4 simple graphs which show how Eskom has fallen apart

Eskom recently unveiled its latest financial reports, which showed that the state-owned enterprise earned a net profit after tax of R3.6 billion during its past financial year.

Eskom further stated it paid its top executives a total of R49.2 million in the 2015 financial year.

The significant profit and high executive pay may be interpreted by some as showing a healthy company. However, this is not the case.

Eskom is failing to provide South Africa with enough electricity to support strong economic growth, and load shedding has become part of everyday life in the country.

Below are four simple graphs which show the problems which Eskom and South Africa face when it comes to electricity.

Peak demand on the Eskom system is going down, which slows down the economy

With a growing economy, one would expect the peak demand of electricity to increase. However, because Eskom cannot produce enough electricity, South Africa’s peak demand is declining. This has a negative effect on many sectors of the economy, including manufacturing.

Peak electricity demand
Peak electricity demand

Eskom’s cost of electricity has more than doubled over the last five years, which increases the cost to consumers and businesses

Eskom’s cost of electricity (Electricity-related costs divided by total electricity sales in GWh multiplied by 1,000) has more than doubled over the last five years. It has also missed its target cost by a big margin (target price = 532.63R/MWh, actual price = 610.43R/MWh).

Eskom's cost of electricity
Eskom’s cost of electricity

The power sent out by Eskom is declining, despite new power station projects

Eskom has known for over a decade that it was running out of capacity, but it is unable to effectively resolve the problem. This lack of generation capacity is seriously hurting the country.

Power sent out by Eskom stations
Power sent out by Eskom stations

Normal unplanned capability loss factor

Eskom’s normal unplanned capability loss factor – which measures lost energy due to unplanned energy losses resulting from equipment failures and other plant conditions – has risen significantly over the last few years. Unplanned capability losses are to blame for a lot of the load shedding which occurs.

Unplanned capability loss factor
Unplanned capability loss factor

More on Eskom

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4 simple graphs which show how Eskom has fallen apart