Eskom remains concerned about generation; plant performance still unreliable

‘We need a much higher sense of urgency and vigilance to keep our plants going, and we need additional capacity and funding, but there has been some progress’ – Phillip Dukashe, Eskom generation group chief executive.

FIFI PETERS: Eskom held its quarterly systems update earlier today [Monday, October 25], where management reported on the state of the power unit’s maintenance and how things were going there – and also load shedding, which we are currently experiencing.

Read: Eskom in dire straits: Maintenance lags as utility overspends on emergency diesel

Phillip Dukashe, the group chief executive of generation at Eskom joins the Market Update for more. Phillip, thanks so much for your time. Some parts of the country are currently under load shedding, and it’s not a new thing; it has been ongoing for some time in this country. But can you just give us a broader view of the situation around load shedding and help us understand why we’re still experiencing it?

PHILLIP DUKASHE: All right. Good evening, Fifi, and good evening to your listeners. Unfortunately over the past week and this week we’ve had to implement load shedding. This is basically as a result of our generation systems, our power stations being unreliable. We try to run them, but we often run into problems. We have to treat and we have to shut down to fix problems. That is related to a few things.

One, it’s a human issue that we certainly need to deal with and do much better on. The other part is a lack of maintenance over the years, with our plant that is getting old, so it tends to fail and our maintenance practices have not been as great as they should be.

Now, coming to the human side, even given those circumstances, I strongly believe that we can do much better. So we are trying to focus on improving our sense of urgency in terms of maintenance and holding people accountable for negligence – and making sure that as managers we have proper controls.

These are some of the things that are contributing to the system not being as reliable as it should be. Some of them are systemic issues, long term in coming, and other issues are things that we as management have to deal with decisively.

FIFI PETERS: I think we could possibly be in agreement that some of the challenges you’ve just described now are not new. It’s not the first time that you actually attribute the reasons we continue to experience power cuts and load shedding in this country to unreliable power systems and potential negligence [by] some of your workers, and what management should be doing more of. My question to you is: Why hasn’t there been a change thus far? Why are things still not working?

PHILLIP DUKASHE: If I start with maintenance, we are doing maintenance. We have started improving maintenance but our units have been running very hard for a number of years. During that period our maintenance has not kept up; our units are getting old, so to work on that backlog of maintenance is really going to take time.

Earlier today we were looking at to plan just one outage, where you can intervene and fix your plant properly on one unit, it will take you two years from when you start identifying the scope to when you can actually then have that intervention. So it’s going to take time to go through that.

At the same time, because of the constrained capacity, we are running our plants much harder [and] we are actually causing more and more damage. Again, because we want to limit load shedding, we tend to delay some of the maintenance to periods where we can afford it. That is on the plant itself. Its needs attention, it needs to be fixed and, unfortunately, doing that is not going take six months or a year. It’s going to take quite some time. It has taken us a lot of time to get to where we are.

On the people side, that is in place. But these are things that you reinforce and then you have to right them as they occur. You have to make sure that proper action is taken to send the correct signals and correct messages about what will be acceptable and unacceptable behaviour. So that part is an ongoing thing, something that is happening. But we need a much higher sense of urgency and vigilance to keep our plants going.

FIFI PETERS: Help us tailor our expectations, then, around a business-as-usual kind of environment. How long should we be expecting load shedding to be around?

PHILLIP DUKASHE: Fifi, that’s a very difficult question to answer. We say in generation that [first] we need additional capacity in the country. At the moment we are planning our maintenance interventions to be about 10% to 12% of the time. We would like to increase that. But even that sometimes we have to postpone, as I said earlier, because we don’t have enough capacity. So we need the additional capacity in the country to have the space and the capacity to take our plant and fix it.

And then another part is funding. We need proper funding for the work that we do. Now, at Eskom at the moment there obviously is a challenge with that; but we need proper funding and meaningful funding well ahead of time so that we can plan and place contracts for long-lead items and make sure that we can have those interventions. So we need to fix those, and it’s only when we can do that, when we can say with confidence that, look, this is a temporary issue, and it’s going to come to an end, then is when we fix our plant.

FIFI PETERS: Let’s talk about the additional capacity requirements. Where are you looking? Where could that potentially come from?

PHILLIP DUKASHE: At this stage obviously the competence for that will be with the government. Government will decide. It might not be Eskom, it might be IPPs, the independent power producers. It’s a department within government that’s responsible for those decisions. As Eskom, we will implement what has been allocated to us.

FIFI PETERS: And then again, regarding the funding, how much do you need, and where is that likely to come from?

PHILLIP DUKASHE: On a yearly basis we spend about R13 billion on maintenance, and then on outages we spend about R8 to R10 billion. Now that is money that is needed in order to start working on our plant. We are getting this money, we are getting this funding. We just had a challenge in this financial year that some of it came late. As a result, we had to delay our outages because another important thing is these outages have to be very well planned. If we don’t, then we have a disaster. We cannot say this outage is going to take ‘so long’, we cannot say that when the unit comes back, all the scope will have been executed successfully.

So at this stage, obviously from borrowings and from revenue – that’s where the money is coming from that we utilise for our outages.

FIFI PETERS: I think just last month one of your colleagues was on the show, related to the announcement of Eskom calling on South Africans who could qualify for free electricity to come forward and make applications so that they could get this service that was their basic right. Are you even in a position to afford continuing doing that?

PHILLIP DUKASHE: Fifi, I must say that that’s not a really an area of my competence, but I would assume that if that is a government decision in South Africa then as Eskom we’ll have to implement that. We cannot then be selective and say we cannot do that.

FIFI PETERS: All right. Phillip, just one last thing. A lot was said at the briefing today – there have been a lot of moving parts around Eskom with the national efforts to try and fix things. What can you tell us in your capacity around what is working? What progress has Eskom been able to achieve thus far?

PHILLIP DUKASHE: Just speaking for the area that I’m in, which is generation, as I’ve indicated we have a lot of backlog in terms of outages that we need on these units. And we also need to make sure that we are as ready as possible when these outages start. So we have what we measure as an outage-readiness indicator or index now as part of the RMR, which is the ‘Reliability maintenance recovery’ [programme]. These are some of the things we are tracking [on] these units with these outages; are we ready for the outages, are the squares in place, are the contracts in place, are the resources in place – all of those things before we start with those interventions.

Today we shared some of the figures. If those have started to move in the right direction in terms of improvement of the planning that we do, as a result that tends to reduce your post-outage unavailability of forced shutdowns after your interventions, it reduces the duration, there’s more certainty – and then we’ll fix a plant.

We’ve started to improve on those. As I said, though, with the delays in getting the money to plan the issue now, outages, I am personally worried that we may regress a little bit on that, but we won’t have to micromanage that because we need the units and we need to make sure that they are maintained.

That is the type of rigour that is needed. It’s a 24/7 business. Unfortunately it needs a lot of attention and a lot of time to make sure that we can get this work done. So in that area I think we are making progress in terms of training people. We are making some progress in terms of holding people accountable. We are making some progress – that can certainly improve. I think over the last few days it is very clear that we need to check up on them and improve even further on that.

FIFI PETERS: All right. I think we’ll all agree with you on that final statement there, Phillip. But thanks so much for joining the show. We’ll leave it there. Phillip Dukashe is the group chief executive for generation at Eskom.

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