Fin24

Eskom battles with supply, maintenance

2012-01-30 13:02

Johannesburg - Eskom is struggling to maintain a balance between a steady power supply and a growing need to maintain old power stations, the parastatal said on Monday.

"Most power stations are in mid-life and require increased maintenance; however maintenance has been continually shifted in order to ensure we meet demands," Eskom chief executive Brian Dames said.

"The strategy of shifting maintenance outages can no longer be sustained."

Dames was speaking at Eskom's first quarterly update for the year. He said the updates were part of an initiative to be "fully transparent" and proactive in communicating the state of the country's power system.

"It is like a drought, and everyone is trying to find a way to save water," Dames said.

"There is a similar situation in South Africa. Here, electricity is the oxygen of the economy... the oxygen of the media. We all need a stable power system."

He said Eskom was using cycle gas turbines and other methods to maintain the balance between supply and demand during maintenance.

"We do not want to go back to load-shedding, but we cannot do this alone. We need to save 10% of our current energy demand and remove 3000 megawatts from our demand to ensure that the power system can operate in a stable mode."

Dames said Eskom had different methods of achieving its goal, such as introducing a voluntary energy conservation scheme to 250 of its top customers, and the 49M initiative, which aims to encourage South Africa's 49 million people to save electricity.

 

Comments
  • KyleAssassin - 2012-01-30 13:16

    Because you didn't plan!

      Michele - 2012-01-30 13:57

      No they subscribe to the 3p principle, piss poor planning leads to piss poor performance.

      Michele - 2012-01-30 13:57

      No they subscribe to the 3p principle, piss poor planning leads to piss poor performance.

      Ian - 2012-01-30 14:07

      This is what happens when you use all the money to buy luxury cars, pay for huge parties, go on holiday with 2 jets and give important jobs to unqualified idiots. How do you expect an organization that has spent the last 50 years learning how to bring a country to it's knees with bombs and terrorism, to suddenly be constructive and build?

      Ian - 2012-01-30 14:07

      This is what happens when you use all the money to buy luxury cars, pay for huge parties, go on holiday with 2 jets and give important jobs to unqualified idiots. How do you expect an organization that has spent the last 50 years learning how to bring a country to it's knees with bombs and terrorism, to suddenly be constructive and build?

      Ian - 2012-01-30 14:07

      This is what happens when you use all the money to buy luxury cars, pay for huge parties, go on holiday with 2 jets and give important jobs to unqualified idiots. How do you expect an organization that has spent the last 50 years learning how to bring a country to it's knees with bombs and terrorism, to suddenly be constructive and build?

      uwe.klopfer - 2012-01-30 14:15

      because the ANC ignored the plans set before it. Then Eksdom shrugged it off and made it the governments problem. EPIC fail...AGAIN

      uwe.klopfer - 2012-01-30 14:15

      because the ANC ignored the plans set before it. Then Eksdom shrugged it off and made it the governments problem. EPIC fail...AGAIN

      uwe.klopfer - 2012-01-30 14:15

      because the ANC ignored the plans set before it. Then Eksdom shrugged it off and made it the governments problem. EPIC fail...AGAIN

      Davin - 2012-01-30 17:07

      Do you think they really care? With their massive performance bonuses they could probably build a few power stations each year. You all voted for this so be happy with what you have :)

      Davin - 2012-01-30 17:07

      Do you think they really care? With their massive performance bonuses they could probably build a few power stations each year. You all voted for this so be happy with what you have :)

      Davin - 2012-01-30 17:07

      Do you think they really care? With their massive performance bonuses they could probably build a few power stations each year. You all voted for this so be happy with what you have :)

      Inky - 2012-01-30 21:06

      they did plan.....for AA not electricty supply.

      Inky - 2012-01-30 21:06

      they did plan.....for AA not electricty supply.

      Inky - 2012-01-30 21:06

      they did plan.....for AA not electricty supply.

      Boer - 2012-01-31 00:48

      I wonder why ???????

      Boer - 2012-01-31 00:48

      I wonder why ???????

      Boer - 2012-01-31 00:48

      I wonder why ???????

