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The crisis at Kusile and Medupi continues …

Eskom is expected to announce a bottom-line loss for the year in the region of R25bn.

Eleven years after construction started on Eskom’s massive 4 800 megawatt (MW) Kusile coal-fired power station in Mpumalanga, not one of its six 800MW generator units is currently delivering power into the grid.

Construction started at Kusile in 2008, and all six generation units were planned to be in commercial service by the end of 2014. However, the sad reality is that by the end of July 2019, five years after 2014, only Unit 1 at Kusile has been handed over for commercial service.

While Units 2 and 3 have been synchronised to the grid, they are still undergoing testing and commissioning, and the units are not in commercial service yet.

Read: The other side of the messy R8bn Medupi, Kusile story

“It must be noted that only Unit 1 is in commercial operation, and Units 2 and 3 are still in the commissioning process following first synchronisation,” said Eskom deputy spokesperson Dikatso Mothae.

Major problems

But worse, major design, execution and operational problems are being experienced, and currently all three units at Kusile are down and out of service for various reasons.

A routine inspection on Unit 1 recently found some defects in various areas of the plant, which are now being repaired. The planned date for return-to-service of Unit 1 is the second week of August 2019.

On Unit 2, a failure event was experienced on the induced draft (ID) fans in the first week of July 2019 after returning the unit to service from an inspection, and some minor repairs were done. The exact cause and reinstatement plan is presently under review.

Unit 3 is shut down for coal mill inspections and maintenance in order to continue with commissioning and plant optimisation before hand-over for commercial operation can take place. The expected return-to-service for Unit 3 is end August 2019.

Spares are said to be “mostly” available, however some plant equipment is being “borrowed” from various contractors.

“This plant equipment had been destined for Unit 6, but it will be procured by Eskom and supplied by the various contractors before Unit 6 is commissioned,” the power utility says.

In plain terms, some essential spares are not available, and Unit 6 at Kusile is being stripped for certain replacement parts needed for Units 1, 2 and 3.

There are similar problems at Eskom’s Medupi power station, which has the same design, plant and contractors as Kusile, and is also under construction and running several years late.

At Medupi, Units 6, 5, 4 and 3 have been handed over for commercial service, while Unit 2 is undergoing commissioning, with Unit 1 still under construction. All units at Medupi were intended to be in commercial service by the end of 2013.

Some of the known problems at Medupi and Kusile are that the boiler height is too low for the slow-burning coal found in South Africa, which leads to a number of boiler operating problems.

The coal mills are also said to be of a type that results in inadequate fineness of the milled coal. Again, this causes problems within the boilers, as well as excessive wear, maintenance and downtime of the coal mills.

Excessive wear and tear is also being experienced on the ID fans, which draw the flue gas and ash dust from the boilers, through the fabric filter and flue gas desulphurisation plant, and up the smoke stack.

The pulsed-jet fabric filter plant, which extracts ash-dust from the flue gas, is not functioning properly. The main contractor for the ash-handling plant has gone into business rescue, closed its construction site offices, and removed all site personnel from the Medupi and Kusile sites.

The construction sites have also been plagued by legendary procurement irregularities and fraud, and the site management appears powerless in the face of inadequate skills, low productivity and union obstructionism. Indeed, unions and unionised workers are said to be effectively in control of the construction sites.

Question marks hang over Kusile on whether construction of Unit 5 and 6 should proceed, or whether Eskom should cut its losses and abandon further work on these units.

It is clear a comprehensive, independent business-case study may be required to determine the viability of proceeding.

There are significant risks that Kusile may indeed become a premature white elephant and stranded asset if the levelised cost of electricity (LCOE) from the power station makes it impossible for the plant to compete against lower-cost, cleaner and more flexible generation options in a competitive environment.

Read: No turning back now: Medupi and Kusile will be completed

The high LCOE would result from the technical problems, low energy availability factor (EAF), reduced energy output, coal supply problems, water restrictions and carbon taxes, which are likely to increase in future years.

Eskom is to announce its results on Tuesday (July 30) for the financial year ending March 31, 2019, with a bottom-line loss for the year expected to be in the region of R25 billion. This would make it the biggest company and state-owned enterprise loss by far in the history of South Africa.

But with the massive cost and time overruns at Medupi and Kusile, and the liability of owning power plants that generate expensive, dirty, coal-fired electricity with high CO2emissions, in a world transitioning to a low carbon future, this R25 billion loss may seem like peanuts when the inevitable write-down of unrealistic asset values occurs.

