Eskom is burning more diesel than ever to keep the lights on

Hundreds of millions spent last week, even with load shedding …
The spike in global diesel prices may focus Eskom’s efforts a little more intently. Image: Waldo Swiegers/Bloomberg

During the evening peak last week, Eskom utilised its diesel-burning open cycle gas turbines (OCGTs) for all but one of the 24 hours that made up the time of day where demand is greatest.

Public data from the utility shows that Eskom made use of its OCGTs between (at least) 4pm and 10pm every day between Tuesday and Friday (Monday was a public holiday, yet it still used these turbines between 5pm and 9pm).

Read: Load shedding crisis as Eskom breakdowns hit record levels

In addition, it called on independent power producer (IPP) operators at the Avon and Dedisa peaking power plants to operate their diesel turbines for the same 23 of 24 peak hours (the only hour neither Eskom nor the IPP OCGTs were used was at 9pm on Friday, when demand is far lower than on other weekdays).

Eskom will argue, as COO Jan Oberholzer did in March, that: “They were always intended to be used … early in the morning and late in the afternoon when there is a lot of demand on the country.”

But it is obvious that they were not intended to be used for practically every single hour of peak every single weekday.

It also used the OCGTs fairly extensively in the morning peak last week. This as Eskom implemented Stage 2 load shedding at 5pm on Tuesday and said this would continue to Monday. It reduced this to Stage 1 on Friday night at 10pm and suspended load shedding altogether at 12 midday on Saturday.

Read:
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The usage of the OCGTs last week equates to hundreds of millions of rands of diesel, but usefully its pumped storage schemes had recovered sufficiently for these to be able to supplement base load power between 6am and 8pm daily due to the poor-performing coal fleet.

On Thursday night at 6pm, the Eskom and IPP OCGTs provided 2 854 megawatts (MW) to the grid, equivalent to the total amount Eskom imports from the Cahora Bassa hydroelectric plant plus its total normal generation from the Koeberg Nuclear Power Station (where unit two remains offline until June for refuelling and maintenance).

Regulator Nersa has approved a load factor for OCGTs of 3% for 2022/23, less than half of what Eskom had originally requested (7%). This equated to approximately R3 billion in March (diesel prices are up steeply since then).

So far, the load factor for Eskom’s own OCGTs is at 15.91% for the first five weeks of its financial year. For IPPs, the load factor is not much lower than this, at 11.03%. Of course, Eskom’s financial year still has a long way to run but it is optimistic to see a situation where Eskom achieves a load factor for the OCGTs of less than 10% (roughly the figure from its last financial year).

In April, it used OCGTs (its own and those run by IPPs) to generate 327 gigawatt hours (GWh) of electricity. This is a 52% increase on the 215.9GWh in April 2021.

A scenario shared publicly in its most recent system status and outlook briefing (in January) envisaged 61 days of load shedding between April 1 and August 31. At that stage, this was the worst case which saw a maximum of Stage 2 with average unplanned availability of 13 000MW across the period.

Spike in diesel costs

In this scenario, it estimated it would use R3.4 billion in diesel at its own OCGTs as well as those run by the IPPs.

The spend is almost certain to be far worse than this for two reasons.

One, it’s had a terrible start to winter with those load factors of 15.91% (Eskom’s OCGTs) and 11.03% (IPP OCGTs).

But, more importantly, diesel prices are up 28% between January and now. Much of this is due to Russia’s invasion of Ukraine which, for a multitude of reasons, has resulted in a global shortage of diesel.

Oberholzer told the media in March that Eskom’s diesel turbines cost around R700 000 per hour to run. Since then, prices are up a further 13%, meaning those costs are now roughly R800 000 per hour.

Read:
Impact of fuel prices in SA
Eskom may run out of money for diesel, as global prices soar

Eskom said in January that “history has shown that it is not possible to use more than about R1.2 billion of diesel in a month due to the physical limitations of moving the diesel to the OCGT stations”.

But factor in that 28% price increase and the upper limit is now R1.5 billion.

What options?

The only way to decrease this spend is to switch the OCGTs to run on gas.

But Eskom has been talking about this practically since their commissioning around 15 years back. A few years ago, it implemented dual burners to allow these to run on either diesel or liquefied natural gas (LNG). That’s about as far as it has progressed.

