Latest news with #EnergyAvailability
The Citizen
11-06-2025
- Business
- The Citizen
‘Sad situation': Eskom warns growing municipal debt seriously risks its sustainability
Municipal debt currently stands at R94.6 billion. Eskom has warned Parliament that growing municipal debt continues to pose a serious risk to the entity's long-term sustainability. Officials from the power utility appeared before the Standing Committee on Appropriations on Tuesday to brief MPs on the Eskom Debt Relief Amendment Bill. The bill, introduced in 2023, provides R254 billion to support Eskom's debt servicing obligations over a three-year period. One of the key conditions attached to the relief is that Eskom is not permitted to take on additional borrowing. Eskom strategic goals During the committee meeting, Eskom's Chief Financial Officer (CFO) Calib Cassim outlined several of the utility's strategic priorities, including efforts to recover and maintain a 70% Energy Availability Factor (EAF) in the long term, in order to meet South Africa's electricity needs. 'We know currently it's sitting around 57% and we really need to increase that over the remainder of the year to get this average of 66%,' Cassim said. He also highlighted the need for innovative strategies to tackle municipal arrear debt and reduce energy losses. 'One of our challenges is that how do we deal with the issue around municipalities, including metros, from a finance perspective; the importance of collecting what Eskom does supply in terms of the product that contributes towards our financial sustainability and liquidity,' he explained. ALSO READ: Eskom ready to start borrowing again Cassim added that Eskom is also focused on cost optimisation, revenue enhancement, leadership stability, and employee development. The entity's revenue rose by 16% to R264.60 billion in the third quarter of the 2024/2025 financial year. This was largely due to a 12.74% electricity tariff increase approved by the National Energy Regulator of South Africa (Nersa). Eskom also reported 'significant savings' of R16.3 billion in diesel costs. Regarding the debt relief, Cassim noted that Eskom had received R8 billion of the allocated R64 billion in the 2024/2025 financial year. 'The remaining R56 billion was drawn down by the end of March 2025,' he said. Debt securities and borrowings have since decreased to R409 billion. Eskom's municipal debt remains a serious concern While the debt relief programme has improved Eskom's cash flow, Cassim stressed that municipal debt continues to pose a substantial challenge. The debt, the Eskom CFO said, has been increasing despite interventions by the National Treasury. 'We need to arrest these arrears because if we don't do that it's going to neutral the benefit we do anticipate to receive from the overall debt relief.' In the current financial year, Eskom is set to receive R40 billion in debt relief. Rajen Naidoo, Eskom's General Manager for Finance in the distribution division, reported that municipal debt currently stands at R94.6 billion. READ MORE: R100 billion debt: only 10 municipalities honouring their accounts He attributed the persistent non-payment issue to deep-rooted structural and systemic problems within municipalities. 'Municipal debt is a key risk to Eskom business and our liquidity. 'As you know that distribution collects the money but then pays that onto transmission and generation, so the problem is not just a distribution problem but an Eskom problem on the whole,' Naidoo told the committee. He explained that many municipalities are unable to pay current bills or reduce existing debt. 'The municipalities are also plagued with high energy losses in the sense that energy is either being stolen through illegal connections, meter tampering or inaccurate billing.' Watch the meeting below: Naidoo added that a decline in electricity demand was further reducing revenue, while weak financial management practices continue to exacerbate the situation. Of the 71 municipalities enrolled in the Eskom debt relief programme, 62 have been unable to meet the necessary conditions to qualify for debt write-offs. At least R55 billion in debt could have been written off had these municipalities complied. 'We have seen a rapid growth and much faster growth in terms of municipalities defaulting.' Among the top 10 non-compliant municipalities are Mbombela (Mpumalanga), Maluti A Phofung (Free State), Govan Mbeki (Eastern Cape), Emfuleni (Gauteng), and Msunduzi (KwaZulu-Natal). Collectively, they account for R50 billion of the municipal debt. 'The sad situation we find ourselves in is that even municipalities that were approved did not even honour their current bill, some of them from month one of the programme.' Metros contributing to rising Eskom's municipal debt From March 2023 to April this year, municipal debt increased by R15 billion. Metropolitan municipalities are also showing a debt rising trend at R11 billion. The City of Tshwane and City of Johannesburg accounted for R10 billion of the total. 'Initially, we did not have an issues with metros in terms of payment. Yes, there was some debt outstanding, but they would generally pay us late and would catch up. 'But from March 2023, you can see that the debt has grown from R1.7 billion to R11.1 billion,' Naidoo explained. He said Tshwane has a five-year payment plan with Eskom. A four-year similar deal was signed with Coty of Joburg recently. NOW READ: How Eskom and National Treasury saved taxpayers more than R20bn
The South African
09-06-2025
- Business
- The South African
Eskom expects to return units to grid as South Africa braves winter cold
