This situation is expected to worsen before it improves by 2023. Eskom COO Jan Oberholzer. Chief Operating Officer Jan Oberholzer said the power system would remain constrained for the foreseeable future, until generation plant performance and coal stock levels improved. While progress has been achieved in laying the building blocks for a sustainable turnaround of Eskom, the company’s operational and financial performance continued to deteriorate in the six months to the end of September 2018. Eskom woes are considered to be the major obstacle holding back South Africa’s economic growth. IN QUOTES | Ageing fleets, maintenance and long-term load-shedding: Eskom COO speaks . The Power utility says this is due to the loss of further generation capacity which has left the system severely constrained. Responding to the South African Union of Students (S... Higher Education and Training Minister, Dr Blade Nzimande, says the department is not in a financial position to be able to support institutions to clear all the debt of fee-paying students. Our challenges are often not unique to Eskom, they are national challenges facing all South Africans such as economic growth, job creation and transformation. The rest of this note will focus on the challenges facing Eskom and its ongoing reform efforts to parse the potential implications for the sovereign. Thu 21 Feb, 2019 - 11:14 AM ET . The power utility’s primary energy costs increased by 12% to R46bn and employee-benefit expense grew by 12% to R16.9bn. Ngubane passed away on Saturday at his Ladysmith home in KwaZulu-Natal after he suffered from a stroke in 2020. He said they are working closely with law enforcement agencies to bring the perpetrators to book. "The new minimum emissions standards now in effect, meaning there is a lot of work still to be done to fully meet compliance levels. Often, they are also international challenges such as climate change where collectively our individual actions impact on each other. On a Saturday evening in March at an upscale gallery in Johannesburg’s CBD, the lights went out. Often, they are also international challenges such as climate change where collectively our individual actions impact on each other. South Africa was hit by power cuts on Wednesday after a number of Eskom generating units broke down, highlighting the challenge facing President Cyril Ramaphosa in rescuing the state power firm. South Africa was going to need massive new investment in generating capacity to meet growth in demand. Supply security … Continue reading The Eskom … Generate your own power 'to reduce Eskom's challenges' See these tips on how to reduce your electricity usage too . State-owned Eskom, which produces more than 90% of the country’s electricity, implemented some of most severe power cuts in several years this year and is reliant on government bailouts to survive JOHANNESBURG : South Africa’s struggling power utility Eskom said on Friday it was challenging in court the regulator’s latest tariff decision, a move it said was necessary to avert financial disaster. Eskom's historical performance 8 4. Also, owing to the nine-point plan, the availability and reliability of the synchronised units at Medupi are showing steady improvement. “Regrettably, we’re in load shedding today and of course, we don’t take this lightly. South Africa is already facing mounting fiscal challenges, with public debt seen reaching 100% of gross domestic product in three years according to Moody’s Investors Service, and the economy not generating enough tax to pay for it. With that in mind, the fact that reform-minded President Cyril Ramaphosa faces significant challenges in pushing for restructuring at SOEs poses a stark challenge to the plans for Eskom and their potential benefit to South Africa's power sector. As of 31 January 2021, Eskom was owed R35.2 billion by municipalities, which De Ruyter believes in unsustainable. The structure of the electricity industry in South Africa 3 3. South Africa’s Eskom Challenge Nchimunya Hamukoma | Posted : April 09, 2019 . Problems at Eskom have regional reverberations because it is the continent’s largest utility and trades power with seven countries. There is no doubt that the financial challenges faced by Eskom require ongoing close Quality and reliability of supply 12 ... South Africa’s state-owned electricity utility, Eskom, was an efficient and well- ... structural, operational, and financial challenges. This is … A substantial win for the ruling … The recent wage increases for workers in the bargaining forum have also put pressure on costs. As shown below, we have revised down our forecasts for South Africa’s total electricity generation from 2018 to reflect the structural and long-term nature of the challenges that Eskom faces. Eskom To Challenge Energy Regulator In Court Over Tariffs. South Africa . These include addressing poor governance controls; improving liquidity; ensuring a financially viable entity; completing phase 1 of the of the strategic review, and executing a nine-point generation recovery programme,” said Hadebe. Many of these issues are also not new to Eskom, its employees or stakeholders. In addition to this, the company is facing reduced generation performance, low coal stockpiles, and increases in municipal debt. Eskom, which contributes about three quarters of the total installed power generation capacity in the Southern African power pool, exports power to at least six countries in the region. Media are welcome to utilise all stories, pictures and other material on this site as well as from our Facebook and Twitter accounts, at no cost. Image: 123RF/choneschones Eskom announced on Sunday that it has extended load-shedding to Wednesday due to constrained generation capacity. “Notwithstanding the challenges, Eskom’s Board and executive management team have dedicated their efforts on five key priorities to create a platform for future growth. Responding to the South African Union of Students (SAUS) letter of demands, Nzimande acknowledged that there are many students whose families