  • proafrikaans - 2012-01-30 13:18

    If you purchase a more expensive, business-class plane ticket, you get treated better and stand in the front of the queue to board and when you get off. Eksdom has 3 kinds of customers: Ordinary, residential consumers, who are its milch cows, and who are hit with 25% annual increases and pay exorbitant amounts for our electricity. Then Eksdom has neigboring countries and industrial consumers, such as aluminium smelters. The latter two types of customers pay significantly less, in fact a fraction, of what the poor residential consumer pays. So I, as a business-class Eksdom passenger, as it were, am not at all interested in Eksdom's problems. I suggest that those who pay much less than me, i.e. neigbouring countries and aluminium smelters, be the first in line when power has to be switched off. The economy-class Eksdom customers can also do all the saving, thank you very much, as I am a much more profitable Eksdom customer than they are.

      rmoolman - 2012-01-30 13:42

      You are looking at it very simplistically. If you go to a supermarket to buy one can of beans, you pay (say) R10. When you go to a wholesaler to buy 10,000 cans of beans, you pay (say) R2 per can of beans. The economics are simple. Large customers (such as the smelters), buy electricity in bulk. You, as the consumer, buys in small quantities. It follows naturally that you will pay more than the large industrial customers.

      rmoolman - 2012-01-30 13:42

      You are looking at it very simplistically. If you go to a supermarket to buy one can of beans, you pay (say) R10. When you go to a wholesaler to buy 10,000 cans of beans, you pay (say) R2 per can of beans. The economics are simple. Large customers (such as the smelters), buy electricity in bulk. You, as the consumer, buys in small quantities. It follows naturally that you will pay more than the large industrial customers.

      rmoolman - 2012-01-30 13:42

      You are looking at it very simplistically. If you go to a supermarket to buy one can of beans, you pay (say) R10. When you go to a wholesaler to buy 10,000 cans of beans, you pay (say) R2 per can of beans. The economics are simple. Large customers (such as the smelters), buy electricity in bulk. You, as the consumer, buys in small quantities. It follows naturally that you will pay more than the large industrial customers.

      goyougoodthing - 2012-01-30 13:51

      @Moolman - There are some flaws in your argument: 1. Bulk discounts work when there is oversupply of a product, however when you can charge more for a premium product why bulk discount, that is economic stupidity. 2. The smelters managed to get Eskom to sign a multi-year contract with huge financial implications should they reneg, whoever signed these off should have their Swiss bank accounts checked. 3. Supplying power to OTHER countries at a discount, which is made up for by SA citizens makes even less sense as capital is basically drained out the country via the grid. 4. Supplying free electricity to large segments of the population makes no sense either, unless there is over supply, which we know there is not. 5. Maintenance and Capex are all part of the natural cycle of business. There are 200 other countries in the world where electricity flows without issues as this thought process is attended to.

      goyougoodthing - 2012-01-30 13:51

      @Moolman - There are some flaws in your argument: 1. Bulk discounts work when there is oversupply of a product, however when you can charge more for a premium product why bulk discount, that is economic stupidity. 2. The smelters managed to get Eskom to sign a multi-year contract with huge financial implications should they reneg, whoever signed these off should have their Swiss bank accounts checked. 3. Supplying power to OTHER countries at a discount, which is made up for by SA citizens makes even less sense as capital is basically drained out the country via the grid. 4. Supplying free electricity to large segments of the population makes no sense either, unless there is over supply, which we know there is not. 5. Maintenance and Capex are all part of the natural cycle of business. There are 200 other countries in the world where electricity flows without issues as this thought process is attended to.

      goyougoodthing - 2012-01-30 13:51

      @Moolman - There are some flaws in your argument: 1. Bulk discounts work when there is oversupply of a product, however when you can charge more for a premium product why bulk discount, that is economic stupidity. 2. The smelters managed to get Eskom to sign a multi-year contract with huge financial implications should they reneg, whoever signed these off should have their Swiss bank accounts checked. 3. Supplying power to OTHER countries at a discount, which is made up for by SA citizens makes even less sense as capital is basically drained out the country via the grid. 4. Supplying free electricity to large segments of the population makes no sense either, unless there is over supply, which we know there is not. 5. Maintenance and Capex are all part of the natural cycle of business. There are 200 other countries in the world where electricity flows without issues as this thought process is attended to.