Eskom is expected to return at least 2 550MW capacity to the grid by evening peak on Monday as South Africa braces for severe winter conditions throughout the country this week. The power utility said it is making 'steady progress' in tapering down maintenance season with the Energy Availability Factor 'fluctuating between 61% and 64%' last week. 'While system constraints are occasionally experienced, adequate emergency reserves are in place and are being strategically deployed to support demand during the morning and evening peak periods, particularly as the country prepares for a forecasted cold spell in the coming week. 'We plan to return a total of 2550MW of generation capacity to service ahead of the evening peak [today] to further stabilise the grid,' the power utility said. Eskom revealed that Medupi Unit 4 is in the last phases of recovery following damages sustained in 2021. 'Commissioning activities are currently underway and Grid Code compliance testing is expected to resume in the coming week. The unit is anticipated to return to service within June 2025. 'Diesel usage is expected to decline further as more units return from long-term repairs and maintenance activities are reduced, increasing available generation capacity. 'The Winter Outlook… covering the period ending 31 August 2025, remains valid. It indicates that load shedding will not be necessary if unplanned outages stay below 13 000MW. If outages rise to 15 000MW, load shedding would be limited to a maximum of 21 days out of 153 days and restricted to Stage 2,' Eskom said. The power utility has encouraged communities to 'avoid illegal connections and energy theft' even as the winter period rolls in. 'These activities often lead to transformer overloads, equipment failures, and in some cases, explosions and extended outages, prompting the need for load reduction to protect the network. 'To help maintain a stable electricity supply this winter, customers are encouraged to purchase electricity only from Eskom-accredited vendors and take responsibility by regularising their electricity usage. 'Eligible households are encouraged to register for free basic electricity with their local municipalities,' Eskom said. Furthermore, customers are encouraged to use electricity sparingly throughout winter. Use the Eskom Residential Calculator to track and optimise electricity usage. The tool can be accessed HERE Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The Citizen
09-06-2025
- Climate
- The Citizen
Power system constrained but stable, despite cold front, Eskom
The cold weather is expected to force residents to use their heating appliances in abundance. Eskom says the power system remains stable and continues to demonstrate resilience despite the cold front sweeping across the country. The South African Weather Service (Saws) issued two orange and six yellow level warnings for several parts of the country, with warnings of very cold, wet and windy conditions, including snow for several parts of the country. Load shedding The cold weather is expected to force residents to use their heating appliances in abundance to keep warm, putting pressure on the electricity grid. However, Eskom spokesperson Daphne Mokwena said there are no plans for load shedding. 'While system constraints are occasionally experienced, adequate emergency reserves are in place and are being strategically deployed to support demand during the morning and evening peak periods, particularly as the country prepares for a forecasted cold spell in the coming week'. ALSO READ: Snow, disruptive rain and severe thunderstorms to sweep across country Winter outlook Mokwena said Eskom's winter Outlook, published on 5 May 2025, covering the period ending 31 August 2025, remains valid. 'It indicates that load shedding will not be necessary if unplanned outages stay below 13 000MW. If outages rise to 15 000MW, load shedding would be limited to a maximum of 21 days out of 153 days and restricted to stage 2'. 'While load shedding remains suspended and electricity demand continues to rise during the winter period, Eskom urges the public to avoid illegal connections and energy theft. These activities often lead to transformer overloads, equipment failures, and in some cases, explosions and extended outages, prompting the need for load reduction to protect the network,' Mokwena said. Maintenance Mokwena said Eskom is making steady progress as it moves beyond the peak maintenance season, with the Planned Capability Loss Factor (PCLF) having decreased from an average of 4 883MW to average of 4 035MW. 'As a result, the Energy Availability Factor (EAF) has been recovering as expected, now fluctuating between 61% and 64% since Monday. Month-to-date, the EAF stands at 60.42%, reflecting the successful return of additional generation units from planned maintenance'. Diesel usage Mokwena said the Open-Cycle Gas Turbine (OCGT) load factor decreased to 6.31% this week, compared to 12.70% in the previous week (23 to 29 May 2025). 'This decline indicates reduced reliance on diesel'. Mokwena said diesel usage is expected to decline further as more units return from long-term repairs and maintenance activities are reduced, increasing available generation capacity. NOW READ: Eskom winter outlook: Here's how many days of load shedding to expect in SA
IOL News
24-04-2025
- Business
- IOL News
ActionSA slams Eskom's R3.6 billion diesel spending in one month as 'costly cover-up' for failing grid
ActionSA demands accountability from Eskom and the Minister of Electricity, calling for honest reporting, real recovery plans, and an end to wasteful diesel spending disguised as energy progress. Image: Timothy Barnard /Independent Newspapers ActionSA has expressed concern over Eskom's R3.6 billion diesel spend in just 30 days, calling it an 'unaffordable illusion' used to mask South Africa's ongoing electricity crisis. The party says government claims of ending load shedding are misleading, with diesel-powered emergency generation simply substituting blackouts rather than solving the core issues. ActionSA Member of Parliament, Alan Beesley, said: 'South Africa hasn't ended load shedding – we've simply replaced it with an unaffordable illusion, paid for by the taxpayer.' Beesley said that between April 1 and 10, 2025, alone, Eskom burned R1.34 billion in diesel. Yet, Eskom's Energy Availability Factor (EAF), the key metric for generation performance, sits at just 56.11 percent, well below the 70 percent target set by the Minister of Electricity. This also reflects a decline from the same period last year, when the EAF was 58.96 percent. ActionSA says this proves there are fewer megawatts available now than a year ago, despite significantly higher spending. 'That is not a recovery – it is a cover-up with devastating fiscal consequences,'' Beesley warned. According to Eskom's 2024 data, diesel-fired generation via Open-Cycle Gas Turbines costs R6,579 per megawatt-hour, compared to R541 for coal and just R113 for nuclear. ActionSA argues that billions are being wasted to keep the grid afloat when those funds could have been used to restore failing coal infrastructure. If the same amount of electricity had been produced using coal, the cost would have been a fraction, closer to R300 million. Beesley added: 'Eskom is burning billions, and the people of South Africa are being burned in the process.'