strug... South Africa now has 1 529 420 confirmed COVID-19 cases after 1 006 people were confirmed to have contracted the virus in the last 24 hours. Releasing its 2018/19 interim results at its Megawatt Park offices on Wednesday, the utility said it had secured R52 billion (73%) of funding requirements for 2018/19 and 22% of funding for 2019/20 also secured. Eskom pleads with South Africans to save electricity as load-shedding resumes on Thursday Enforced electricity cuts have been imposed, effective from 8am on Thursday to 6am on Friday News Eskom’s problems are financial, structural and operational: chairman. Eskom Chief Operating Officer Jan Oberholzer, said: “The unreliability of the ageing fleet, with an uncertainty of about 6 000MW of capacity at any given time, will remain until the reliability maintenance programme can address the historical maintenance backlog”. This is something we do as a last resort,” said Eskom Group Chief Executive, André de Ruyter. In recent … Net profit decreased 89% to R671 million from R6.3 billion last year. Eskom is by far the largest of South Africa’s many state-owned companies. The May 2019 elections will be a crucial determinant of the prospects and pace of reforms needed at SOEs such as Eskom. – SAnews.gov.za, Follow South African Government News on Facebook. Going forward, the power utility said it will address emissions as a key challenge. “Regrettably, we’re in load shedding today and of course, we don’t take this lightly. by Ph October 11, 2019, 2:03 pm. Eskom’s finances is a question of national importance, but the implications of problems related to the electricity supply industry in South Africa will have broader implication within the southern African region and beyond. More recently, we have heard a slew of reasons for Eskom’s inability to keep the lights on, ranging from ageing power plants to maintenance problems. Shifting to rain readiness preparedness, De Ruyter, told the media that the resilience of the power system during heavy rains and the cyclone storm Eloise is also a clear indication that this has paid off. Magashalala was found dead at her Honeydew home in Johannesburg on Friday. These challenges are complex and there are no easy fixes. “The addition of Medupi Unit 1 to the grid will bring the number of units in commercial operation at the power station to six, meaning this entire power station has now reached commercial operation and the construction project at Medupi has been completed.”. By Paul Burkhardt (Bloomberg) — Andre de Ruyter knew well the adversity he faced at South Africa’s power monopoly — a state-owned wreck hollowed out by corruption that struggles to keep the lights on, pay its bills and play ball with a unionized workforce. Higher Education and Training Minister, Dr Blade Nzimande, says the department and universities have reached another fee compact to ensure fee increases for the 2021 academic year are kept at affordable levels. “Eskom cannot solve the financial and operational sustainability challenges that it faces alone. Sport, Arts and Culture Minister Nathi Mthethwa is deeply saddened by the passing of Noxolo Maqashalala (44) and Menzi Ngubane (56). There was a time recently when Eskom had a better credit rating than government’s sovereign debt. Eskom has secured 73% of its funding requirements for 2018/19, while it faces several operational and financial challenges. … “There will be pressure in the short- to medium-term as we transition towards financial and operational sustainability, a move that will require resolute, tough and decisive leadership. Eskom CEO warns there will continue to be an electricity supply shortfall of about 4,000MW over the next five years due to capacity challenges. Eskom: Facing the challenges of reliable power supply The challenge of supplying South Africa with a regular supply of power seems to be highlighted on an almost daily basis in the press. problems related to the electricity supply industry in South Africa will have broader implication within the southern African region and beyond. Revenue went up 3% to R98.1 billion, while the entity recovered irregular expenditure of approximately R1 billion. Of course, as we take these units out on planned maintenance that reduces our energy availability factor and increases the risk of load shedding.”. According to the latest data, the new infections represent a 4% positivity rate. The Eskom revenue model should be straightforward: it sells electricity for a price regulated by NERSA[2], and this should be enough to cover the costs required to generate that electricity, together with a modest return. According to the power utility, despite the initial challenges posed by COVID-19 lockdown, high levels of maintenance have been sustained with planned maintenance gradually increasing to between 5 500MW and 7 000MW or about 12%. Higher Education and Training Minister, Dr Blade Nzimande, says the department and universities have reached another fee compact to ensure fee increases for the 2021 academic year are kept at affordable levels. Koeberg Nuclear Power Station continues to operate efficiently and within the required safety parameters and at the lowest primary energy cost of baseload stations. Medupi power station in Limpopo. South Africa needs reliable and … “Another sad reality of the matter, infrastructure and electricity theft doesn’t only cost Eskom money but also creates risks to innocent people who are exposed to dangerous vandalised installations.”