{"id":22623,"date":"2022-10-04T12:05:36","date_gmt":"2022-10-04T10:05:36","guid":{"rendered":"https:\/\/amabhungane.org\/?p=22623"},"modified":"2024-09-19T14:09:07","modified_gmt":"2024-09-19T14:09:07","slug":"the-collapse-of-old-king-coal-part-2-how-unrealistic-targets-created-an-energy-crisis","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/the-collapse-of-old-king-coal-part-2-how-unrealistic-targets-created-an-energy-crisis\/","title":{"rendered":"The collapse of old king coal part 2: how unrealistic targets created an energy crisis"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">It is said that history repeats itself \u2013 first as tragedy, second as farce.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On Friday, public enterprises minister Pravin Gordhan announced the new board of Eskom, and issued it with a clear instruction: get the availability of Eskom\u2019s power plants back up to 75%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The energy availability factor (EAF) is the percent of time a power plant is available to produce electricity. Both breakdowns and maintenance have reduced the current EAF to 58%, resulting in a record-breaking streak of loadshedding in September.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gordhan\u2019s 75% target is not new \u2013 it is the number contained in government\u2019s shareholder compact with Eskom and the number that underpins our current outdated energy plan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIf you look at it today, the actual performance is below 60%. Below 60% is just not good enough,\u201d Gordhan said on Friday. \u201cAnd so the board has to ask the question: the journey from 60% to beyond 75%, what does that involve? What extraordinary things need to be done?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the 75% target is part of the reason that we have an energy crisis today.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The source of the current crisis is the steady decline of Eskom\u2019s once mighty coal fleet. Forced to keep running without proper maintenance, the coal-fired stations are now, on average, only available to produce electricity 55% of the time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2018, Eskom told government that it could get the EAF back up to 75%&nbsp;by 2023.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI think privately many engineers in Eskom were shaking their heads at this,\u201d Eskom\u2019s new chief executive Andr\u00e9 De Ruyter told us in July: \u201cThis was the answer that government wanted, and therefore that was the answer that government got.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even as the coal fleet collapsed and Eskom sounded the alarm that the lofty targets may not be met, government clung to the belief that Eskom could restore its power plants to 75% availability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The result is that the country now has a 6GW shortfall \u2013 a scenario that was not just predictable but predicted by people inside and outside Eskom.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But instead of learning from past mistakes, government seems determined to repeat them. Asked, on Friday, if the 75% EAF target was still realistic or whether it was being pursued for political reasons, Gordhan said:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThis is not about any political instruction, this is about what the country needs. And if the country needs [75%] &#8230; and if experts tell me and others that it is possible to get there, then every effort must be made in an honest endeavour to reach as close to 75% &#8230; as is possible.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is part 2 of amaBhungane\u2019s series on the collapse of the Eskom coal fleet: a story about how we got it wrong, how we ignored what was happening at coal power stations, clung to unrealistic projections, and walked into an energy crisis of our own making.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Catch up on <a href=\"https:\/\/amabhungane.org\/2022\/09\/27\/the-collapse-of-old-king-coal-part-1\/\" target=\"_blank\" rel=\"noopener\">part 1: The collapse of old king coal<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Crystal ball<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Back in October 2016, Eskom\u2019s energy planning office had been asked to make its annual prediction about where the Energy Availability Factor (EAF) would go over the next five years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Medium-Term System Adequacy Outlook is supposed to act as an early warning system, identifying any risks to electricity supply that could emerge in the next five years so that adequate plans can be made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 2016 report delivered three scenarios: two were based on aspirational targets set by Eskom and government and predicted the EAF would rebound to 80% and 78% respectively. Only one \u2013 the least optimistic at 71% by 2021 \u2013 was based on Eskom\u2019s own statistical modelling.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But when the next system outlook report was published in October 2017, it only contained one scenario: it confidently predicted the generation fleet would \u201c[recover] to 80% as early as 2020\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A memo to Eskom\u2019s board indicates that the optimistic 80% EAF projection had come from Eskom\u2019s generation division, under the leadership of Matshela Koko, and was \u201cbased on Eskom Shareholder compact [with government] and Eskom Corporate Plan target\u201d, and not on Eskom\u2019s own modelling.