Eskom expects R15-billion loss

Eskom is set to report a R15 billion loss in the 2024 financial year. However, it is on track to be profitable by next year.

Rob Rose, who writes for the Financial Times, cited Eskom CEO Dan Marokane, who spoke to the publication about their performance.

According to Marokane, Eskom’s loss is mainly due to its R33 billion diesel bill, which was used to run open-cycle gas turbines (OCGTs).

In March 2023, Eskom launched a comprehensive maintenance plan that targets its worst-performing power stations.

The management team devised a plan to maintain this good performance while rapidly improving the six plants whose performance was below par.

This resulted in the utility conducting intensive maintenance at the six poorly performing plants to improve the reliability of their units.

During this period, Eskom extensively used OCGTs to limit the intensity and frequency of load-shedding. However, it came at a cost.

Eskom’s diesel costs reached R33 billion, which was the main reason for its extensive financial loss in the 2024 financial year.

However, it was still far less than the R23.9 billion loss in the 2023 financial year. Good news is also on the horizon.

Marokane told Rose that the load-shedding reprieve would contribute to revenue and may result in Eskom turning a profit in the 2025 financial year.

On Friday, Eskom announced that it had achieved 100 consecutive days without load-shedding, which started on 26 March 2024.

The last time South Africa experienced such a prolonged suspension was nearly four years ago, between 08 September 2020 and 11 December 2020.

The power utility’s energy availability factor increased to 61.5% between 1 April 2024 and 4 July 2024, a 6.94 percentage point improvement compared to the same period last year.

These improvements helped Eskom to suspend load-shedding for over three months, which is good news for the country’s economy.

The load-shedding reprieve was achieved without having to burn more diesel to run open-cycle gas turbines (OCGTs).

Eskom spent R3.24 billion on OCGTs between 1 April and 4 July 2024. This is far less than the R9.96 billion spent last year over the same period.

The lower diesel bill and meeting electricity demand bodes well for the power utility, which has been making losses for years.

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

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Eskom expects R15-billion loss