      ludlowdj - 2012-01-30 14:07

      Not forgetting that in terms of the competitions act it is illegal to supply neighboring states with electricity at a lower rate than available for local residence. Also Eskom is a service provider who must either supply the demand, shut its door or allow another player to enter the market. The truth is overseas power providers would kill eskom if they ever got a licence to operate here, being able to generate more electricity at a much cheaper rate with the added bonus of a reliable power supply.

      ludlowdj - 2012-01-30 14:07

      Not forgetting that in terms of the competitions act it is illegal to supply neighboring states with electricity at a lower rate than available for local residence. Also Eskom is a service provider who must either supply the demand, shut its door or allow another player to enter the market. The truth is overseas power providers would kill eskom if they ever got a licence to operate here, being able to generate more electricity at a much cheaper rate with the added bonus of a reliable power supply.

      ludlowdj - 2012-01-30 14:07

      Not forgetting that in terms of the competitions act it is illegal to supply neighboring states with electricity at a lower rate than available for local residence. Also Eskom is a service provider who must either supply the demand, shut its door or allow another player to enter the market. The truth is overseas power providers would kill eskom if they ever got a licence to operate here, being able to generate more electricity at a much cheaper rate with the added bonus of a reliable power supply.

      Trevor - 2012-01-30 14:08

      Agree but one HUGE problem, those bulk buyers who pay less ALSO have contracts that if Eskom stops supplying, they sue...Alu smelters cannot stop so Eskom will kill supply to the WHOLE residential sector to keep them going, why do you think we had and will have soon, blackouts.

      Trevor - 2012-01-30 14:08

      Agree but one HUGE problem, those bulk buyers who pay less ALSO have contracts that if Eskom stops supplying, they sue...Alu smelters cannot stop so Eskom will kill supply to the WHOLE residential sector to keep them going, why do you think we had and will have soon, blackouts.

      Trevor - 2012-01-30 14:08

      Agree but one HUGE problem, those bulk buyers who pay less ALSO have contracts that if Eskom stops supplying, they sue...Alu smelters cannot stop so Eskom will kill supply to the WHOLE residential sector to keep them going, why do you think we had and will have soon, blackouts.

      uwe.klopfer - 2012-01-30 14:19

      @moolman... and why is the residential segment of their customers not seen as one whole big (say) 30% ? instead of each of them as (say) 0.00000001 % per household. It is the household people that make the economy tick, that get things done in the smelters or the mines. It is these mines and smelters that have massive profits (partly due to having only have to peanuts for their electricity) and pay their executives millions of rands in bonuses. Maybe pay less bonuses,pay more for power so that the normal person on the street can actually make a decent living for a change.

      uwe.klopfer - 2012-01-30 14:19

      @moolman... and why is the residential segment of their customers not seen as one whole big (say) 30% ? instead of each of them as (say) 0.00000001 % per household. It is the household people that make the economy tick, that get things done in the smelters or the mines. It is these mines and smelters that have massive profits (partly due to having only have to peanuts for their electricity) and pay their executives millions of rands in bonuses. Maybe pay less bonuses,pay more for power so that the normal person on the street can actually make a decent living for a change.

      uwe.klopfer - 2012-01-30 14:19

      @moolman... and why is the residential segment of their customers not seen as one whole big (say) 30% ? instead of each of them as (say) 0.00000001 % per household. It is the household people that make the economy tick, that get things done in the smelters or the mines. It is these mines and smelters that have massive profits (partly due to having only have to peanuts for their electricity) and pay their executives millions of rands in bonuses. Maybe pay less bonuses,pay more for power so that the normal person on the street can actually make a decent living for a change.

      Peter - 2012-01-30 14:44

      I believe that it is unlawful, in terms of The International Trade Agreement, to supply any commodity cheaper to other countries than within your own country.But I forgot-IT'S PAYBACK TIME........

