Eskom: Facing the challenges of reliable power supply

The challenge of supplying South Africa with a regular supply of power seems to be highlighted on an almost daily basis in the press. Charged with this huge and complicated issue is Eskom, the national utility, trying to balance challenging finances, an ageing infrastructure and increasing demand.

“Eskom generates approximately 95 per cent of the electricity used in South Africa and approximately 45 per cent of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Additional power stations and major power lines are being built to meet rising electricity demand in South Africa. Eskom will continue to focus on improving and strengthening its core business of electricity generation, transmission, trading and distribution,” states the company website.

Of course ensuring service delivery is met requires an efficient and modern infrastructure – and that in turn relies upon investment.

The company website outlines the sheer size of investment: “Since 2005, Eskom has been expanding its generation and transmission capacity to meet the country’s growing demand for energy. Eskom’s nominal generating capacity in 2005 was 36 208MW. The programme will increase this by 17 384GW by 2019/20. The key generation expansion projects are the 4 764MW Medupi and 4 800MW Kusile coal-fired stations, and the Ingula pumped-storage scheme in the Drakensberg, which will deliver 1 332MW of hydro-electricity during peak demand periods. Transmission line length and substation capacity will also increase substantially.

eskom-plant“The capacity expansion programme has cost R213.2 billion (excluding capitalised borrowing costs) to date. Between 2005 and 31 March 2014, the programme has increased Eskom’s generating capacity by 6 137MW, its transmission lines by 5 497km and its transmission substation capacity by 27 565MVA.”

In February 2015 Moneyweb.co.za reported that Eskom Holdings SOC Ltd. had raised $1.25 billion in its first international bond sale since July 2013.

State-owned Eskom, has been out of international capital markets after raising $1 billion in 2013. Since then, Moody’s Investors Service and Standard & Poor’s have cut the company’s credit rating as the utility faced a funding shortfall of about 225 billion rand in the 5 years through March 2018.

Whilst Eskom buys electricity from and sells electricity to the countries of the Southern African Development Community (SADC), the future involvement in African markets outside South Africa (that is the SADC countries connected to the South African grid and the rest of Africa) is limited to those projects that have a direct impact on ensuring security of supply for South Africa.

Eskom has in recent years worked on a number of new build projects aimed at increasing capacity within South Africa.

One of the main initiatives has been the construction of the Medupi Power Station, a greenfield coal-fired power plant project located west of Lephalale, Limpopo Province. Medupi is the fourth dry-cooled, baseload station built in 20 years by Eskom after Kendal, Majuba and Matimba power stations.  The name “Medupi” is a Sepedi word which means “rain that soaks parched lands, giving economic relief”.

Once completed, the power station will be the fourth largest coal plant in the southern hemisphere, and will be the biggest dry-cooled power station in the world. The boiler and turbine contracts for Medupi are the largest contracts that Eskom has ever signed in its 90-year history. The planned operational life of the station is 50 years.

Eskom’s website provides an update on the progress at this key project:

“Significant progress has been achieved with the commissioning of unit 6.  The major step of steam blow through for cleaning of the boiler pipework is underway.  This is the last major step preceding the redirecting of steam to the turbine for power generation. Synchronization of the first unit should happen early in 2015, however some commissioning risks still remain, which may delay synchronization by several days. The risks are receiving management’s full attention. Full commercial operation of the unit is expected approximately 6 months later.”

Other projects underway look to embrace the important issue of renewable energy sources. Chief among these has been the construction of the Sere Wind Farm project, located within the Matazikama Local Municipality, on the Western Cape.

Upon completion, this wind farm will comprise of 46 type SWT-2.3-108 wind turbines, each with a capacity to produce 2.3 megawatts of clean electricity. According to the turnkey contract awarded to Siemens, the company will supply, construct, commission, operate and service the wind farm for a five-year period following completion of its commissioning.

According to the Eskom website, the project is being executed for Eskom’s Renewable Energy Business Unit, through which it is hoped that similar projects will be undertaken by the utility. The project will create over 400 direct jobs during its construction and bring significant economic activity to the Matzikama community. Eskom Renewables will also train and employ full-time skilled technicians from the local community to operate and maintain the facility over its life.

The project is forecast to reduce carbon dioxide emissions by up to 6 million tonnes over the projected 20-year life of the plant.

“The first wind turbine was erected at the Sere project on 2 December 2013. Blades for wind turbines and other components for the project began arriving at the Saldanha Bay harbour in October 2013. The turbine components are currently being transported to site. By mid-February 2014, 5 of the wind turbines had been erected,” the website reports.

Eskom also states that the Majuba Rail Project continues to make progress. This important initiative is set to improve the transportation of coal to a number of power stations, most notably the Majuba Power Station, which in turn it is hoped will provide positive economic, environmental and social benefits.

The company website say: “Site establishment on the northern side has been completed while on the southern side it has commenced and is nearing completion. The main activities underway are the establishment of the crusher plant, and workshops. The stripping of topsoil has been completed and overburden material removal, service road bed preparation and bulk fill earthworks are in progress.”

Eskom’s task is not inconsiderable and whilst power outages continue to attract concern and criticism, the utility giant is working hard within its means to deliver the changes needed to secure a long-term, sustainable power supply for all.