Eskom’s loadshedding-free winter enables a likely scenario of a loadshedding-free summer outlook due to structural generation improvements
26 August 2024
Eskom provided its outlook for the summer period, 1 September 2024 to 31 March 2025, and provided an update on its current business operations following five months (152 consecutive days) without loadshedding, including the entire winter season.
The Generation Operational Recovery Plan, which commenced in March 2023, continues to enhance efficiencies for Eskom and deliver a structural shift in fleet performance. Based on the improved generation performance, the base case scenario indicates that there will be no loadshedding if unplanned outages stay at 13 000MW or below.
Key Performance Highlights
A winter without loadshedding: There was no loadshedding during the 2024 winter period, compared to 153 days of loadshedding in the 2023 winter season.
Positive impact on economic outlook and profitability: Potential ~2% growth for the South African economy and improved financial performance for Eskom in financial year 2025 (1 April 2024 to 31 March 2025)
Reduced Unplanned Capacity Loss Factor (UCLF): UCLF averaged at 12 400MW in 2024 winter, reaching a 12-month low of 11 300MW in July 2024. This marks a 20% improvement and is 3 100MW better than the 15 500MW likely scenario in the 2024 Winter Outlook.
Enhanced reliability through increased planned maintenance: Eskom surpassed its planned maintenance target of 3 677MW, achieving an average of 4 799MW during winter 2024 – a notable improvement over the past two years.
Sustained increase in Energy Availability Factor (EAF): The EAF rose from 57.00% in April 2024 to 67.02% by the end of July 2024 – a significant improvement of 10.02%.
Reduced reliance on Open-Cycle Gas Turbines (OCGTs) and diesel cost savings: Decreased dependence on OCGTs resulted in a 74% reduction in diesel costs, saving over R10 billion compared to the same period last year.
Consequently, this year’s Summer Outlook base case has been revised downwards by 1 500MW from the previous (2023/24) Summer Outlook. For a scenario where unplanned outages rise to 14 000MW, Stage 1 loadshedding could be implemented. The unlikely scenario of unplanned outages at 15 000MW will at worst result in Stage 2 loadshedding. The trend in the performance of the fleet has reduced both the base case unplanned capacity assumption, and the possible intensity in the event that loadshedding is needed.
It is noteworthy that the 2023/24 Summer Outlook was based on unplanned outages ranging between 14 500MW and 17 000MW, which necessitated the implementation of Stage 7 loadshedding as a worst-case scenario – a scenario that was successfully avoided.
Further business highlights
Eskom aims to add approximately 2 500MW of generation capacity by January 2025 through meticulous implementation of recovery plans. Koeberg Nuclear Power Station Unit 2 is expected to return to service from a long-term outage in December 2024, bringing 930MW to the grid. Kusile Unit 6 will be synchronised for the first time into the grid in December 2024, adding 800MW of capacity. The return of Medupi Unit 4 from an extended outage will add another 800MW before the financial year-end.
Eskom’s staff turnover has decreased to 1.5%, while the employee morale index has risen from 3.6 to 3.9. The company is building a strong talent pipeline with 2 000 learners, 80% of whom are in technical roles such as artisans, engineers, operators and technicians.
“As Eskom enters a competitive electricity market, it has not only delivered a winter free of loadshedding, but it has done so by being efficient and saving over R10 billion in diesel spend that will be a strong driver to a possible return to profit in our current financial year (FY25). This outcome has led to predictions suggesting ongoing performance can contribute to potential growth in the economy of around 2%,” said Dan Marokane, Eskom Group Chief Executive.
“Globally, market reforms as we are going through in South Africa generally led to lower electricity prices and Eskom will absolutely compete on that basis. The winter performance demonstrates what this company is capable of as we undertake our further strategic initiatives and re-affirms Eskom as worthy of further future investment to serve South Africa and drive economic growth. I would like to express gratitude to the Eskom employees for their hard work and dedication in moving Eskom towards operational sustainability,” concluded Marokane.
“The visible, structural shift in the generation fleet performance demonstrates the quality of work Eskom’s teams, supported by our stakeholders, have delivered to strengthen the infrastructure of this country, and ensure that what is fixed stays fixed, cost effectively. We would like to thank all stakeholders, including the government and the National Energy Crisis Committee (NECOM), for their unwavering support. We will continue to build on the successes of the Generation Operational Recovery Plan and optimise resources and processes,” said Eskom Group Executive for Generation, Bheki Nxumalo.
“By returning more capacity to the grid we have not only suspended loadshedding, but we have also created a buffer so when we experience delays in returning further units to the fleet, the impacts that are experienced are much less severe and we will continue to focus on increasing the generation capacity of the fleet,” concluded Nxumalo.
Delivering a competitive and sustainable future proof Eskom
Eskom remains focused on achieving financial and operational sustainability through continued improvements in the EAF, aiming for 70% by March 2025. The company is also focused on reducing municipal arrear debt, enhancing measures to address crime and corruption and developing a skilled workforce to secure its long-term success.
As part of its strategy to foster a competitive energy industry, significant progress is being made towards the legal separation of Eskom’s operations. Plans are in place to establish independent generation and distribution subsidiaries under Eskom Holdings SOC Limited within the same timeframe. This restructuring aims to enhance efficiency and strengthen the company’s future sustainability.
Eskom is further committed to diversifying its energy sources by launching 2 000MW of clean energy projects as part of its push for a sustainable energy future.
Issued by Eskom Media Desk, 27 August 2024
