File image: Eskom. IOL.
JOHANNESBURG - Eskom has said it had no plans to resort to load shedding this winter, despite its scramble for additional coal amid dwindling stockpiles at seven of its power stations.

The utility said that it would divert coal to the under-resourced stations from facilities that have sufficient supply.

Spokesperson Khulu Phasiwe said Eskom would not revert to load shedding, as this was expensive for both the power utility and the country.

Phasiwe admitted, however, that the Eskom power stations of Hendrina, Majuba, Arnot, Kriel and Camden were experiencing low coal volumes.

He said the volumes were below the 17 days required by the National Energy Regulator of South Africa (Nersa). Eskom’s benchmark was 20 days, said Phasiwe.

“At the moment, we are seeking additional coal for these power stations,” said Phasiwe. He said the power utility was awaiting National Treasury's approval for it to procure additional coal. “National Treasury has agreed in principle to the issuance of the contracts.”

Phasiwe attributed shortages to Tegeta Exploration and Resources. Tegeta-owned Optimum Coal Mine, which supplies coal to Eskom, is under business rescue.

He said the power utility - which has an electricity overcapacity of approximately 4000MW - had been using the expensive open cycle gas turbines (OCGTs). The increased OCGT usage could set Eskom on a collision course with Nersa, because the power utility is likely to seek to recoup the costs through the Regulatory Clearing Account (RCA). RCA is a monitoring and tracking mechanism that compares certain uncontrollable costs and revenues assumed in the Multi-Year Price Determination (MYPD) decision by Nersa to actual costs and revenues incurred by Eskom.

In terms of the MYPD methodology, Eskom could only recover efficient and prudent costs. The regulator has in the past been reluctant to punish consumers through higher tariffs for Eskom’s poor planning and inefficiency.

“We are using the OCGTs to meet demand and for fuel rotation purposes,” Phasiwe said. “We need to rotate the fuel, because it loses some of its properties if it just sits there for too long. We will have to justify the use of OCGTs to Nersa.”

Phasiwe said the power utility, however, could not claw back the costs associated with the search for additional coal supplies. “We will have to absorb that. The regulator will not allow us to recoup those costs. That is why we want to conclude additional contracts for these power stations. These contractors will be closer to the power stations,” he said.

Eskom currently wants to claw back R66billion for the 2014/15, 2015/16 and 2016/17 financial years. Nersa is currently holding public hearings around the country on the application.

- BUSINESS REPORT