Eskom Steps Up South African Power Cuts as More Plants Fail

(Bloomberg) --

Eskom Holdings SOC Ltd. expanded a schedule of rolling blackouts across South Africa after more of the state-owned utility's generating units failed, spotlighting the fragility of the power supply system.

The struggling state-owned company is cutting 4,000 megawatts from the grid from 2 p.m. local time, spokeswoman Dikatso Mothae said by phone. So-called stage-4 loadshedding, the highest degree that has been implemented thus far by the utility to prevent a collapse of the national grid, was last conducted in March this year.

Eskom, which supplies about 95% of the nation's power, had earlier announced plans to cut 2,000 megawatts from Friday morning through Saturday morning. Problems at its plants were compounded by heavy rains that soaked coal stockpiles, rendering about 13,000 megawatts of its generating capacity unavailable.

“Its likely to continue until 6 a.m. tomorrow,” Mothae said. “Our machines are not operating the way they should. Since morning there are more units that tripped in addition to the ones that were already out.”

South Africa has experienced intermittent power shortages since 2005 as a result of Eskom's failure to properly maintain its aging plants and timeously invest in new ones. The utility had amassed 454 billion rand ($31 billion) in debt, and is seen as the biggest threat to the nation's economy. Electricity shortages in the first quarter contributed to the country's biggest economic contraction in a decade.

Decisions taken by past management to truck coal to some plants instead of transporting it on conveyor belts has exacerbated power supply constraints because the fuel is exposed to rain, according to Ted Blom, an energy analyst who has consulted to the utility.

“Eskom has been doing patch jobs at the plants and because of too much pressure, they run the plans harder than they should,” he said. “There are no quality assurances on the coal being delivered by trucks. They shouldn't be buying coal from trucks.”

The government plans to split the utility into generation, distribution, and transmission units under a state holding company -- a move it says will make it easier for them to raise financing and improve efficiency. Andre de Ruyter is due to take over as the company's new chief executive officer on Jan. 15.

“The big missing link is strong leadership and with the new CEO there is a big chance to get back on track,” said Mike Rossouw, who has advised Eskom on how to address its construction challenges. “Eskom seriously neglected the generation side and I think the new guy has an understanding of what needs to be done to address the demand situation.”

To contact the reporter on this story: Felix Njini in Johannesburg at fnjini@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Mike Cohen, Liezel Hill

©2019 Bloomberg L.P.