Eskom’s poor performance under André de Ruyter

The latest Eskom performance data is a blow to André de Ruyter and his performance as chief executive at the power utility.

On Friday, Eskom announced that load-shedding has remained suspended for 72 consecutive days due to sustained generation performance.

The last time South Africa experienced such an extended suspension of load-shedding was between 5 December 2021 and 2 February 2022.

Eskom said its Generation Operational Recovery Plan, initiated in March 2023, continued to deliver the improved reliability and availability of the generation fleet.

Between 1 April 2024 and 30 May 2024, the energy availability factor (EAF) increased to 61.0% — an 8.3% improvement from last year.

“The EAF improvement is primarily due to a drop in the unplanned outages of the generation units, which averaged at 12,500 MW in the month of May 2024,” Eskom said.

Eskom explained that it used far less diesel to run open-cycle gas turbines (OCGTs) than in the past two years.

“From 1 April 2024 to 30 May 2024, Eskom spent R1.52 billion on OCGTs. This is about 79% less than from 1 April 2023 to 30 May 2023,” it said.

The OCGT load factor for 1 May to 30 May 2024 continues to be much less at 2.18% compared to last year’s figure of 28.05% over the same period.

Eskom’s improved performance is so significant that experts are predicting that load-shedding may end sooner than expected.

BDO partner and renewable energy expert Nato Oosthuizen said increased private sector capacity and Eskom’s improvement bode well for the end of load-shedding.

Oosthuizen said the latest data shows concrete changes at Eskom to improve its performance in 2024.

Eskom has fixed some of the problems at its biggest plants. Unit breakdowns have been reduced by 9%, and Eskom is spending much less on diesel.

Management changes and an aggressive maintenance-led recovery strategy have greatly improved the performance of Eskom’s coal-fired fleet.

The utility has achieved a 65% Energy Availability Factor (EAF), an essential performance metric for Eskom.

André de Ruyter’s comments about Eskom’s performance

Mteto Nyati, Eskom chairman

When De Ruyter was questioned about Eskom’s improved performance and uninterpreted power supply, he did not credit the new board or management team.

Instead, he took credit for the improved maintenance and said the only reason load-shedding ended was that Eskom was burning billions in diesel.

He said maintaining an Eskom generation unit requires around 18 months of planning, including budgeting and contractor identification.

“Jan and I put in place most of the outages which are currently delivered and contributing to the somewhat improved results we are seeing from the coal fleet,” he said.

“If the lights are on, well done. However, they are on because we are pouring money into diesel at a rate of knots.”

Eskom chairman Mteto Nyati said this was nonsense and that De Ruyter cannot claim that his work is behind the lower load-shedding.

Nyati said Eskom’s new plan was only approved in March 2023, when De Ruyter had already left the power utility.

The plan focused on accelerating and executing planned maintenance. However, it differed from the planned maintenance under De Ruyter as it used equipment manufacturers (OEMs).

“When we take a plant down, we work with people with deep expertise about the equipment used at that plant,” he said.

Previously, maintenance was done by people with limited or no understanding of the equipment at the plants.

Eskom’s new Generation Operational Recovery Plan worked, and the generation units returning to service were far more reliable than before.

Nyati also dismissed De Ruyter’s claim that Eskom is unfixable and will never be restored to its former glory. He said nothing is unfixable.

“People are fixing Eskom. I heard people saying that Eskom cannot be fixed. There is no such a thing,” Nyati said.

“People who do not think something can be done should not stand in the way of others doing that job.”

Andre de Ruyter’s performance

Former Eskom CEO André de Ruyter with President Cyril Ramaphosa during a guided tour of Tutuka power station in 2022. Public enterprises minister Pravin Gordhan and energy minister Gwede Mantashe are standing behind them.

De Ruyter and Nyati explained that it takes between 12 and 18 months for a new maintenance plan to show results.

This is why De Ruyter promised South Africans that load-shedding would be significantly reduced from September 2021.

He asked South Africans to grin and bear load-shedding for 18 months while they undertook extensive maintenance to improve the reliability of their power plants.

When the time of reckoning arrived in September 2021, Eskom failed miserably. Load-shedding did not improve as promised. It got much worse.

2022 and 2023 were the worst years for load-shedding on record. It was clear that De Ruyter’s plan did not work.

It raises the question of whether it was possible to fix Eskom or whether De Ruyter was right that it was unfixable.

Daily Investor calculated the average EAF from January to May for each year from 2020 to 2024. We then calculated how it changed from year to year.

It revealed that Eskom’s EAF rapidly declined during De Ruyter’s tenure as chief executive. There was not one year where it increased.

Using a twelve-month lead time and the results after these twelve months revealed that De Ruyter failed to improve Eskom’s performance.

After De Ruyter left and Calib Cassim served as the new chief executive, the average EAF improved from 52.6% to 54%. This was the first improvement in five years.

It showed that it is possible to improve Eskom’s performance through a proper maintenance plan and good execution.

Therefore, it is understandable that De Ruyter said the high levels of load-shedding during his time at the power utility would forever be a black mark against his name.

The chart below shows the average EAF change with a twelve-month lead time over the last four years.

This article was first published by Daily Investor and is republished with permission.