      Peter - 2012-01-30 14:44

      I believe that it is unlawful, in terms of The International Trade Agreement, to supply any commodity cheaper to other countries than within your own country.But I forgot-IT'S PAYBACK TIME........

      Peter - 2012-01-30 14:44

      I believe that it is unlawful, in terms of The International Trade Agreement, to supply any commodity cheaper to other countries than within your own country.But I forgot-IT'S PAYBACK TIME........

      Riaan Moolman - 2012-01-31 00:56

      Firstly, the Aluminium smelters are a national asset. They ensure that SA is largely self-sufficient in Aluminium - one of the most widely used metals. Shut the smelters, and you will have to import all your Aluminium. The smelters also export Aluminium, and this is where it now gets interesting: the smelters are in fact a way to assist South Africa to beneficiate coal, rather than just dig it up and ship it out. (I don't expect many readers to understand this concept, I will explain in detail if the request is there) The supply contracts to the smelters have embedded derivatives linking the price they pay to the LME price for Aluminium. Although it is not impossible that, under severe economic conditions, ESKOM sells at a loss, what is never mentioned is the fat profits ESKOM makes when the LME price for Aluminium is high. The contracts are structured such that, over a period of time, ESKOM will never lose money. The smelters have the higher priority in SA, yes. Simple - they cannot be shut and hae to run continuously. Look at bhpbillitons latest fin results and annual report. Their Aluminium sector is the worst performer in the group. Analyzing the figures it is not difficult to calculate that the south African smelters are either running at a loss, or barely breaking even. To insinuate they make 'fat profits' is irresponsible and wrong. The bulk purchase vs single purchase example I have remains valid, irrespective of where one sit on the supply/demand curve. If anyone disagrees, maybe you should write a book on economics as you are postulating something totally new. Lastly, another reason that electricity supplied tithe smelters are cheaper is because they take in electricity at 132kV, from substations a very short distance from the main ESKOM transmission network. There is therefore very little conversion (and hence losses) from the time the "electricity leaves he power station" to the "time it reaches the smelter". Domestic users take in at 380V or 220V, through numerous substations, lengthy cables, numerous transformers, etc, and due to the number of times electricity has to be converted, losses are much greater and there is much more electrical infrastructure required to get electricity to homes (which need to be paid for, and maintained), than the smelters.

      Riaan Moolman - 2012-01-31 00:56

      Firstly, the Aluminium smelters are a national asset. They ensure that SA is largely self-sufficient in Aluminium - one of the most widely used metals. Shut the smelters, and you will have to import all your Aluminium. The smelters also export Aluminium, and this is where it now gets interesting: the smelters are in fact a way to assist South Africa to beneficiate coal, rather than just dig it up and ship it out. (I don't expect many readers to understand this concept, I will explain in detail if the request is there) The supply contracts to the smelters have embedded derivatives linking the price they pay to the LME price for Aluminium. Although it is not impossible that, under severe economic conditions, ESKOM sells at a loss, what is never mentioned is the fat profits ESKOM makes when the LME price for Aluminium is high. The contracts are structured such that, over a period of time, ESKOM will never lose money. The smelters have the higher priority in SA, yes. Simple - they cannot be shut and hae to run continuously. Look at bhpbillitons latest fin results and annual report. Their Aluminium sector is the worst performer in the group. Analyzing the figures it is not difficult to calculate that the south African smelters are either running at a loss, or barely breaking even. To insinuate they make 'fat profits' is irresponsible and wrong. The bulk purchase vs single purchase example I have remains valid, irrespective of where one sit on the supply/demand curve. If anyone disagrees, maybe you should write a book on economics as you are postulating something totally new. Lastly, another reason that electricity supplied tithe smelters are cheaper is because they take in electricity at 132kV, from substations a very short distance from the main ESKOM transmission network. There is therefore very little conversion (and hence losses) from the time the "electricity leaves he power station" to the "time it reaches the smelter". Domestic users take in at 380V or 220V, through numerous substations, lengthy cables, numerous transformers, etc, and due to the number of times electricity has to be converted, losses are much greater and there is much more electrical infrastructure required to get electricity to homes (which need to be paid for, and maintained), than the smelters.