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This was a risk: these system outlook reports are supposed to offer a sober assessment, so that plans could be made to cater for the worst-case scenario.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eskom was now only catering for one possibility: restoring the Eskom fleet to its former glory and an EAF of 80%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Eskom culture<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Koko, who resigned from Eskom in February 2018, still believes that this target was realistic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe were going to achieve it, our trend was going there,\u201d he said when we spoke to him recently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asked whether it was reckless for Eskom to plan for the future based only on aspirational projections, he said: \u201cWhat is a projection? Your projection is your target. That&#8217;s the Eskom management culture &#8230; This is what we aspire [to] &#8230; and it becomes our target, and you plan for it and you achieve it.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But Eskom has not achieved it. Instead of an 80% EAF by 2020, as the 2017 system outlook had predicted, the Eskom fleet achieved an EAF of 65% in 2020, leaving a gaping role in the country\u2019s electricity supply.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI think &#8230; there&#8217;s certainly a culture [in Eskom],\u201d Brad Ross-Jones, the chief physicist in Eskom\u2019 generation division, told us in December last year, \u201c\u2013 and I&#8217;m sure it&#8217;s in all businesses \u2013 that you have managers who need to drive performance, they need to improve&#8230; they&#8217;re saying \u2018we can turn this around, we will do this\u2019.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAnd maybe sometimes we confuse target-setting to drive performance with planning, and sometimes you get into trouble if you set aspirational targets because you want to [inspire] people to get them to perform better&#8230; but then you still need to plan on what&#8217;s more realistic.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By October 2018, with Eskom under new management, the energy planning office was being more cautious: With the current EAF of 73% the system was \u201cadequate\u201d, the 2018 system outlook report concluded, but if the EAF dropped to 71% \u2013 a realistic possibility \u2013 the country would be at risk of loadshedding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By October 2019, the outlook was even more sobering: the EAF was now at 68% and the system could face a 5GW shortfall by 2022 if that number continued to decline, a draft of the 2019 system outlook report warned.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This was an astonishing about turn: in two years, Eskom had gone from predicting an 8GW surplus by 2022 to a 5GW shortfall. Instead of an 80% EAF, the energy planning office now considered 74% to be a best-case scenario, but warned that we could be staring down the barrel of a 64% EAF by 2022, or worse.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cInsufficient plant maintenance due to either funding constraints or the unavailability of space to do maintenance would cause a further deterioration in plant performance,\u201d it warned.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The number government wanted<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This should have set off alarm bells at the department of mineral resources and energy (DMRE), which is responsible for the country\u2019s energy planning. It didn\u2019t.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead, that same month, energy minister Gwede Mantashe signed the long-delayed 2019 Integrated Resource Plan (IRP), which would act as the country\u2019s energy roadmap and guide energy planning until 2030.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2018, Eskom had offered DMRE two possible scenarios: a more ambitious trajectory that saw the EAF recovering to 80%, and a more modest one at 75%. The DMRE sensibly chose the latter.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But by October 2019, even that was looking increasingly ambitious. And whereas 75% had once been a conservative estimate, it was now Eskom\u2019s best-case scenario.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2022\/10\/GRAPHIC_the-gaping-hole.png\" alt=\"\" class=\"wp-image-16727\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">\u201cTo some extent, there had previously been a reluctance on the part of Eskom executives to speak truth to power and with the 75% EAF assumption, I think privately many engineers in Eskom were shaking their heads at this,\u201d De Ruyter told us in July, adding, \u201cBut this was the answer that government wanted, and therefore that was the answer that government got.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was not just the DMRE that was guilty of blind optimism. In November 2019, the department of public enterprises under Gordhan, published an even more ambitious roadmap for Eskom\u2019s recovery that envisioned the EAF rising back up to 77% within 18 months.