Eskom resorts to moving coal by road as blackouts loom

Eskom has started moving coal from its Medupi power station in Limpopo by road to Mpumalanga where 10 power stations have coal stockpile shortages.

An energy expert says it costs about R500 a ton to transport coal from Medupi, pictured, to 10 power stations in Mpumalanga whereas the coal itself costs R300-R350 a ton. He said the extra coal trucks would seriously damage the roads.
Image: Business Times

Power stations are supposed to have enough coal to keep the lights on for 20 days.

The power utility said on Friday during a media briefing that it will transport 1.4 Mt (million tons) of coal by train per year from Medupi to the 10 affected power stations from next month.

The affected Mpumalanga power stations are Arnot, Camden, Duvha, Hendrina, Komati, Kriel, Kendal, Majuba, Matla and Tutuka.

“While we have a recovery plan, load-shedding cannot be ruled out for the remainder of 2018,” Eskom said.

Eskom implemented emergency stage one load-shedding on Sunday before it was suspended at 7pm.

Energy expert Chris Yelland said it costs about R500 a ton to transport coal from Medupi to Mpumalanga whereas the coal itself usually costs about R300 to R350 a ton.

Yelland said Medupi might struggle to move coal from the Exxaro Grootegeluk mine near Medupi by either train or road to Mpumalanga because the rail link was running at capacity.

“The transport is going to cause serious damage to these roads. The question is: who pays?”

Yelland said another problem in Mpumalanga was declining production of “tied” coal mines which were linked with and supplied coal directly to Eskom power stations.

“Eskom has been unwilling to recapitalise these mines to extend their lives and to upgrade their equipment … Eskom has been unwilling to develop the mines. They are basically saying ‘we don’t want to own the bakery’, they just want to buy the bread.”

Another problem in the province has been the Gupta’s Tegeta Koornfontein mine, that used to supply the Komati power station, going into business rescue.

Cape Town managed to avoid load-shedding on Sunday as the city had additional power on tap being generated by the Steenbras pumped storage scheme.

Steenbras power station operates via a hydroelectric pumped storage scheme used by the city to generate extra power at peak times or, if there is spare capacity, to offset the impact of stage one load-shedding.

BusinessLIVE reported that Eskom had applied to the National Energy Regulator of SA (Nersa) for an electricity tariff hike of 15% a  year for the next three years.

A forensic report commissioned by the National Treasury on Friday recommended that the Hawks investigate a coal-supply agreement (CSA) between Eskom and Gupta-owned Tegeta in which it found irregularities and illegalities.

The report by Fundudzi Forensics found that senior Eskom executives and officials had also violated anti-corruption laws with a R659m “prepayment” to Tegeta.

The damning report on the wanton abuse of process comes as Eskom faces coal supply challenges. The parastatal reportedly admitted in November that its supply problems stem from mines run by Tegeta Exploration and Resources.

The report recommends criminal investigations into the likes of former Eskom officials Matshela Koko, Anoj Singh and Suzanne Daniels, as well as board members over the prepayment. It recommends that Singh and Koko also be investigated for misrepresenting facts on the matter to parliament.


Source: TMG Digital

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