Eskom shutting down power plants it can’t afford to fix

Eskom has permanently shut down several power generation units at older power stations due to its inability to fix them, the Sunday Times reports.

This decision has cut the power utility’s available electrical capacity to meet demand, which may increase the risk of load-shedding going forward.

Eskom said that the old power generation units at Hendrina, Grootvlei, and Komati which have been taken offline are not included in the utility’s current generation capacity of 46,000MW, despite not being formally decommissioned.

After shutting down older power plants, Eskom said it planned to resolve the problems at its newest Medupi and Kusile power stations, which have cost the company a significant amount while producing disappointing results.

Massive debt

Despite posting a R1.3-billion profit in the six months through September 2019, Eskom anticipates a R20-billion loss for the full year.

Eskom’s debt burden rose to R454 billion, from R440 billion at the end of March 2019.

The government has allocated the failing power utility R138 billion over the next three years to enable it to keep operating. However, that might not be enough to ensure its viability.

The government also plans to split the utility into generation, distribution, and transmission units under a state holding company — a reorganization it said will make it easier to raise financing and improve efficiency.

Eskom’s precarious position has been created by years of mismanagement and corruption, a bloated wage bill, massive inefficiencies at its two new coal-fired power stations, and maintenance backlogs at other plants.

Now read: Eskom pollution highest in 20 years

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Eskom shutting down power plants it can’t afford to fix