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Lockdown gave Eskom time to build capacity

7 May 2020

The national lockdown has had some positive spin offs for Eskom in that the lower demand has given the power utility the breathing space to carry out short-term opportunity maintenance at some of its facilities, and also reduced the chances of load shedding this winter.

Eskom CEO, Andre de Ruyter

Eskom CEO André de Ruyter told Parliament said the latter would depend on whether the lockdown was lifted gradually or with a “big bang” approach. In addition, he said short-term maintenance and the procurement of additional capacity meant the 31 days of load shedding Eskom expected for the next quarter was now reduced to three.

However, the lockdown-related reduction in electricity demand meant the power utility would lose about R2.5bn in cash generated for April, with the full financial impact of lockdown yet to be assessed.

But the good news is Eskom was able to build up buffer capacity amounting to more than 10% of daily consumption.

“We believe that with these interventions that the likelihood of load shedding for the coming winter has been significantly reduced from our previous forecast,” De Ruyter said.

Three divisions

The boards and managing directors were appointed for the generation, transmission, and distribution divisions that Eskom was being split into at no additional cost.

“So, we are on track to enable, in the fullness of time, the legal separation of the three divisions of Eskom in accordance with the roadmap for a restructured electricity industry as published by the Department of Public Enterprises,” he said.

However, De Ruyter said spreading Eskom’s massive R450bn debt between each division was still being worked out. He said longer-term maintenance would be carried out over 12 to 18 months once the lockdown restrictions on the movement of people were eased.