It will cost Eskom around R33 billion more and take another four years to complete its two newest power stations — Kusile and Medupi.
That was revealed in the utility’s latest update to Parliament’s Standing Committee on Public Accounts (Scopa).
Construction of the power stations began in 2007, and both were initially supposed to be completed by 2014.
But with Eskom’s latest timelines, only one of the power stations will be ready a decade later than originally planned.
Eskom said it was planning to reach full project completion at Medupi, which is located near Lephalale in Limpopo, in November 2023.
However, the return to service of Medupi Unit 4, which suffered an explosion just over a week after it reached commercial operation, is now only slated for September 2024.
That means Medupi will only have five operational generating units by its supposed project completion date.
It estimated the remaining investment cost for this power plant would be R18.95 billion, adding to the R126.05 billion Eskom claims to have spent on the plant as of August 2022.
Should Eskom stick to this budget, the total cost will be R145 billion, R10 billion more than Eskom said it would cost in August 2021.
That is R65 billion more than its original budget of R80 billion.
Kusile, near Emalahleni in Mpumalanga, has been even more expensive and is now only set for completion by May 2026, instead of 2025 as previously planned. That is barring any further delays.
It currently has four units operational, the last of which reached commercial operation at the end of May 2022.
The remaining two are only set to come online in December 2023 and May 2024, respectively.
As of August 2022, Eskom had already spent R147.4 billion on this plant. It is set to invest another R14 billion in Kusile, bringing its total budgeted cost to R161.4 billion.
Combined, Medupi and Kusile will cost Eskom around R146.4 billion more than initially budgeted.
But the amounts Eskom have used in its presentation to Scopa exclude capitalised interest during construction and expenditure on flue gas desulphurisation technology.
According to energy expert Chris Yelland, the combined cost overruns at both plants had already reached R300 billion by 2019.
That amount is likely to have grown substantially over the past three years.
Medupi and Kusile design flaw modifications helping
The big reason for the excessive costs is severely flawed designs that have required, and will require, major reworks of all the generating units at Kusile and Medupi.
These issues have resulted in both plants having much lower energy availability factors (EAF) than anticipated, meaning they have struggled to come anywhere near their nameplate capacities of 4,800MW each.
In an attempt to rectify this, Eskom had to embark on several costly refurbishment projects, including:
- Eleven modifications to each mill for each unit
- Redirecting the flue gas inlet to the bag filter, and equipment changes to the pulsing systems for the pulse jet fabric filter
- Addition of internal erosion protection and modification to the pin rack driving the rotation of the gas-air heaters
- Implementing erosion protection in the various hot air ducts.
Fortunately, Engineering News recently reported the modifications have resulted in a significant performance improvement, at least at Medupi.
Its EAF increased from 46% in May 2020 to 73% by May 2022. Excluding the out-of-service Unit 4, the actual EAF would have been 82% by April 2022.
Ongoing work at Kusile is also expected to improve overall reliability and reduce the likelihood of trips.
So far, the modifications have resulted in Kusile Unit 1’s average load losses of 171MW in three months being reduced to 24MW in seven months.