Is a shortage of coal really the cause of loadshedding?

December 14th, 2018, Published in Articles: EE Publishers, Articles: Energize

Eskom has repeatedly said that the shortage of coal at some power stations, together with breakdowns resulting from previously deferred maintenance, has resulted in the power utility having less power generation capacity than what is needed to meet the country’s demand. To protect the system from total collapse, we have been told, the utility needs at times, to reduce the load to balance load and available generation capacity. But does the power utility really have a shortage of coal?

According to Dan Mashego, the power utility’s general manager for primary energy, the power utility has an average of 28 days of coal stockpiled across its power stations.

While it may be true that certain mines have not met their contractual agreements, it seems that Eskom does indeed have more than enough coal on-hand to keep the lights on. So why the loadshedding?

Dan Mashego

Speaking to the media at Eskom’s Coal Discussion meeting at Megawatt Park recently, Mashego  said that the power utility has an average of 28 days of coal stockpiled across its power stations, although nine power stations still have less than this.

The utility had undertaken to have 28 days worth of coal stockpiled per power station by the end of Eskom’s financial year (31 March 2019) but it had already achieved this target and was now pushing to have 37 days worth of coal on hand, he said.

Mashego said the utility signed 35 new coal-supply contacts between January and November this year which will ensure that every power station will receive all the coal it needs by 2020, but it will take about five years before the power utility’s coal situation can be said to be in a “steady state”.

However, the power utility actually has 16-million t of coal on hand – which it has already paid for – at the site of its new-build, but incomplete, Medupi Power Station which could be used at other power stations.

In response to a question from a journalist at the meeting, as to why these vast quantities of coal at Medupi were not transported to the power stations which need it – thereby avoiding loadshedding – Mashego said that this was because “Exxaro didn’t have the capacity to move the coal” and because “the situation was not dire enough at the time”. Apparently the capacity was being used to send coal to Richards Bay for export at the time.

Under delivery from coal mines

Mashego blamed the coal shortage on certain of the mines’ inability to supply their contracted amounts to the power stations. While most of the mines are supplying between 95 and 97% of their contracted tonnage, he said, the utility’s five cost-plus mines are only supplying about 55% of their contracted quantities.

According to Mashego, the coal shortages are the result of a combination of three coal mines going into business rescue; Tegeta short-delivering 8,5-million t of coal; and five cost-plus mines short-delivering because Eskom had not supplied them with the money they needed for necessary development. Instead, he added, the money was used to fund the over-budget and over-time new build projects. The reduced tonnage of coal from these mines equated to 15 days of stockholding. Eskom “had to rob Peter to pay Paul” to keep the power stations running, he said.

Road to rail

The power utility is working on a road-to-rail strategy with Transnet which should significantly reduce the amount of coal transported by road. Although Eskom is not responsible for the upkeep of the roads the trucks use (and damage), Mashego said, the power utility is aware of the inconvenience trucking coal by road causes to other road users. Furthermore, transporting coal by rail is cheaper than by road.

Stranded assets?

Regarding the financing of new coal mines and coal-fired power stations, the utility is aware, he said, that these are becoming more difficult to finance and that technological developments and changes in people’s attitudes toward coal will have an effect on the way in which Eskom generates electricity in the longer term, but denied that its existing – or new-build – power stations will become “stranded assets”.

Send your comments to energize@ee.co.za

 

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