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Planning for half the crisis<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The DMRE was, in fact, acutely aware that its energy plan for the country hinged on what EAF number Eskom could achieve: \u201cThe current and future performance of these Eskom plants is critical for security of supply and heavily influences the capacity planned &#8230; under the IRP,\u201d it wrote.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even if the rosy assumption of 75% materialised, the system would still face a 2 \u2013 3GW shortfall over the next three years: \u201c[D]ue to the low EAF of Eskom\u2019s generation plants and the early shutdown of non-performing units &#8230; there is an immediate risk of huge power shortages,\u201d the IRP warned.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2022\/10\/GRAPHIC_Planning-for-half-the-crisis_for-copubs.png\" alt=\"\" class=\"wp-image-16718\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">But the IRP was banking on this crisis being short-lived: as the EAF recovered to 75% and new capacity was added to the grid, the 3GW shortfall would, in theory, disappear.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But Eskom had been over-promising and under-delivering on the EAF for years \u2013 with each system outlook report the projections dropped again. And instead of recovering, the coal fleet \u2013 which still made up the vast majority of our generating capacity \u2013 continued to decline.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As soon as the 2019 IRP was gazetted, alarm bells sounded. Government\u2019s Council for Scientific and Industrial Research (CSIR), which had been actively involved in developing the plan, warned that it was \u201cvery likely\u201d that Eskom would not meet the 75% EAF target.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThis is a crisis,\u201d a January 2020 CSIR stated bluntly. The CSIR\u2019s models showed that using a more realistic EAF forecast of 65% could lead to recurring stage 6 until 2025.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The DMRE\u2019s Independent Power Producer office would issue a tender to procure 2GW of emergency power to plug the already identified short-term gap. The majority of the contracts would be awarded to three gas-fired Karpowership projects, but would stall amidst corruption claims, environmental risks and exorbitant natural gas prices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As for the much bigger problem posed by the failing coal fleet, the DMRE failed to act.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>An obstructive ideology? <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We asked energy minister Gwede Mantashe why he had not done more when it became apparent that Eskom\u2019s projections about the coal fleet would not materialise.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The DMRE provided a written response on his behalf where it repeatedly shifted the blame to Eskom for providing inaccurate EAF projections: \u201cThe Department relied on data provided by Eskom&#8230; The Department doesn\u2019t make any assumptions on EAF except placing reliance on Eskom provided information.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was \u2013 and is \u2013 the DMRE\u2019s job to ensure that the country has adequate energy. For this reason, the Integrated Resource Plan is meant to be updated every two years and ministerial determinations issued which give the green light for new capacity to be procured.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IRP even made provision for this, saying that if the EAF continued to decline, the minister had the option of \u201caccelerating\u201d the rollout of the renewables, coal, nuclear and gas that were planned over the next decade.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But under Mantashe, the department\u2019s statist ideology has resisted a greater role for private sector power producers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take for example Mantashe\u2019s reluctance to raise the threshold for embedded generation to 100MW, which would allow companies to produce power for their own consumption. Mantashe eventually agreed but only with Ramaphosa \u201ctwisting my arm\u201d, he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mantashe would give the department the green light to procure new capacity in September 2020, but only what was already planned in the IRP.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meridian Economics, an independent energy research group, published a report earlier this year showing how the current energy crisis could have largely been avoided if the Renewable Energy Independent Power Producer (REIPP) programme, which stalled in 2016, had been allowed to continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c[T]he results are startling \u2013 an additional [5GW] of wind and solar capacity &#8230; would have allowed Eskom to eliminate 96.5% of load shedding in 2021,\u201d the report concluded.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The DMRE would eventually restart the REIPP programme, issuing a tender for 1.9GW of wind and solar in 2021 and 2.6GW in 2022 in line with the now badly-outdated IRP.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We asked Mantashe, with the benefit of hindsight, what he would have done differently over the past four years to tackle the energy crisis: \u201cEnsure that IRP 2019 is strictly implemented,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He added, in what appeared to be a thinly veiled criticism of the department of environment which denied Karpowership a permit to operate, that he would also ensure that \u201cprocurement is not delayed by other organs of State and ensure everyone is working towards resolving the same problem\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>New management<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By 2020, Eskom was under new management. And with De Ruyter, an experienced private sector leader, as the new chief executive, there was renewed optimism that Eskom could be turned around, even if it meant sacrificing the EAF in the short-term.