While liquefied petroleum gas (LPG) prices are also up significantly, this is a cheaper fuel source than diesel. Oberholzer said in March Eskom would go to market “soon” to invite the supply of gas for these plants as well as the old coal-fired Komati Power Station in Mpumalanga (which it will repurpose to run on gas).

The spike in global diesel prices may focus Eskom’s efforts a little more intently.

That, and the fact that its “extreme” worst-case scenario for winter is now as much as 100 days of load shedding. That’s a big jump from 61.

Listen to Robert Maake of the Department of Mineral Resources and Energy speaking to Fifi Peters about the spike in diesel prices: 

COMMENTS   7

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This reflects the desperation of this SOE.
They can hardly make money when everything is running fine and now they are generating electricity at three times the revenue to keep up the façade !!

Of course they will get bailed out — But for how long ??????

Does the diesel for peakers attract all the usual fuel levies like RAF and roads levy?

It seems silly for Eskom users to be loaded with illogical fees that just flow from one SOE to another. In effect electricity users subsidize the RAF and SANRAL.

The same applies to all the diesel being consumed in loadshedding gennies. My gennie will not be in a road accident nor does it use the road infrastructure.

I don’t think the diesel Eskom uses for it’s OCGTs incurs the fees you mention. I can remember reading about two, three months back that AdR stated that they pay about R 12.50/L diesel, now probably around R 14 or so. Such a difference with about 10,12 years back when a set of beautician and dentist tenderpreneurs managed to score a diesel supply contract at Eskom with diesel at R 17 a L.
AdR stated 7,8 months back that power from those OCGTs comes down to about R 5/kWh, now probably more than R 6. Completely unsustainable.
Eskom has 14 OCGT units at two locations, Ankerlig, Atlantis, CT and Gourikwa near Mossel Bay. Each producing 146-150 MW each, total about 2100 MW. The IPP Avon & Dedisa Peakong Power owns I believe 7 units in total at Avon, Durban and Dedisa, Coega, PE, with a total possible output of 1006 MW.
The whole issue of high demand at these peak hrs is for a large part a virtual, an avoidable one IMHO.
During the first years of loadshedding 2007-2010 somewhere, we, the general public, households, were regularly asked to reduce usage during those peak hrs. Eskom internally called it DSM, Demand Side Management, now it has been replaced by Virtua power station, in which Eskom asks major users to reduce usage during periods of shortage. The Twitter feed of Eskom spokesperson Sikonathi Mantshantsha has more on this. @SikonathiM
We never had TOU, time of use tariffs, which have been commonly used overseas in many countries. But Eskom, read the ANC, is too afraid of a backlash to introduce those it seems for residential users. Besides implementing those for all households, it can stop BFE, Basic Free Electricity to be used during peak hrs, or reduce the value of them with 50% when used during peak hrs. Unfortunately it must make clear to even indigent households that power is never really for mahala. The real issue is residential use, not industrial. In some older houses there might be still ripple switches installed with a geyser, where munis could switch them off during power shortages. An old system from the sixties.
Let’s not even talk of houses having smart meters and dynamic tariffs, as now is common in many places. Where one can opt for fixed 24 hr rates, TOU tariffs, or dynamic price plan.

Thanks Marcan

Large Eskom direct users and certainly all medium to large councils do pay ToU. The councils have just not passed on that pricing signal to their users.

My council levies a weird tariff on our factory complex. Eye-watering peak kVA demand of R330/kVA but modest 107c/kWh for energy charges. They basically want to penalize me for over-producing solar in day-time and bend me that one damned half hour when loads were high and solar was low. Basically they are encouraging me to logical reaction : more solar and batteries so that I can limit my peak kVA and they can sell me 107c/kWh energy when it costs them 280c/kWh in peak periods from Eskom on Megaflex (when my solar is under producing)…. I told them that but still they persisted.

I often drive past the wind farms near Jeffreys Bay. It is astonishing to see only about 50% of them active during load shedding. I can only guess why they would rather burn diesel than utilise wind farm electricity generation.

The cadre does not get a cut from the wind.
They do from the diesel contracts !!!!

Not anymore under AdR.

End of comments.

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