JOHANNESBURG (miningweekly.com) – Energy utility Eskom is in the throes of reviewing various requests for proposals submitted as part of its hunt for a new coal supplier for the Arnot power station, in Mpumalanga, after the nonrenewal of its coal supply agreement with historical coal partner Exxaro. Eskom’s coal agreement with Exxaro was left to lapse at the end of December, after the parastatal cited the miner’s increasing inability to service its four-million-ton-a-year supply agreement, stating it was only able to provide the 2 100 MW power station with around one-million tons a year of coal – around 25% of its total requirement. Print Send to Friend 0 0 The remaining coal had been sourced from several other coal suppliers, Eskom spokesperson Kulu Phasiwe told Mining Weekly Online on Friday. He expected a decision on the new coal supplier to be made by the end of March, adding that it was possible that several vendors would be selected, should a diversified supplier base prove more economical.
“If more than one supplier is able to give us value for money, we will select several to fulfil Arnot’s coal needs. “While Exxaro was initially Arnot’s only coal supplier, its volumes slowly declined, while the cost of its coal increased. By the end of last year, Exxaro was charging around R900/t of coal, while the average of the other suppliers – which serviced around 80% of the station’s coal requirements – was R400/t,” he remarked. Phasiwe assured Mining Weekly Online that operations at the Arnot power station remained unaffected by the cessation of the Exxaro supply agreement, as it had been able to source adequate volumes of coal from its various suppliers.
Eskom CEO Tshediso Matona apologised to the nation on Monday after four days of rolling power cuts disrupted Christmas shopping, costing the retail sector dearly and inconveniencing clients all over the country.
Matona disclosed that a delay in ordering diesel was the last straw that pushed the country unexpectedly into load shedding on Thursday.
Eskom’s two open-cycle gas turbines (OCGTs) are currently being used for up to 17 hours per day, which is way beyond what they were designed to do. Ankerlig power station uses 425 000 l/h and Gourikwa 236 000l/h. In November alone Eskom burnt about 140 million litres of diesel, Matona said.
He said diesel is a huge factor determining Eskom’s financial health and the financial director keeps a close eye on the cost. A delay in getting the green light from finance delayed the placement of the diesel order. These “internal processes need to be better aligned,” he said.
This was the main contributing factor for load shedding on Thursday, Matona said. It came against the background of unacceptably high breakages in the power stations and depleted water resources at the pump storage stations.
The situation continued on Friday and deepened when the OCGTs ran completely dry and a further 1 000 MW generation capacity was lost when three coal powered units tripped and a unit at the embattled Majuba power station went off-line due to coal supply problems.
These issues carried over into the weekend and on Monday a power cable to the mobile coal feeder system was cut accidentally at Majuba, as the remains of the coal silo that collapsed on November 1 were being demolished.
Matona expected most of the short-term problems to be sorted out by Monday night, adding 1 700MW to the system. He said load shedding is probable on Thursday and Friday and a medium risk will remain until December 15. It will reduce thereafter until mid-January, he said.
A total of 6 037 MW is expected to return to service by the end of the month, promising a stable January, but the risk will increase for February and March.
Eskom’s current projections show 17 days in February and 16 in March with a high probability of load shedding, as money for diesel runs out.
Matona said Eskom’s diesel budget is fast running out. The rate of diesel consumption has increased disproportionately and if it continues Eskom may need more money, which would be recovered through increased tariffs.
He said at current projections the diesel cost for the financial year will be equal to the R10 billion spent in the previous financial year.
Eskom executive for sustainability Dr Steve Lennon said Eskom will look for savings on other budget items that can be reallocated to the diesel budget, but if need be, the utility will ration diesel. He said Eskom had until the end of January to find a solution.
Matona denied over and over that there is a crisis at Eskom, but acknowledged there are “challenges galore”. He said the leadership of the organisation has been stabilised and there is a plan for each challenge. “It won’t deliver results overnight and we are engaging government.
“There are solutions. We may not have all the tools we need, but we are thinking it through,” he said.
He added that if there is a total blackout, one would be able to say there is a crisis at Eskom, but as long as load shedding is implemented when the national control centre deems it necessary, that won’t happen.
Lennon advised customers to check load shedding schedules and prepare for stage 3.
Load shedding schedules for municipal schedules are available here. Click on your municipality to see days and times affected.
Direct Eskom customers can search for their suburbs here.
If the less invasive phase 1 or 2 is implemented, it will be a bonus. He said Johannesburg decided to implement less frequent but longer periods of load shedding of four hours. Ekurhuleni is shedding in three-hour slots and in the rest of the country it is mostly limited to two hours at a time.
He said suggestions have been made for longer periods and more regular load shedding in an effort to bring more certainty. Eskom is however only implementing load shedding when absolutely necessary and any decision to expand it beyond that will have to be taken outside of Eskom.