. The compact is also aimed at ensuring the sustainability of universities. However, Eskom continues to be plagued by ongoing theft and vandalism of infrastructure, which continues to impact operations, increasing the risk of power supply interruptions. Charged with this huge and complicated issue is Eskom, the national utility, trying to balance challenging finances, an ageing infrastructure and increasing demand. Eskom represents South Africa in the Southern African Power Pool. Employee costs rose 12% to R16.9 billion, up from R15.1 billion in the same period last year. The scale of the economic challenges confronting South Africa is daunting by any standards. South Africa became a Republic in the 1960s. Eskom has secured 73% of its funding requirements for 2018/19, while it faces several operational and financial challenges. The total debt for Eskom climbed by 14% to R419bn in the past six months (until the end of September). The most recent financial and operational crises at Eskom have brought to the fore the serious economic risks associated with relying on an entity that is simply too big to fail. Monday, March 15, 2021. Ngubane passed away on Saturday at his Ladysmith home in KwaZulu-Natal after he suffered from a stroke in 2020. Historically, any profitability generated during the first half of the year is eroded during the second half, due to lower summer tariffs and higher planned maintenance. Although coal costs were contained to 7%, independent power producer costs surged 29%, mainly due to volumes being 25% higher. With reduced options for tackling them at a time of global economic uncertainty, it is by no means clear whether those problems can be turned around as quickly as possible, thus enabling all of the country’s citizens to realise their full socio-economic potential. Revenue rose marginally to R98.1 billion from R95.5 billion previously, largely driven by a 5.2% tariff increase that was implemented in April this year. © 2021 Government Communication and Information System, [Read] Trade, Industry and Competition Deputy Minister Nomalungelo Gina has reminded regulators with consumer protection mandate to continue with their efforts to put a spotlight on consumer rights https://tinyurl.com/pbx9bxs2, [Read] President Cyril Ramaphosa has paid tribute to the role played by traditional leaders in the development of their communities https://tinyurl.com/ker976fs, [Read] President Cyril Ramaphosa has signed Proclamation R21 of 2021 authorising the Special Investigating Unit (SIU) to investigate corruption, malpractice and maladministration in the North West Department of Public Works and Roads https://tinyurl.com/yped9azb, [Read] The South African Police Service (SAPS) has denied shooting and wounding a person during the ongoing student protests in Johannesburg on Monday https://tinyurl.com/y9uf4, [Read] South Africa has logged 613 new COVID-19 cases in the last 24 hours, the latest statistics have revealed https://tinyurl.com/wftjs9xv, [Read] While great strides have been made, Eskom believes there is more that still needs to be done as the power utility works tirelessly towards reducing the risk of load shedding https://tinyurl.com/mmr8u7yv. The key point is that without concerted efforts by the government to solve the Eskom problem, South Africa risks sacrificing its economic future for the sake of a single failing company. The root causes of the crisis 18 6. ESKOM is responsible for 95% of South Africa’s energy supply and around 45% of Africa’s total energy supply. The author is an alumnus of the 2018 Atlantic Dialogues Emerging Leaders program. Eskom is one of the biggest power utilities in the world, providing 90% of supply in South Africa, the most industrialised country in Africa. The utility said the international bond issue was oversubscribed, despite tough operating conditions and Fitch Ratings lifted the negative ratings watch. Kusile Unit 3 and Medupi Unit 1 are also on track to achieve commercial operation during the next few months. He said work is progressing well in Unit 1 is currently on a refuelling and maintenance outage, which is set to return to service in time for the higher demand expected during winter months. According to Business Day, the power utility’s service-cost debt doubled to R45bn in a year. More than a decade of mismanagement, governance failure, spiralling costs, and the accumulation of unmanageable debt has put Eskom into a death spiral. This case was the tipping point that revealed a host of improper contracts that have left the parastatal with a debt of over R420 … Eskom has secured 73% of its funding requirements for 2018/19, while it faces several operational and financial challenges. South Africa Electricity Generation Forecasts, Q418 vs Q219. The financial challenges stem from the condition … Eskom “poses significant contingent-liability risks to the government,” Lucie Villa, a senior vice-president at Moody’s, warned in a report Friday. That’s the … Responding to the South African Union of Students (S... Higher Education and Training Minister, Dr Blade Nzimande, says the department is not in a financial position to be able to support institutions to clear all the debt of fee-paying students. Eskom has secured 73% of its funding requirements for 2018/19, while it faces several operational and financial challenges. By Chris Yelland • 23 October 2019 . Eskom’s network, while now improving, is still sub-par and continues to be an impediment to economic growth. President Cyril Ramaphosa during the official opening of the 3rd Basic Education Lekgotla … He admitted that the power system remains vulnerable and volatile with the risk of load shedding significantly reduced after the completion of the reliability maintenance by September 2021. In addition to its technical challenges, Eskom also faces major financial ones. Meanwhile, copper theft costs the economy between R5 billion and R7 billion per year, while Eskom spends about R2 billion replacing lost cables, he said. We are about to find out what is the elasticity of demand for electricity against … An attendant came by soon after to assure that … De Ruyter also confirmed that the "build programme" is progressing well, with Kusile Unit 2 having successfully achieved commercial operation in October last year, adding 720MW to the national grid. South Africa Power Sector To Perform Below Capacity. “Regrettably, we’re in load shedding today and of course, we don’t take this lightly. 09 January 2020 - 14:47 By ERNEST MABUZA. No more. Also, coal stock levels continue to improve, with the average coal stock at 52 days by the end of February, excluding Medupi and Kusile.