Eskom asks govt for more money as debt climbs beyond R450bn

The power utility’s debt is reaching levels beyond R450 billion and Mabuza was in Parliament on Tuesday asking government for more money.

CAPE TOWN - Eskom CEO and board chairperson Jabu Mabuza said the power utility's debt levels have reached the ceiling.

Eskom’s debt is reaching levels beyond R450 billion and Mabuza was in Parliament on Tuesday asking government for more money.

He said the power utility has not done enough to generate more revenue.

The acting CEO also admitted that Eskom was borrowing money to pay off its debt.

“Our revenue over the past 10 years, increasingly so over the last five years, has actually been flat to about 1% per year. On the other side, we’ve had a ballooning debt that we have not been able to collect which has totalled to R38 billion.”

Mabuza said the only function Eskom could control was its own expenses.

But they are not controlling their own expe ses. What about the exorbitantly paid supernumeraries?

Edited September 10, 20197 yr by DeepBass9

I have no hope that they can nor will fix it.

This Eskom thing will have to be broken before it can be fixed.
And when it breaks, then you need the populace to get really REALLY riled up.

11 hours ago, DeepBass9 said:

But they are not controlling their own expe ses. What about the exorbitantly paid supernumeraries?

That's a problem. So is power theft and sheer vandalism. COJ have just had to replace a whole substation that was burned down after cable thieves either deliberately trashed it or caused a fire. During the installation of the new sub their workers were attacked - which set the project back 2 days.

I'm using COJ as an example here because (being a COJ customer) I have more information about them than Eskom itself, but I'd not be surprised if these problems are wide spread.

The substation I mentioned is also overloaded due to illegal connections. COJ have embarked on a program of disconnecting illegal connections, but it's a huge problem for them to combat. Mostly the connections get remade a day or two later. Back to square one.

But yes, something has to give here. Probably it will be the taxpayer's wallet. No matter how we complain, with much justification, Eskom going under is a very bad outcome for the country, so whilst we should expect them to start trimming the fat, we need to brace ourselves too for propping them up.

The problem is they appoint yet another CEO to sort the problem out, but it is just window dressing so the incumbent is either incompetent, or has no will to take the hard decisions, or is hamstrung by politics to take the hard decisions.

It is well known that cadres and relations of cadres are the ones with the coal supply and transport contracts, so they don't really want to fix the problem as their income and influence will dry up.

Right. So let me answer just a tad off the beaten path. Controversial opinion coming up.

These bailouts are unavoidable and have to be done.

Woaaah plonkie, why are you supporting the corruption? 😛

The thing you have to understand is that Eskom is like a massive ship. You can't turn or stop this thing in any small space. If you want to turn by next week you have to start working the tiller this week. In the mean time you have to bail out (pun intended) the water that is leaking in...

That is the main question: Is someone working the tiller yet. I get the feeling the answer is no... because the ANC has to sort out their own internal mess first.

Roeloff Botha gave me a lot of hope in this segment. It's in Afrikaans, so not all might understand it. This guy is adviser to the Optimum group (that is Dawie Roodt's group). They generally have a very balanced approach to this country.

Edited September 11, 20197 yr by plonkster

30 minutes ago, plonkster said:

Right. So let me answer just a tad off the beaten path. Controversial opinion coming up.

We know the bailouts are a given.
We know it will take years because of politicians vs a private sector company, then it would have been done much faster.
We have no clue IF the politicians can manage Eskom nor do we know if they can stop the corruption.
And we know the Unions are the biggest stumbling block today towards anything Eskom needs to do.

But I did like the upbeat reporting on KykNET. Can only hope.

Edited September 11, 20197 yr by Guest

I think a hard reset will be the only thing that turns it around. So it will get worse before it gets better. Something along the lines of a bond default, salaries not paid, union sabotage, significant load shedding again then an IMF bailout with strict Ts & Cs.

25 minutes ago, DeepBass9 said:

I think a hard reset will be the only thing that turns it around. So it will get worse before it gets better. Something along the lines of a bond default, salaries not paid, union sabotage, significant load shedding again then an IMF bailout with strict Ts & Cs.

Jip, sometimes you have to BREAK something to FIX it. 
And yeah, it will be extremely painful for everyone.

Or even a natual event like a tropical cyclone which drenches all the coal for a week non stop will cause massive load shedding.

Another thing is the opportunity cost. Imagine platinum suddenly goes to $2000/oz and everyone is champing at the pit to fire up their smelters 24/7 or build new one's. What 's going to happen? Eskom will put a lid on that, and the ship will sail. It wouldn't be the first commodity boom that SA has missed.

5 minutes ago, DeepBass9 said:

Or even a natual event like a tropical cyclone which drenches all the coal for a week non stop will cause massive load shedding.

Another thing is the opportunity cost. Imagine platinum suddenly goes to $2000/oz and everyone is champing at the pit to fire up their smelters 24/7 or build new one's. What 's going to happen? Eskom will put a lid on that, and the ship will sail. It wouldn't be the first commodity boom that SA has missed.

