Tag Archives: Eskom

Eskom’s 20% uses ‘impossible’ assumptions

Fin24, 11 June, 2017.

Eskom’s plans to ask for a 20% tariff increase for next year assumes higher economic growth than just about anyone expects – and assumes a physically impossible doubling of sales by renewable energy independent power producers (IPPs), despite Eskom actively fighting against their coming online.

It also assumes that Eskom will get rid of about ­­4 300 workers – 10% of its workforce – by March 2019 by not filling the posts left vacant when a member of staff retires.

These assumptions make the application likely to once again result in an enormous additional tariff request later on using the so-called Regulatory Clearing Account (RCA), which is a monitoring and tracking mechanism that compares certain uncontrollable costs and revenues with actual costs and revenues incurred by Eskom.

A confidential draft of Eskom’s planned application for next year’s tariff hike to the National Energy Regulator of SA (Nersa) made its way into the public domain this week. It spells out all the mechanics regarding how the utility came to the 20% figure.

Here is the full article

Eskom funding may be muffling dissenting voices on nuclear

EE Publishers, Micah Reddy, amaBhungane, 28 April, 2017

The lure of millions in Eskom funding appears to have muzzled two research institutions previously highly critical of the state-owned utility’s plans to procure a fleet of nuclear power stations.

In the case of the Council for Scientific and Industrial Research (CSIR) amaBhungane understands that the CSIR’s Energy Centre has been effectively gagged since a secrecy-shrouded meeting in March this year between acting Eskom CEO Matshela Koko and his counterpart at the CSIR, Dr. Thulani Dlamini.

In the other case, the Centre for Renewable and Sustainable Energy Studies (CRSES) at Stellenbosch University withdrew comments it had submitted for publication that were highly critical of Eskom’s nuclear plans.

In an email seen by amaBhungane, CRSES director Wikus van Niekerk said: “We receive significant funding from Eskom, some from a programme where Matshela is personally involved in, and I need to be careful how I react in public not to put this at risk.”

Eskom, the CSIR and CRSES have all denied that Eskom has in any way tried to rein in independent research or debate on nuclear or renewable energy options.

Case 1: CSIR Energy Centre

Several industry insiders, who asked not to be named, raised the alarm after the CSIR Energy Centre’s head, Dr. Tobias Bischof-Niemz, suddenly pulled out of an event on South Africa’s future energy supply in early April.

They told amaBhungane that a strong rumour had emerged that at Koko’s March meeting with the CSIR chief executive, Eskom had pledged a significant sum – R100-million was mentioned – for CSIR research on technology related to nuclear energy. AmaBhungane was unable to independently verify the claim.

While there is no evidence of any untoward quid-pro-quo, the same sources noted that the CSIR Energy Centre has withdrawn from other public engagements on renewable energy and South Africa’s future energy mix.

Adding to suspicions is the reluctance of both Eskom and the CSIR to disclose any detail of the meeting between Koko and Dr Dlamini.

Both institutions declined to answer questions about who attended the meeting, what was discussed and whether Koko offered the CSIR additional funding, as rumoured.

Eskom spokesperson Khulu Phasiwe told amaBhungane the two institutions have had a long-running partnership: “CSIR and Eskom continue to enjoy a strong relationship in spite of occasional, but understandable, disagreements. Interim Group Chief Executive, Mr. Matshela Koko, meets with our partners on a continuous basis and, by their nature, these meetings are confidential.”

Phasiwe said Eskom had R30,8-million worth of “multi-year collaborative projects” underway with CSIR and another R17,5-million worth were “actively under consideration”.

The CSIR insisted the organisation “did NOT receive any payments from Eskom in order to stop any research that we are conducting,” but ignored questions about Bischof-Niemz’s non-attendance at the April event where he was scheduled to give a presentation on renewable energy.

Up to now the CSIR Energy Centre has been vocal about its research on South Africa’s optimal energy mix, which suggested that the price of renewables had dropped to the point where government’s plan to procure 9,600 MW of nuclear power did not make financial sense.

By contrast, the CSIR’s recent formal response to the Department of Energy’s latest draft energy policy – the Integrated Resource Plan (IRP) – was quietly placed on the CSIR website in early April without publicity or further commentary.

Asked about this, CSIR spokesperson Tendani Tsedu said: “The organisation will not comment any further on the submission made to the DoE since the CSIR submission is already public information as indicated above. This will also allow the DoE to conclude its internal processes towards the finalisation of the IRP.”

Last year the CSIR Energy Centre began publishing the findings of its studies into South Africa’s future energy scenarios.

The groundbreaking research showed a strong preference for renewable energy and posed a major challenge to the case for nuclear, of which Eskom has been a strong proponent.

The results of the research were widely cited and the CSIR Energy Centre’s staff presented their findings at conferences, seminars and business and technical briefings. They also did not shy away from voicing critical opinions on energy matters in the media.

But sources close to the CSIR Energy Centre told amaBhungane that the Centre’s staff appear to have been muzzled and are now avoiding public engagements on their renewables and IRP-related research.

According to Dudley Baylis, energy director of Bridge Capital – one of the organisations involved in the April event where Bischof-Niemz was due to speak – the CSIR Energy Centre informed the organisers at the last minute that they were “unable to share their energy scenario work”.

Other sources say that the CSIR Energy Centre has recently had to cancel similar events and media interviews related to energy systems, and that Bischof-Niemz is subject to a virtual gagging order by CSIR’s management.

Approached for comment, Bischof-Niemz referred amaBhungane to the CSIR’s communications manager.

Here is the full article

ON THE MONEY: The real Eskom story is: the money

Business Day Live,  STUART THEOBALD, 20 APRIL 2015

There is no question that the government has to forestall serious financial distress at Eskom. It has to, for the sake of our financial system as well as economy. Eskom is too big to fail, in more than one way. It doesn’t just keep the lights on, but keeps the financial system working.

Read more…

SMALL COAL PRODUCERS: Knock-on effects

ESKOM, the backbone of the coal market for most emerging miners, is buying lower volumes of coal as electricity sales decline.

This is adding another difficulty to a lengthening list for aspiring new coal-sector entrants.

Coal was identified by the department of mineral resources several years ago as a sector where black enterprise would be promoted. But though barriers to entry for low-tech coal mining are far lower than deep-level gold or platinum mining, entrepreneurs still face a long list of difficulties.

Over the past two years, global coal prices have weakened, financiers have looked for better returns elsewhere and Eskom’s coal burn rate has fallen below predictions. The domestic market for coal last year was about 182Mt, of which 120Mt was bought by Eskom. Read more on FMail

Eskom faces it’s battle of Majuba

The collapse of a coal silo at Eskom’s Majuba power station highlights the precariousness of the country’s electricity supply.

The threat of further load shedding has frustrated business, which, after months of protracted strikes, is trying to catch up on lost production, or gearing up for the festive season. But Eskom is just one of the constraints to economic growth, according to economists and energy specialists. Eskom announced earlier this year that it would no longer forego maintenance on its aging power stations in a bid to keep the lights on. It warned of a constrained power system for years to come.

Full production from the Medupi power station, even if it could be brought on stream tomorrow, will not be sufficient to meet the 7 400 megawatts (MW) needed to meet the maintenance backlogs. Read more