Eskom's diesel bugdet appears as a potential setback for Ramokgopa's electricity resolution plan

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©GCIS/ The Daily Maverick


Eskom has not finalised a diesel budget to run OCGTs, which make up for a shortfall in generation capacity when there are outages and breakdowns at Eskom’s coal-fired stations. In an interview with Daily Maverick, Ramokgopa said preliminary estimates suggested that R30-billion would be available for Eskom to fund its diesel purchases during its current financial year. 


However, there is a limit on how much diesel Eskom can burn, as the power utility can't burn and use diesel worth more than R2.5-billion a month (about 100 million litres at current wholesale prices). Even with an unlimited budget, Eskom cannot burn more diesel than this due to the physical and logistical constraints in transporting it to the OCGT plants. In 2022, Eskom ran out of money to buy diesel and exceeded its initial budget of R6.1-billion by spending R21-billion.


Eventually, Minister of Public Enterprises Pravin Gordhan “found” 50 million litres of diesel at PetroSA for Eskom. Ramokgopa suggested that the government should consider buying directly from suppliers to make savings. In late December, the Department of Mineral Resources and Energy denied an application by Eskom for a wholesale licence for diesel. 


Eskom’s ability to borrow money from commercial banks to fund its operations has been severely restricted by the National Treasury over the next three years. Ramokgopa said Eskom hoped to generate an additional 2,800MW from at least three units at Kusile Power Station (Eskom’s newest coal-fired power plant), expected to enter commercial operation between December 2023 and February 2024.


Ramokgopa recently presented a short-term plan to his ANC colleagues to ease load shedding over the next six months, beginning in May and covering the winter season. The project includes ramping up the use of OCGTs and managing demand by installing household devices that can remotely switch off high-energy appliances such as geysers. 


Additionally, Eskom and the government want to limit blackouts to a maximum of Stage 5, significantly when OCGTs are ramped up. Breakdowns at Eskom power stations happen so often that it is becoming difficult to predict the energy situation. Winter has traditionally ushered in an average demand of about 35,000MW, peaking at 37,000MW. At current levels, Eskom cannot cater for this demand.


This article is originally published by the Daily Maverick

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