Has Eskom run out of diesel? Or money? Or both?

Issued by Ghaleb Cachalia MP – DA Shadow Minister of Public Enterprises
15 Sep 2023 in News

Note to editors: Please find attached soundbite by Ghaleb Cachalia MP.

The country is currently in an elevated schedule of load-shedding yet, according to Eskom’s system update released this morning, zero Open Cycle Gas Turbines (OCGTs) have been utilised in the past 24 hours. This can only mean one thing, either Eskom has run out of diesel, or money or both.

If the diesel supply situation at Eskom has deteriorated, it is incumbent upon the Minister of Public Enterprises, Pravin Gordhan, to urgently provide a status update and the steps that are being taken to remedy the situation.

OCGTs are not meant to be run like regular power stations as they are only meant to provide supplementary power during peak periods. However, due to a generation shortfall necessitated by Eskom’s old coal fired power stations – which are constantly breaking down, OCGTs are now being run non-stop by burning diesel worth billions of rands.

If it turns out that Eskom has run out of diesel for the OCGTs, chances are that South Africa will enter a period of semi-permanent stage 6 load-shedding. This horrendous situation has become possible despite repeated false assurances from ANC Ministers and Eskom that the utility has enough cash to cover the diesel requirement until the end of the financial year in March 2024.

The scary prospect is that if Eskom has run out of money to buy diesel, Treasury will most certainly not be in a position to provide emergency funding. They have already issued an SOS on the precarious state of the country’s public finances – asking government departments to cut back on spending. With Eskom’s shambolic finances, they will not be able to finance diesel purchases off their own balance sheet.

Part of the load-shedding challenges that the country is facing could have been avoided if planned maintenance had not been interfered with in the last few months. Compared to the previous 2 years, planned maintenance for the winter months was uncharacteristically below the usual average often seen during the winter period. It was this low maintenance schedule that led to a temporary reprieve in load-shedding and false claims by ANC Ministers that the country had turned the corner on load-shedding. Now the country is seeing the consequences of undue political interference with planned maintenance at Eskom.

The ill-advised plan to postpone maintenance of Eskom generation plants and create an illusion that generation was on the mend has pushed the country to the brink, with disastrous economic consequences. With 45% of Eskom’s generation capacity offline, there is no guarantee that the remaining functional units will be able to keep working for much longer before they, too, break down. At this rate, it is very possible that load-shedding may go beyond stage 7 today or over the weekend.