State-owned electricity utility Eskom has reported a dramatic decline in diesel consumption and costs, amid improvements in its maintenance practices and a rise in the energy available from its coal-fired power stations.
Delivering the group’s February State of the System Update in Johannesburg on Wednesday, CEO Brian Molefe reported a 66% decrease in the use of the diesel-fuelled open-cycle gas turbines (OCGTs) from October to January.
He also reported a material drop in monthly diesel costs, which fell from a peak at over R1.5-billion in July to R188-million in January.
Eskom did not provide a period-on-period analysis, but showed that its diesel costs had been persistently above the R1-billion level from April to July, but had since more or less halved from the July peak during the period from August to January. However, costs did spike at R854-million in October.
Its OCGT use – which rose sharply in the first six months of Eskom’s financial year to end September, when it produced 2 961 GWh as compared with from 1 164 GWh during the same period in 2014 – has also moderated.
Molefe reported that it produced 847 GWh at Ankerlig and Gourikwa in October, November and December against planned output of 1 153 GWh for the three months.
He attributed the lower usage to a 10% decline in unplanned outages during the three months and improved plant performance on the back of it ‘Tetris’ maintenance model, which sets a budget for planned and unplanned outages that can be met in the absence of load-shedding.
Rotational power cuts, which were a major feature of the early parts of 2015, had also reduced, with Eskom having gone nearly six months without a load-shedding incident, besides two hours and twenty minutes of stage-one load-shedding on September 14.
Molefe announced that, while the risk of load-shedding persisted, the utility did not anticipate the need to implement rotational cuts for the rest of summer, or during the winter months to the end of August.
The fall in diesel costs in the absence of load-shedding is likely to raise questions about the prudency of Eskom’s application to recoup R8-billion in extra diesel costs, over the R2-billion approved by the National Energy Regulator of South Africa (Nersa) for the 2013/14 financial year of the third multiyear price determination, or MYPD3.
The diesel variance forms a major component of a R22.8-billion Regulatory Clearing Account application currently being deliberated upon by Nersa, with Eskom arguing that the extensive use of the OCGTs in the year was prudent as it had resulted in lower incidences of load-shedding, which carry a higher economic cost.
Molefe also announced that the utility was moving ahead with the conversion of the OCGTs to dual fuel facilities, with contracts having being placed with Sulzer for the conversion of the nine Ankerlig units and Siemens for the five Gourikwa units.
It was also in talks with PetroSA and Ibhubesi about gas supplies to Gourikwa and Ankerlig respectively.