Engagements with management at five of Eskom's coal-fired power plants so far suggest it is technical and investment issues, and not corruption, adversely affecting the performance of the utility's fleet, the newly appointed minister of electricity has said.
Minister Kgosientsho Ramokgopa is visiting each of Eskom's 15 power stations, including Koeberg. Speaking to the media during a visit to the Tutuka power station on Wednesday – the fifth of the plants which the minister will visit - Ramokgopa said he would not speak about corruption in aggregate terms.
"There's 3 000MW that is locked in Kusile [that has] nothing to do with corruption whatsoever and [...] everything to do with design deficiencies. There's 210MW in addition to improvements to the [plant performance] at Kriel that has nothing to do with corruption; it's about the investment in the cooling towers. There is 1 000MW you can get from Kendal yesterday that has nothing to do with corruption, [and] everything to do with the fact that we can't remain within the [emission limits], because we have not invested in the plant."
Tutuka's management is the first so far to list corruption among its challenges, he said.
'Not a police officer'
"Here is the first time I get to a station, where they say: 'We think there is corruption here, especially in procurement - the speed with which you get spares parts, the price of these parts - you can see that there is collusion and there is something that requires attention'," Ramokgopa said.
"So that's why I say I will not speak of corruption in aggregate terms … I'm not a police officer. That's why I have to go to the plants. I must substantiate all the things I say."
Tutuka is Eskom's worst-performing plant (apart from Kusile, which is yet to be completed) with an energy availability factor (EAF) – an indicator of plant performance – of 35%, as compared to an EAF of 75% in 2018.
Turning around Tutuka's performance is critical for the whole generation system as it would help Eskom to eliminate three stages of load shedding should the plant be able to bring some 3 000MW back into operation, Ramokgopa said.
Among the key issues contributing to the plant's poor performance is inferior coal quality, although this is not due to corruption, Ramokgopa said.
"The source of the problem is at the mine, it has nothing to do with someone diverting coal and then mixing with rocks, but in fact [the problem is] at the source," Ramokgopa said, noting this coal takes a toll on the mills at the power plant (one mill is currently broken) and reduces the efficiency of the power generation units.
The bulk of Tutuka's coal is supplied by Seriti Resource's Denmark mine, which is adjacent to the power station.
Ramokgopa said the supply contract with the mine should be reconsidered, although that is up to the board to decide.
He said there was also a dire need to refurbish specific units. A top priority is to fix the cooling towers, because the temperatures are so high it undermines the units' performance, which consequently cannot run at maximum capacity.
There has also been clear underinvestment in the power station, he said, noting that this has been aggravated by a possibly misplaced impression that the plant faces imminent closure and so critical equipment has not been replaced.
Tutuka began operating in 1985 and is scheduled for decommissioning in 2035.
Speaking to workers, the minister said he would plead a case for extending the plant's life if Tutuka's EAF could be shown to improve.
The plant's management, headed by acting general manager Mxolisi Ntanzi, is aiming for an EAF of 70% by the end of the financial year ending in April 2024. They have also assured the minister that they will reach 50% by the winter.
Ramokgopa said he would have to make a case for government to provide the necessary funds to refurbish and upgrade plants like Tutuka.
"We know that the fiscus is constrained, so there will have to be a choice," Ramokgopa said. "I'm not saying it will happen, but we could increase the budget deficit, so you borrow for the purposes of investment. Or [we have to determine] what is the cost of not investing [in the plants] to the South African economy? Cabinet will make that determination; it is not me. I'll present the full facts."
Briefing Parliament earlier this year, former Eskom CEO André de Ruyter said Tutuka's performance was affected by significant criminality and that former plant manager Sello Mametja had to wear a bulletproof vest to work and that he and his family were protected by bodyguards.
Ramokgopa could not say why Mametja vacated his post.
"You can see there is fear, but at least between those four walls [management] were able to share the issues with me, and I will escalate that."
Seriti Resources said New Demark has been supplying Eskom on a "cost-plus" arrangement since 1982 and has "delivered coal consistently, meeting its contractual specification of delivering coal" with energy of 23 megajoules per kg and ash of around 28%.
In the last two years, operational interventions have even resulted in improved coal qualities, the miner said. Coal is supplied from the mine to the plant via conveyor and is sampled with daily analysis shared between the parties.
It said it is not possible to introduce external or extraneous material onto the conveyor belts prior to coal being delivered to the Tutuka coal stockyard.
Seriti said Eskom and New Denmark have agreed to commence studies to explore further improving coal qualities, which, if approved by Eskom, will require the construction and operation of beneficiation facilities to be funded by Eskom.
The company said it would welcome engagement with the minister on coal quality matters, including Eskom’s appetite or ability to fund the necessary capital projects to upgrade coal quality.