The emphasis being given by State-owned electricity producer Eskom to the turnaround in the performance of its fleet of coal-fired power stations is not only appropriate, but also encouraging.

Last week, the utility outlined a five-point recovery plan, while cautioning that an additional 7 400 MW of capacity would be required this year to provide the cushion it required to enable it to deal with its maintenance requirement – a maintenance-capacity shortfall that would persist until 2019, but at a lower level as new capacity was introduced.

It also highlighted that 60% of its power stations were older than their recommended design life of 30 years. As a consequence, there had been an increase in unplanned and mechanical-maintenance failures. In addition, outages needed to endure for longer periods, were more costly to implement and required specialist engineering skills to complete.

The recovery plan was premised on a recommitment to Eskom’s ‘80-10-10’ operating philosophy, which implied 80% plant availability, 10% planned outages and 10% unplanned events over a period of a year. In 2013/14, the group’s unplanned capacity loss factor rose to around 11%, while its energy availability factor fell to 75.1%.

The intervention would also focus on embedding good practices, from adhering strictly to standard operating procedures to improved online maintenance. “Visible, aligned and felt” leadership, as well as hands-on oversight and mentorship were also stressed, along with plans to more fully leverage demand- and supply-side opportunities.

The plan was unveiled only weeks after Public Enterprises Minister Lynne Brown called for “extraordinary” steps to be taken to deal with the “unsatisfactory” performance of Eskom’s generation fleet. It also came after it had been confirmed that former mining executive and Energy Intensive User Group chairperson Mike Rossouw had been appointed on a one-year assignment to initially focus on finding remedies to the performance problems being experienced at the power stations (also see story on page 10).

That said, Eskom’s presentation made it clear that the turnaround could take some time, particularly in light of the utility’s admission that there had been “over 15 years of underexpenditure” on a fleet basis.

Adding to the concern were the utility’s current financial difficulties, with Eskom facing a near-term liquidity challenge and forecasting that it would become cash flow negative by June 2015.

Alternative sources of funding, including additional borrowing options, were being considered. But Eskom reiterated that financial sustainability could not be achieved through borrowing and efficiencies alone, as it faced a R225-billion revenue shortfall and the prospect of R47-billion in lower-than-expected sales.

Brown reported last week that the intergovernmental task team, comprising the Department of Public Enterprises, the Department of Energy and the National Treasury, was working with Eskom and the National Energy Regulator of South Africa to formulate a solution to the immediate challenges being faced by Eskom. “A draft report with options has been shared with us, and we are going to be receiving the final proposal soon, after which we will take it to this Cabinet subcommittee and Cabinet ideally before the end of September,” Brown reported.

Despite ongoing uncertainties, it is nevertheless heartening to see much-needed attention being given to arguably the key operational problem currently confronting Eskom: the underperformance of its power genera- tion assets.