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Eskom to burn more coal as SA state power programme lags

Eskom expects to generate 2% more energy from coal for the financial year 2023.
Image: Bloomberg

South African power utility Eskom will burn more coal than it planned over the next year amid delays to a government program to procure electricity from private producers.

State-owned Eskom expects to generate 2% more energy from coal for the financial year 2023, the company said in a public hearing on Tuesday. There is a “significant change” in the electricity supply from private producers “due mainly to delays in commercial operating dates,” it said.

Read: What will happen if Eskom gets the tariff increase it is asking for?

South Africa is struggling to solve a power crisis caused by Eskom’s aging coal-burning generation fleet, which is prone to breakdowns that result in electricity outages. The government’s plans to address the problem by adding supply from private producers has been prone to delays including court challenges. The utility will also rely more on turbines that run on diesel fuel to help meet demand over at least the next three years, according to the presentation.

Even South Africa’s move to encourage smaller private-energy projects by lifting the license requirement for up to 100 megawatts of capacity will need time to take effect, Eskom said.

Read: Eskom to adjust assumptions underlying its 20.5% hike bid

“It is expected that it would not have an impact in FY2023 but rather filter through at a later date,” the utility said.

© 2022 Bloomberg

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