Eskom Starts Maintenance With Sustained Power Cuts

(Bloomberg) --

South Africa’s state-owned power utility changed its approach to fixing a coal-fired generation fleet prone to breakdowns by shutting units down long enough to improve their reliability.

The new strategy began Monday with Eskom Holdings SOC Ltd.’s announcement that it will remove 2,000 megawatts, known as stage 2 loadshedding, from the national grid until Thursday. Chief Executive Officer Andre de Ruyter said on Friday the company had approval to ramp up “philosophy maintenance,” in which generation units are serviced in adherence to prescribed schedules by the manufacturers.

Eskom, which supplies about 95% of the nation’s power, previously had a capacity surplus. Regular overhauls of generation equipment were progressively bypassed, shrinking the reserve margin. The utility has been cited as the biggest threat to South Africa’s economy because of its inability to provide a regular supply of power and its debt burden of more than 450 billion-rand ($30 billion).

De Ruyter’s introduction of sustained outages differs from the utility’s previous strategy, in which all available units, including those intended for peak demand, would be run as needed to stave off power cuts. When outages did occur, the public and businesses had little time to prepare for them.

Blackouts are estimated to have reduced South Africa’s gross domestic product by as much as 118 billion rand ($7.9 billion) last year, according to the Council for Scientific and Industrial Research, a state research institute.

The introduction of “philosophy maintenance” means there is an increased likelihood of outages for the next 18 months, De Ruyter said on Friday. Eskom will also focus on fixing defects at new plants as well as “extending the life of operating units, reducing unplanned outages and managing coal quality and handling-related issues,” according to the plan.

City Power, Johannesburg’s electricity distributor, was able to prevent some of the recent power cuts because 10% of its supply comes from sources outside of Eskom. The loss of a substation had forced it to participate in electricity rationing, it said in a statement.

Eskom will suspend stage 2 power cuts from 4 p.m. to 6 p.m. local time to ease traffic congestion during rush our, the utility said later on Monday.

©2020 Bloomberg L.P.

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