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2022\/10\/GRAPHIC_the-zero-sum-game.png\" alt=\"\" class=\"wp-image-16726\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\"><br>As Brad Ross-Jones, Eskom\u2019s chief physicist, explained: \u201c[A]s soon as there was any hint of loadshedding &#8230; there&#8217;s a phone call [to say] \u2018do more\u2019. \u201cAnd what changed in 2020 &#8230; was Andr\u00e9 came in and said, \u2018Listen, we can&#8217;t do this anymore. We have to take more risk on the loadshedding to be able to do more of the reliability or philosophy maintenance.\u2019\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt&#8217;s quite a battle to force people to speak up and to do so without fear of repercussions,\u201d De Ruyter told us when we interviewed him in July, recalling that when he first arrived at Eskom the system operator \u2013 the unit tasked with maintaining the stability of the grid \u2013 was nervous to loadshed without the CEO\u2019s permission.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cYou&#8217;ve got to let the technocrats make the technical decisions. I think that&#8217;s what happens when you expect technocrats to deliver politically expedient decisions, you don\u2019t get technically sustainable solutions.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Reliability Maintenance Recovery Programme, announced in early 2020, would tackle the backlog of proactive maintenance that is required for a coal-fired power station to reach its full 50-year lifespan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI believe Eskom needs to be bold,\u201d chief operations officer Jan Oberholzer told <a href=\"https:\/\/www.engineeringnews.co.za\/article\/eskom-mulls-new-maintenance-strategy-that-would-leave-5-000-mw-gap-for-up-to-two-years-2020-01-06\/rep_id:4136\" target=\"_blank\" rel=\"noopener\">Engineering News<\/a> at the time. \u201cIf it\u2019s time for a &#8230; general overhaul, or a midlife refurbishment, or routine maintenance we take the unit off and we maintain it properly.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This was how Eskom had treated the Koeberg nuclear plant. \u201cWe need to show the same level of respect to the coal units,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The program would take at least 18 months to show results, while taking more units down for maintenance would mean accepting a lower EAF and an increased risk of loadshedding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In December 2020, planned maintenance hit a five-year high of 18% while loadshedding broke 2015\u2019s record, hitting 859 hours for the year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The bottom line<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sticking to a maintenance regime sounds easy, until you have had to obsess about Eskom\u2019s bottom line. A preliminary inspection of a single unit of a power station costs in the region of R15-million, according to Eskom 2018 capex budget; a general outage on a single unit: R300-million.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tutuka power station has six units, and when a maintenance cycle finishes with the last unit, it starts again \u2013 an unrelenting drain on Eskom\u2019s dwindling budget.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2022\/10\/GRAPHIC_the-budget-bites_for-copubs.png\" alt=\"\" class=\"wp-image-16720\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">But measuring maintenance through what is called the Planned Capacity Loss Factor (PCLF) only indicates how much time a unit of a power station was offline and not the quality of the maintenance: a unit that is offline for 10 days and gets minimal work done will have the same PCLF as a unit that gets through its whole work order in 10 days.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As Eskom\u2019s budget woes bit harder, the generation division could sometimes do little more than the bare minimum: \u201c[T]he reality is that to plan a big outage &#8230; when you go in and do intrusive work &#8230; the planning window up to that is 24 months,\u201d Paula Goatley, who heads Eskom\u2019s Reliability Maintenance Programme, told us in December last year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If a station gets to T minus six months without the money being in Eskom\u2019s bank account, a logistical equivalent of all hell breaks loose.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe must do the bare minimum work otherwise you cannot run the unit because we have very stringent safety regulations,\u201d Goatley explained. \u201cThen we have to go back and say, \u2018well, power station X, I gave you all the money to do all the work but I need to actually grab some back to give to power station Y to do the bare minimum so I can keep them on the grid,\u2019\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For Goatley, these unavoidable trade-offs are hard to stomach: \u201c[Y]ou are forever playing this balancing act &#8230; because of the funding dilemma and because of the safety criteria &#8230; you might be forced to take the unit off knowing full well that you&#8217;re not 100% ready.