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Eskom cuts diesel bill by R760m in five months

Apr 19 2016 14:53
Adiel Ismail

Cape Town - Eskom has reported a significant decline in diesel usage from R800m to R40m in five months as the power utility makes steady progress in its turnaround strategy.

Following a two-day board breakaway session in which Eskom’s key performance targets were assessed, Eskom’s board of directors led by chairperson Dr Baldwin Ngubane expressed satisfaction on the progress made so far in turning around the company’s operational and financial performance.

"Eskom has decreased the usage of diesel from R800m to R40m in five months due to improved performance of our base-load fleet," said Ngubane.

The power utility, which stated in its interim results last year that it spent R1bn a month on diesel, said it will continue with its maintenance programme without implementing load shedding.

Eskom's diesel burn

It will do this while also minimising usage of the open cycle gas turbines (OCGTs), one of the most expensive ways to generate power by burning diesel.

"Eskom has not implemented load shedding for the past nine months, and our plan is to continue implementing appropriate levels of planned maintenance to ensure long-term plant reliability.

"This has resulted in a drastic reduction in unplanned maintenance and the number of breakdowns over the past nine months, positively impacting plant availability."

Eskom said the reduction in unplanned outages contributed to improvements of plant availability and the resultant sharp drop in the use of OCGTs.

"OCGT (diesel) usage declined by 53% between October 2015 and December 2015."

Last year, following the suspension of four senior officials, the Sunday Times revealed that a dentist and a beautician were among those procured to supply R200m worth of diesel for Eskom's generators.

The resilience of the power system was stress-tested last week following multiple trips of units at three power stations, a move that resulted in a loss of 3 535 MW.

"No load shedding was implemented due to the increased resilience that Eskom has built into the power system over the past few months."

While improving the performance of the existing ageing fleet, Eskom indicated that it also managed to fast-track the building of new generating capacity.

This includes work at the Ingula Pumped Storage Scheme where unit 3 was synchronised to the national power grid in March, the testing before synchronisation of unit 4 and construction work on both units 2 and 1.

Eskom noted that it also continues to execute its build programme.

In February this year unit 1 of the Kusile power station successfully completed factory acceptance tests, an important milestone towards the synchronisation of the unit.

Medupi’s unit 5 also completed its factory acceptance tests in December last year and is expected to come into full commercial operation by March 2018.

The Majuba rail project is expected to be completed by December 2017. Once commissioned, the security of coal supply through logistics solutions at both the Majuba and Tutuka power stations will transport about 21 million tonnes of coal per year by rail.

This project is a component of the Eskom Road to Rail Initiative with the construction of a railway line that links the Majuba power station to the main coal railway hub in the town of Ermelo in Mpumalanga.

The 68km corridor is the first large greenfield freight-rail infrastructure project to be carried out in South Africa since 1986 and will be operated by Transnet Freight Rail.

"As a result of a stable power system, Eskom has also managed to increase its electricity exports to neighbouring states whose hydroelectric dam has been adversely affected by the drought," it stated.

eskom  |  electricity  |  energy
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