REPORT

Eskom review team says strong leadership key for restoration of plant performance

The Eskom Technical Review Team, appointed in March to provide an independent assessment of the performance of the State-owned utility’s power stations, says several coal plants can, with strong and empowered leadership, meet the much-vaunted energy availability factor (EAF) goal of 80%. It has acknowledged, however, that some of the older stations are unlikely to ever again be in a position to meet the target.

The 80% EAF target has eluded Eskom for several years, partly owing to the advanced age of various coal plants and partly because of insufficient maintenance. More than half of Eskom’s coal-fired power stations are over 37 years old, with the oldest being Komati at 55 years.

In fact, 2012 is the last time the target (which in the early 2000s was far higher at 90%) was met, leading many energy experts to question whether it would not be more prudent, for planning purposes, to factor in a lower, but more stable EAF assumption. The Integrated Resource Plan could then be adjusted to reflect the introduction of supply alternatives earlier than would have been the case had the plants met the 80% target.

Several energy experts have already cautioned that South Africa’s failure to procure any new capacity since the last renewables auction in 2014 is already exacerbating the country’s energy crisis, which came to the fore again during ten days of load-shedding from March 14 to 23.

During the recent National Energy Regulator of South Africa hearings into Eskom’s revenue application, the utility lowered its EAF assumption for the coming three years from 78% to between 71.5% for 2019/20, 72.5% for 2020/21 and 73.5% for 2021/22. Nevertheless, Eskom Technical Review Team member Phindile Mooketsi said during a briefing this week that its initial assessment showed that as many as nine of Eskom’s plants, 15 of which are coal plants, could be restored to meeting the 80% EAF target.

Mooketsi said four stations – Koeberg, Majuba, Matimba and Lethabo – were already at 80%, while there were five others, which she did not identify, that had the potential to meet the target in future. She said three coal plants would not be in a position to meet the target. Earlier this year, Eskom indicated that it would be closing Grootvlei, Hendrina and Komati entirely over the coming three years, where 11 of the 24 units had already been shut. Improving the performance of the remaining plants would be dependent, Mooketsi said, on appointing permanent power station managers and giving them full authority to run the plants. It would also require critical technical vacancies to be filled.

Eskom CEO Phakamani Hadebe said moves were under way to devolve decision-making from its Megawatt Park head office to the individual power stations so as to empower the power station manager to take human resources and procurement decisions. “The relinking we are talking about is designed precisely for that, where the decisions are taken by the manager of the power station and he is held accountable for them,” Hadebe explained. The utility would also seek to appoint permanent power station managers at the eight stations where the posts were currently occupied by acting power station managers. Four of the eight positions remained acting while disciplinary processes were finalised for managers who had been suspended.

Efforts were also under way to streamline and accelerate, within the Public Finance Management Act framework, procurement processes, as the slow pace of procurement had been identified as a key reasons for the lack of critical components as services. The Eskom Technical Review Team said there was an urgent need to implement a project to focus on reducing the current procurement backlog. Mooketsi added that the team had already concluded that Eskom’s procurement processes needed to be re-engineered for “agility”.

http://www.miningweekly.com/article/eskom-review-team-says-strong-leadership-key-for-restoration-of-plant-performance-2019-04-04

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