EXCLUSIVE: 6 reasons why Eskom is load shedding | Fin24
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EXCLUSIVE: 6 reasons why Eskom is load shedding

Nov 24 2014 07:00
Adiel Ismail

Cape Town - As the country once again experiences rolling scheduled blackouts for the third time this year, energy analyst Chris Yelland explained to Fin24 what he thinks the real reasons are.

Eskom has blamed the country's electricity woes on a collapsed coal storage silo, ‎a short supply of diesel, water and the weather.

"The reasons that Eskom has given for the prevailing blackouts that we have been experiencing are consequential reasons based on an underlying cause,‎ namely that the completion of Medupi and Kusile is running 10 years late."

LATEST FROM ESKOM: Load shedding fears for later this week

Yelland said the first five-year delay was caused by policy indecisions and the second five years by execution delays.

"The government has only itself to blame for policy indecision and Eskom is largely responsible for the execution delays."

He warned that load shedding problems will continue. "They will get worse until Medupi and Kusile come on line and even then we are still going to be playing catch-up," said Yelland.

"If Eskom had adequate generation reserve margins then it would not matter if we had wet weather or hot weather or cold weather or a coal silo collapse.

"To blame the weather is nonsense. To blame the shortage of diesel and water is nonsense."

Yelland cited the following six reasons for the delays at Medupi and Kusile that have caused the prevailing electricity crisis:

1)    The first reason is a lack of clear policy decision. Yelland said this delayed the decision to proceed with Medupi and Kusile by 5 years.‎

2)    The absence of a funding plan. Yelland said that the construction of Medupi and Kusile had proceeded without knowing where the money would come from to pay for the projects. "A few years into the projects, they had to be delayed until government had put a funding plan in place."

3)    Geological problems during the civil work phase. Yelland said that inadequate geological surveys were done. "This resulted in major delays in the construction of the foundations of Medupi and Kusile."

4)    Boiler-welding issues. The contract with Hitachi saw major welding quality problems within the boilers, which required significant rework.

5)    Inadequate level of skills and inadequate availability of skills. Yelland said this was partly due to the fact that two mega projects were built at the same time.

6)    Labour problems resulted in significant strikes and labour unrest during the construction period which brought work at Medupi and Kusile‎ to a standstill. "Initially Eskom did not implement a site-wide labour agreement," said Yelland. "Conditions of employment of site labour were left to the many contractors, and this meant, for example, that workers doing similar work were being paid differently, leading to discontent."

Economist Chris Hart told Fin24 that the latest round of load shedding seems to have been better implemented compared to previous blackouts.

However, he also expressed concern about the power plant delays. "The main thing that we are missing out on is the main reasons why Medupi is delayed. At the end of the day we need extra energy capacity."

Hart said load shedding is costly from an investments point of view and the economy itself, although he noted that South Africa is not the only country to suffer from power shortages.

Several attempts by Fin24 to get comment from Eskom proved futile.

As it happened: Get ready for weekend load shedding



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