Energy experts have slated Eskom’s announcement that the last unit of the Medupi power station achieved commercial operation, which marks the completion of the project.
Eskom said the last of six generation units of the Medupi power station in Lephalale attained commercial operation status and was handed over to the generation division.
“This milestone marks the completion of all building activities on the 4,764MW project, which commenced in May 2007. The planned operational life of the station is 50 years,” it said.
Eskom applauded the team at Medupi for “working tirelessly to ensure the unit is handed-over for commercial operation as planned by the end of July”.
South African energy experts were quick to point out that the project is far from completed and that it will be at least two years before Medupi can operate at capacity.
Energy analyst Chris Yelland said the initial budget for the Medupi project was R80 billion, but the cost to complete the project is now R240 billion.
Despite the tremendous amount of money spent on Medupi, the power plant is nowhere near fully operational.
Yelland said the energy availability factor (EAF) for Medupi in the first seven months of the year was 63%. A new power plant should have an EAF of between 85% and 90%.
“Medupi, as it stands now, is delivering 25% less electricity into the grid than what it was designed to do,” he said.
There are a few reasons for the poor performance, including design defects that have to be fixed to improve the EAF.
“The reality is that Medupi is probably never going to achieve the design objectives of 90% energy availability factor,” Yelland said.
Another problem is that Medupi is not meeting minimum environmental standards and is currently a big polluter.
To become more environmentally friendly, sulphur dioxide (SO2) scrubbers have to be installed at the power station.
These SO2 scrubbers take out some of the air pollutants, which typically escape via chimneys at power stations.
This equipment has not even been ordered, and it will not be completed before 2030. It is a significant part of the project and comes at a cost of around R45 billion.
“I find it disturbing when the impression is given that the Medupi project is complete. It is not complete,” said Yelland.
Energy expert Ted Blom expressed similar concerns to Yelland, saying it will take at least another two years to fix design problems with the first five units which were commissioned.
He also highlighted that Medupi is currently one of the dirtiest power stations in the world because SO2 scrubbers have not been installed.
“Eskom is blowing its own trumpeter, but the fact is that they are only telling you half the truth,” said Blom.
Commenting on the cost of the Medupi project, Blom said the initial quote for the full Medupi project was R34 billion.
However, after the ANC and Chancellor House got involved, the project cost ballooned to R80 billion.
Corruption and mismanagement caused further escalations, and the cost to completion is currently R240 billion.
Blom, however, estimated that costs will further increase and that the Medupi project will ultimately cost R300 billion.
“I don’t know where Eskom will find the money, but a lot more will have to be spent to complete the project,” he said.
Eskom CEO Andre de Ruyter blamed the power utility’s decision to manage all the contractors on site for the cost overruns and delays in completing the Medupi project.
“These mega-projects are notoriously difficult to execute well. They have a large number of contractors on site, and to manage the contractual accountabilities and responsibilities if you are not professionally equipped to do so is to invite an enormous amount of risk onto the owner of the project,” he said.
“That is exactly what Eskom did, and the consequences of these multiple interfaces and the associated interface risk has manifested itself in contractual delays and cost overruns.”