      Riaan Moolman - 2012-01-31 00:56

      Firstly, the Aluminium smelters are a national asset. They ensure that SA is largely self-sufficient in Aluminium - one of the most widely used metals. Shut the smelters, and you will have to import all your Aluminium. The smelters also export Aluminium, and this is where it now gets interesting: the smelters are in fact a way to assist South Africa to beneficiate coal, rather than just dig it up and ship it out. (I don't expect many readers to understand this concept, I will explain in detail if the request is there) The supply contracts to the smelters have embedded derivatives linking the price they pay to the LME price for Aluminium. Although it is not impossible that, under severe economic conditions, ESKOM sells at a loss, what is never mentioned is the fat profits ESKOM makes when the LME price for Aluminium is high. The contracts are structured such that, over a period of time, ESKOM will never lose money. The smelters have the higher priority in SA, yes. Simple - they cannot be shut and hae to run continuously. Look at bhpbillitons latest fin results and annual report. Their Aluminium sector is the worst performer in the group. Analyzing the figures it is not difficult to calculate that the south African smelters are either running at a loss, or barely breaking even. To insinuate they make 'fat profits' is irresponsible and wrong. The bulk purchase vs single purchase example I have remains valid, irrespective of where one sit on the supply/demand curve. If anyone disagrees, maybe you should write a book on economics as you are postulating something totally new. Lastly, another reason that electricity supplied tithe smelters are cheaper is because they take in electricity at 132kV, from substations a very short distance from the main ESKOM transmission network. There is therefore very little conversion (and hence losses) from the time the "electricity leaves he power station" to the "time it reaches the smelter". Domestic users take in at 380V or 220V, through numerous substations, lengthy cables, numerous transformers, etc, and due to the number of times electricity has to be converted, losses are much greater and there is much more electrical infrastructure required to get electricity to homes (which need to be paid for, and maintained), than the smelters.

  • lindz.kok - 2012-01-30 13:23

    whats new? anc ignoring warning from the previous gov, because name changes is more importand than prevention. be it prisons schools or electricity, thank you (A)nual (N)ative (C)oruption

  • Fredster - 2012-01-30 13:23

    Stop development of new complexes

  • thasmeel.singh - 2012-01-30 13:25

    Oh no! not this crap again!

  • Brett - 2012-01-30 13:31

    Once again the poor consumer must pay for the excesses of the fat cats at eskom who increase our charges and take bigger bonus but cant manager thier own business. In any corporate company they would be fired, no strategic or forward planning, its a disgraces , Zonke

  • Shirley - 2012-01-30 13:40

    Spend more money on regular maintenance,hire proper staff and spend less on BONUSES!

  • Stephen - 2012-01-30 13:46

    I was wondering what that 49M advert was all about: very poor for getting the message across. As for Eskom's latest round of excuses: they ring hollow and indicate poor business planning and management. You got rid of your expertise when you started "employment equity". My grapevine suggests a lot of new recruits paid well and haven't a clue what to do. Is this so?

  • Eugene - 2012-01-30 14:15

    Please ask the SENIOR, HIGHLY SKILLED WHITE EMPLOYEES that were pushed out the door at Eskom and who had to seek work in other countries, such as France to come back.

  • Trevor - 2012-01-30 14:19

    ONLY solution to this is government to push for more than just solar geysers which they have now killed off. Nuclear is also NOT a solution as have been proven by the USA,Russia and now Japan, imagine Koeberg going into meltdown, fine they said it could NEVER happen, Japan said the EXACT same thing and now...We'll have to take back control and be clever about it, right now we are FAR to reliant on the ANC and we know they are USELESS in running ANYTHING...ok so cut power for a full day let alone 2,3 or a week, then what...next cut water...think about it, just remove those two vital services, what you going to do, complain, well you still don't have the services so be clever, start to look at boreholes,storage tanks,generate your own power through whatever means you can afford, change to gas or get gas portable stoves/heaters...etc...limit your exposure to this parasite that call themselves "Revolutionaries/Freedom Fighters", the ANC! Or you can complain and suffer cause it will only get worse.