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWhat happens then? Often we do the absolute minimum,\u201d Logan Reddy, who is charge of plant long-term planning at Eskom, told us. \u201cIf you&#8217;re not ready for that outage, you have to shut it down and do that absolute minimum to keep it compliant.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Philosophy meets reality<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In October 2021, Oberholzer reported that the Reliability Maintenance programme was making progress but that it would take another year to bear fruit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c[I]f you skip one year of [reliability] maintenance &#8230; there&#8217;s a perception that you can catch it up in a year. That perception is not true,\u201d Goatley told us two months later. \u201cIt can take you anything up to three years to catch up on what you have missed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c[Also] there&#8217;s a difference between &#8230; proactive maintenance \u2013 which is properly planned \u2013 and corrective maintenance, which means it&#8217;s caught you and the price [can be] double &#8230; if not even more &#8230; because now you&#8217;re playing catch up and you&#8217;re at the mercy of the supplier.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A significant complicating factor, which we do not deal with in this story, is Eskom\u2019s long-running battle to secure cost-reflective tariffs from the energy regulator.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u201c[E]ffectively &#8230; we never got the tariffs that we told the country or told the regulator that we needed,\u201d Reddy told us in <a href=\"https:\/\/amabhungane.org\/stories\/220928-the-collapse-of-old-king-coal\/\">part 1: The collapse of old king coal<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">By 2021, Eskom not only needed money, it needed breathing space.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since his appointment in 2020, De Ruyter had been appealing to government \u2013 and specifically to the DMRE \u2013 to secure an additional electricity from independent power producers. This would allow Eskom to take a unit offline and do in-depth maintenance without the risk of the unit being called back at short notice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But by November 2021, the country had racked up a new record of 1 136 hours of loadshedding and the system was sometimes too constrained for more than the bare minimum.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Speaking to us a month later, Reddy put it bluntly: \u201c[W]e are running outages on now what is the statutory limits. I don&#8217;t want to be sensationalist, but &#8230; if a piece of high-pressure pipework fails, you quite literally will kill someone that&#8217;s anywhere within 30 [to] 40 metres of that failure.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eskom, Reddy explained, will take a unit offline when the risk of this kind of failure becomes acute. But this approach leaves little room for reliability maintenance that will see the EAF improve.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The example Reddy gave was driving with your tyres on the legal limit of 1mm tread depth: \u201cYou don&#8217;t have enough time and money to &#8230; go and put [on] brand new tyres. So, you just go replace it with one that&#8217;s maybe 2mm &#8230; You&#8217;re not driving reliability anymore. You&#8217;re not putting on the brand-new tyres \u2013 which is optimal performance to drive through all the conditions&#8230;\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly at Eskom, \u201cyou are just keeping yourself legal from an engineering perspective\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eskom\u2019s new leadership had initially predicted that increased maintenance would restore the EAF to 70% by December 2021. Instead, the EAF reached an all-time low of 58%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Have we failed?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI don&#8217;t think that [the Reliability Maintenance Programme] can be said to be a failure,\u201d De Ruyter said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cBut I do concede that it has not delivered according to the expectations that we initially had. And [one] of the reasons for that \u2013 and I&#8217;ll take accountability for this and say, \u2018I got it wrong\u2019 \u2013 is I&#8217;d anticipated that it would be far easier to deploy resources and to appoint contractors&#8230; And that took a lot longer than I&#8217;d certainly anticipated, perhaps na\u00efvely coming in from the private sector.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">De Ruyter is convinced that Eskom can no longer both comply with our public sector procurement laws and keep the lights on.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe challenge with the principle underpinning the [Public Finance Management Act] is that &#8230; you need to go and test the market &#8230; when you require a skill it&#8217;s a little bit like advertising for a surgeon to conduct open heart surgery \u2013 you put an ad in the classified saying \u2018Willing surgeons wanted to come and perform open heart surgery\u2019 and you take the lowest of three quotes.