues. Labor unions have proposed the company use pension funds to help cut its more than 450 billion rand ($31 billion) debt.

In addition, the Department of Mineral Resources & Energy published a request for information from companies that can help provide power to the grid. The deadline for those submissions is Friday and, after being reviewed by the department, requests for proposals on generation are expected to follow.

Outages cut gross domestic product by as much as $8 billion last year and the company is seen as the biggest threat to South Africa’s economy.

Eskom has been using generators originally intended to operate during peak-demand periods to offset the delay to bringing some units back online, it said on Thursday. Power cuts may be required to replenish costly diesel supplies and the water used by pumped-storage plants.

BLOOMBERG 

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