  • EyesEars - 2012-01-30 14:20

    Sounds to much like a planned thing again. Not surprising at all. At the end of the day it will not be about money anymore, but about blood! Sounds familiar? For those who do not understand, seek and you shall find!

  • Sergio - 2012-01-30 14:53

    What has ESKOM done with the increases that we are currently paying??? Just another excuse for a further increase... just like a litch...suck every penny out of the consumer to suit their lifestyles... SICK

  • Marius Koen - 2012-01-30 15:05

    Stop selling electricity to our neighbouring countries.

  • Richard - 2012-01-30 15:30

    Should I laugh or cry. Our rates were increased by some 30% per annum for 3 years to make up for the lack of planning and to get funds together to now provide for the increased demand. So now we are paying substantially more for electricity and are still told the same thing. I assume after this message will come the power outages again to be followed by another announcement that more funds are needed to replaced or create more electricity. I take it that it is time to haul out that generator again. The bigger picture is that this problem is not only in the electricity supply department but every department and by the time we have paid for all that is required the demand for payment has increased again so the old story of the bottomless pit. Considering that only one fifth of the population is actually paying for this lot the funds will dry up and then the services will dry up and then we will still be paying the same levels for no services. Wow, talk about upliftment. I agree, upliftment certainly did take place. Problem is that it did not take place the way it was promised. But then again, Zuma could fly to America with two planes so I suppose somebody was uplifted in a big way.

      Jys - 2012-01-30 16:37

      Problem is that municipalities earn more per kwh than Eksdom does. Eksdom get about 50-60c per kwh. The municipalities take the diff. If you under CT you pay around R1.60 per kwh of which Eksdom receives 60c. Sounds perverse to me.

      Jys - 2012-01-30 16:37

      Problem is that municipalities earn more per kwh than Eksdom does. Eksdom get about 50-60c per kwh. The municipalities take the diff. If you under CT you pay around R1.60 per kwh of which Eksdom receives 60c. Sounds perverse to me.

      Jys - 2012-01-30 16:37

      Problem is that municipalities earn more per kwh than Eksdom does. Eksdom get about 50-60c per kwh. The municipalities take the diff. If you under CT you pay around R1.60 per kwh of which Eksdom receives 60c. Sounds perverse to me.

  • Richard - 2012-01-30 15:34

    Moolman your argument is stupid. It would be ok if you were buying bulk and the supplier were still making a profit. If you are selling at a loss then the more you sell the more you lose. No Brainer.

  • darryl.maze1 - 2012-01-30 15:36

    You are all wrong ppl, It's apartheids fault. Thats what is usually to blame when something doesnt work. To be honest with this bunch of anc idiots this country is doomed for disaster. And the sooner the ppl that keep voting for them on there broken promises catch a wake up and find a new party to vote for we are gonna keep having these problems.

  • justin.pretorius - 2012-01-30 15:43

    Idiots don't plan

  • Desmond - 2012-01-30 16:53

    Not enoiugh for the existing customers but they are continuing to electrify for non payers for free. Makes sense?

  • Ruan - 2012-01-30 18:07

    Stop giving electricity to neighbouring countries for free,,eg,,Rhodesia

  • anselmo.coelho1 - 2012-01-30 20:24

    Break it man at least you do well at that !!!!

  • ArchAngel - 2012-01-30 21:11

    EKSDOM is recovering from the FEW THAT PAY in order to supply the MASSES THAT DO NOT PAY. The proof is in the photographs. They FAILED to PLAN, FAILED to RECOVER COSTS, FAILED TO MANAGE. And for that they GAVE THEMSELVES MILLIONS IN PERFORMANCE BONUSES. Only in your country I suppose.

  • Lee-Anne - 2012-01-31 09:10

    To late to cry over spilt milk! The Government needs to start prioritizing or else we are going to end up like Zimbabwe and all those other poor countries!!

  • H. - 2012-02-01 12:35

    Decrease staff bonuses and increase the rebates on solar geysers. This will help us all.

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