It has been said that Eskom is “too big to fail”. However, the Eskom ship is listing in choppy seas, leaderless and rudderless, while the band plays on, because the players have little idea of what else to do to save the situation.

Chris Yelland is investigative editor at EE Publishers.

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These 2 power plants are the real face of South Africa – nothing works and rich cronies with no knowledge running everything. Incompetent contractors abound and the unions are effectively in control.This extends to all SOE’s and virtually all government institutions, municipalities etc!!!! Viva DRC here we come!!!!

DRC here we come??? What optimism! I’m thinking Zimbabwe, Mozambique or Madagascar …

Trust me – It is a toss up between Sonalia and the DRC for the worst Sh1thole country in the world.

It requires a simple, three step process:
1) Hire for competence rather than colour and connection,
2) Apply existing rules of procurement and oversight,
3) Enforce them.

carwriter, not so simple. That is the colonial way, not the African way.

Th real answer is that SA needs an increasing power supply NOW so that new business be more productive, new factories and smelters etc can be built. The answer is that, in daylight hours, SA has one on the highest solar radiations in the world. We have millions of hectares of unproductive land. Massive PV panel farms can thus be built at short notice, who can sell to Eskom at a price that enables them to sell on at a profit. Medupi and Kusile are a disgusting monument to the incompetency and corruption so endemic to the Zuma era.

Step 1) goes against policies, so will never be allowed to be implemented.
Step 2) does not allow for crony favouritism so is not acceptable.
Step 3) means that selected hirees/contractors may be jeopardised so cannot be allowed.

ok, deduct from the loss, just 1 year’s salaries paid to eskom’s between 27000 and 30000 unnecessary cadre employees and see what is the effect on the “loss” – do the same exercise to see what the negative effect was directly due to bee – paid for bad or no work done – same with municipalities / foreign countries and stolen electricity that does not pay for electricity produced. also the delayed electricity production’s effect on dead capital waste due to uncompleted power stations not running at full capacity, while interest is paid continuously on the massive loans to build it, a real still born eskom monster.

Simple question is what has changed since the 1980’s when the Tutuka’s, Majuba’s Kendal’s etc. were built.

???

Correct.

That’s the problem.

The difference is that then such projects were completed in the face of sanctions by indigenous companies; now such projects and development in general, in the “free South Africa” has become just an excuse to create suitable conditions for looting. The aim is not to complete the project, it is to siphon the already depleted budget of the project into corrupt ANC hands

Great article. What a shambles.

It is pointless to press on without fixing the design flaws, but these were probably deliberate in the first place to facilitate more contracts that could be looted.

Seems the project manager was really low IQ. The far better way to run something like this is to build just one unit, run it and see what needs fixing before you start the next one – but no, that’s just negative thinking. Then build unit 3 and learn from the first, etc.

This way you are getting power early on, and by the time you get to unit no 12 you are expert at putting these things up.

Instead, scrapping the whole thing looks like the best option.

As Jacob would say “I did not know, I did not understand but I took a decision any way. No one can hold me accountable”

Good to say that we want alternatives but currently no renewables can meet fossil fuel and nuclear baseload demand

You might want to google that opinion before repeating it.

This sounds just like the African National Corruption finance antics … ah well we just borrow over here, cut over there, don’t fix over there, cover up over here. You know look the other way, ignore, deny, etc, …. wonder where Eskom learned its tricks ??

Eskom has a “Lake Charles” cost overrun event…

…just 2 BIG ones.

The cocktail of corruption and a poorly conceived and implementation of these two base-load energy procurement projects has resulted in a massive drain on SA’s resources all thanks to the ANC.

The Stone Age MBA doesn’t seem to be working anymore. Herding, subsistence farming, polygamy, pillaging and foraging are so yesterday …

This bizarre situation reminds of a supposed story from WW2 when everything was in short supply and profits could be made from almost anything.

So …. crates of tinned fish were being sold over and over with a little extra profit every time a deal was done. Eventually a buyer decides to see if the fish are any good and he opens a few tins, only to find that they are rotten.

He goes back to the seller and complains bitterly. “But you’re not supposed to open them! You’re supposed to sell them on and take the money!” he gets told.

I think we have the same scenario here: they will never get finished, they are simply there to supply a constant source of income to the unions and labour. Something like Parliament….

ESKOM is RSA’s biggest looser because it is run by trade unions and the ANC. Let it fall because it has been bankrupted by its rulers and see how soon the people of this country will gather itself and provide for their own electrical needs. Solar is all out there waiting to be implemented.

Boilers to low, locomotives to high – ANC and Unions hard at work

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