Eskom, the South African monopoly energy utility, is on track to overshoot its emergency diesel budget for the 2023/2024 financial year, which ends on 31 March 2024. The power utility has only about R3.6-billion left of its diesel budget for the year, which ends on 31 March 2024. Considering Eskom has blown, on average, R3-billion a month on diesel this year, it seems Eskom is on track to deplete its diesel coffers before the year ends.
To stave off higher stages of rolling blackouts between 1 April and 28 November, the power utility spent R24.3-billion of its total diesel budget on its emergency diesel-powered generation fleet. In May, it was reported Eskom had blown R12.4 billion on diesel in just four months. With R24.3-billion blown as of 28 November, its diesel expenditure has more than doubled for the same period this year.
In the past few years, Eskom has been forced to rely increasingly on its open-cycle gas turbines (OCGTs) because of a rising number of breakdowns within its ageing coal-fired power fleet. This year is no different, and it seems Eskom is well on track for another year of overspending on diesel to run its OCGTs.
Electricity Minister Kgosientsho Ramokgopa has repeatedly defended spending billions on diesel to keep the lights on. It has been the worst year for power cuts by Eskom. On Thursday, South Africa was 334 days into a year with 322 days of load shedding. Load shedding in October was less intense than it had been for a long time, but November was particularly dim, with the return of crippling Stage 6 power cuts.
December is usually dicey for the electricity outlook because the hot summer conditions make Eskom's ageing power plants and their parts more susceptible to overheating and breakdowns. The grid has required power cuts at stages 4, 5, and 6 this week. From 1 to 28 November, Eskom blew R4.1-billion on diesel to keep the lights on. Energy analyst Chris Yelland said that in November, Eskom hit record figures for diesel usage, which was very high in April and May but even higher now.
Monique le Roux at Stellenbosch University’s Centre for Renewable and Sustainable Energy Studies told Daily Maverick that the limited remaining diesel budget put South Africa in a concerning situation regarding load shedding levels. She said that Eskom depends on diesel to keep load shedding in check and that they burn more diesel yearly to keep the lights on.
Eskom said it “cannot borrow more money as per the conditions of the National Treasury’s Equity Support. However, overruns on the budget for Eskom and IPP OCGTs will be funded from other budgets if required.”
At his weekly press conference on Sunday, Ramokgopa maintained that bringing back Kusile units 2 and 5 would impact available capacity. He projected electricity demand for the festive season to be lower, saying that the energy-intensive primary industry is closing, so you will have an order that will dip.” However, energy analyst Lungile Mashele said that despite a dip in demand, South Africa should expect load shedding throughout the festive season.
Eskom is ramping up its summer maintenance, with its latest system status report showing that it plans to take out as much as 8,977MW on planned maintenance on Christmas Day. The OCGTs have become a vital lifeline in the face of the loss of generation capacity at Eskom’s coal-fired power stations. At a political level, this is what the ruling ANC wanted to avoid. The blackouts which kneecap South African businesses and livelihoods will be a crucial voting point in next year’s polls.