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">De Ruyter said he had \u201cnot anticipated the degree of neglect\u201d that he would find when he joined Eskom, even amongst the so-called star performers in the fleet, like Lethabo power station which currently has an EAF of 73% and looks good on paper.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Reddy offered his own explanation for Eskom\u2019s crisis: \u201cInertia\u201d, he told us. With large and complex power utilities like Eskom, \u201cyou have to control that\u201d. Once you start deviating from best practices, it becomes a mammoth task to halt the decline.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The numbers bear this out: even as planned maintenance has held steady at 10%, breakdowns have risen exponentially. Whereas 10% planned maintenance was once considered the gold standard, this is seemingly no longer enough to rein in a fleet that is racing towards decay.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2022\/10\/GRAPHIC_arresting-the-decline_for-copubs.png\" alt=\"\" class=\"wp-image-16721\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">\u201c[You\u2019re] saying \u2018how do we get to this?\u2019\u201d Reddy said. Money, system adequacy, maintenance &#8211; \u201call of these are different threads &#8230; all contributed in their own way to the deteriorated performance.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The question we should be asking, Reddy told us, is not \u2018why are we performing so badly?\u2019 but \u2018Guys, how can you actually &#8230; be performing even at this level?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Second as farce<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In August, after a visit to Tutuka power station \u2013 where breakdowns have exceeded EAF for almost three years \u2013 Ramaphosa finally broke the glass and declared an energy emergency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI think when he saw what Tutuka looked like, he understood that the Potemkin village that had been portrayed to him \u2013 a very pleasing picture was presented, you know, \u2018Sure, we can get to an EAF 75%\u2019 \u2013 but when he saw what the true state of the plant was, then I think he said \u2018okay, now we need some drastic interventions\u2019,\u201d De Ruyter told us a few days later.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Catch up on <a href=\"https:\/\/amabhungane.org\/2022\/09\/27\/the-collapse-of-old-king-coal-part-1\/\" target=\"_blank\" rel=\"noopener\">part 1: The collapse of old king coal<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Under the new plan, announced by Ramaphosa, government will procure 15GW of renewables and 3GW of gas as fast as possible, bringing forward virtually all of the capacity planned until 2030 in the IRP.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the plan also contains a second, painfully familiar strategy \u2013 \u201cimproving the performance of Eskom\u2019s existing power stations\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThis isn&#8217;t going back to the past and keeping the lights on,\u201d Gordhan said on Friday, in response to questions from sceptical journalists.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although optimistic, he sees a 75% EAF as a \u201cstretch target\u201d, designed to motivate better performance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThere&#8217;s no point in having targets that have no stretch in them. Ask any business person and they&#8217;ll tell you that you don&#8217;t set the minimum target and say \u2018produce that\u2019 to your staff &#8230; In the world I come from, you got to raise the bar but in a reasonable way.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He continued: \u201cAnd with the right kind of efforts, we are told, we can get [to 75%] over a period of time. The question is how much of time and how much damage do you want to do by not having the stretch targets in place?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another question we should be asking is whether we are about to make the same mistake again and walk even deeper into an energy crisis?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Read Part 3, coming soon.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>It is said that history repeats itself \u2013 first as tragedy, second as farce. On Friday, public enterprises minister Pravin Gordhan announced the new board of Eskom, and issued it with a clear instruction: get the availability of Eskom\u2019s power plants back up to 75%.<\/p>\n","protected":false},"author":6,"featured_media":22624,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[605,1118,1119,117,219,1120,662,1121,1122,830,488],"class_list":["post-22623","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories","tag-dmre","tag-eaf","tag-energy-availability-factor","tag-eskom","tag-gwede-mantashe","tag-integrated-resource-plan","tag-loadshedding","tag-matshela-koko","tag-medium-term-system-adequacy-outlook","tag-minister-gwede-mantashe","tag-pravin-gordhan"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/22623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=22623"}],"version-history":[{"count":2,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/22623\/revisions"}],"predecessor-version":[{"id":30079,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/22623\/revisions\/30079"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22624"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=22623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=22623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=22623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}