Sad, but true.

Miners are however trying to mitigate that somewhat, Harmony is out on procurement for a 30MW solar plant in Welkom (However the total capacity they require across all operations is 280MW) so its around 11% of the capacity they need, but still not a bad start.

Now if every Top40 JSE company clubs in for a 30MW plant we can avoid 1 stage of load shedding

This is what the eskom break up is supposed to facilitate. They should be able to generate, wheel the excess though the grid for another user somewhere else.

Thought I'd post this for interest. It's the import and export metering on my (miniscule) grid-tied system for the first 10 days of this month.  A tiny net export to Eskom, which I expect will grow throughout summer, but which I'll never be paid for. Still undecided whether I'm part of the problem or part of the solution.

You have saved about 200g of coal from being burnt! #ClimateHero!

For interest sake, thermal coal is about 25MJ/kg /3.6 = 6.9 kWh/kg / 1.32kWh = about 200g of coal saved!

8 hours ago, DeepBass9 said:

You have saved about 200g of coal from being burnt! #ClimateHero!

For interest sake, thermal coal is about 25MJ/kg /3.6 = 6.9 kWh/kg / 1.32kWh = about 200g of coal saved!

Well technically he saved much more than that, because he is generating electrical energy and not thermal.

Very efficient coal plants are 40% efficient, so with that in mind if we take

6900 kWh per ton thermal energy it only equates to 2760kWh of electrical energy.

So the electrical power of coal is only around 2.7kWh/kg, so he saved 1.47kWh/2.7kWh = 544g of coal

I think I might be nitpicking here?

 

Hey and on that note, my little smartsolar 100/20 has generated 221kWh  = 221kWh / (2.7kwh/kg) = 81.85kg of coal!

Whoop whoop! One whole wheelbarrow load! Where do I go to get my #ClimateHeroZero badge?

17 hours ago, PJJ said:

Miners are however trying to mitigate that somewhat, Harmony is out on procurement for a 30MW solar plant in Welkom (However the total capacity they require across all operations is 280MW) so its around 11% of the capacity they need, but still not a bad start.

Now if every Top40 JSE company clubs in for a 30MW plant we can avoid 1 stage of load shedding

They get a 100% rebate on any grid tied solar installation. What's stopping them? I suspect it's that a retro fit of a big office block might disrupt operations. But why don't they plan? Several big new buildings have gone up in Sandton the last couple of years and the solar could have been designed in - if the owners wanted it. 

PJJ's point is interesting - from a national point of view we don't actually need them go all the way off grid, just to shed a bit of load.

Won't help so much in evenings though, but still, the tax incentive is there for them.

18 hours ago, PJJ said:

Sad, but true.

Miners are however trying to mitigate that somewhat, Harmony is out on procurement for a 30MW solar plant in Welkom (However the total capacity they require across all operations is 280MW) so its around 11% of the capacity they need, but still not a bad start.

Now if every Top40 JSE company clubs in for a 30MW plant we can avoid 1 stage of load shedding

The coal mine I retired from constructed a big solar panel plant which was supposed to save it money. 

When I left they still couldn’t fathom why there was no money saving on their monthly bill.

So it’s not so easy. On big plants there is no one way valve to block the power from going out. And like in a house consumption varies all the time. We shaped our production round maximum demand tariffs which was when the sun wasn’t shining.

Btw they had lots of highly qualified engineers.

Edited September 12, 20196 yr by Johandup

1 hour ago, Johandup said:

The coal mine I retired from constructed a big solar panel plant which was supposed to save it money. 

When I left they still couldn’t fathom why there was no money saving on their monthly bill.

So it’s not so easy. On big plants there is no one way valve to block the power from going out. And like in a house consumption varies all the time. We shaped our production round maximum demand tariffs which was when the sun wasn’t shining.

Btw they had lots of highly qualified engineers.

As with all things, T's and C's apply, if you know that your demand will always outstrip your supply, your panels are always working at their best.

We are also designing our office system around peak demand savings, and in our case we are in for saving a boat load of money, our peak demand is 130Kva and it is always in the middle of the day since we have lots of refrigeration going on, and that also happens to be the exact time of day that the PV system should be flexing its muscles, are we going to put up a 120KW array? Hell no, just 35KW, because there is always a 20-45KW base load, and we will take the entire 35KW off of our maximum demand charge.

Adding more capacity beyond that would fall prey to the law of diminishing returns.

 

2 hours ago, Bobster said:

PJJ's point is interesting - from a national point of view we don't actually need them go all the way off grid, just to shed a bit of load.

Exactly, Eskom's major problem currently is a capacity problem, I think this is where SSEG's can quickly come in and add capacity, building a new coal of nuclear station takes years, adding already constructed private capacity sitting on the sideline waiting for NERSA is just a stroke of a pen away.

4 hours ago, PJJ said:

... is just a stroke of a pen away.

Your forgot to menton the "fees" involved for the people in and around the deals, not forgetting Unions who also needs confirmations. 😉

Pens and ink and the effort to sign costs money!!!