By Alexander Winning

JOHANNESBURG, (Reuters) – Eskom is a South African state-owned power utility that sees a way out of years of crises by switching from coal-fired to renewable power generation.

Eskom implemented power cut for over 10 years in Africa’s industrialised country. This has impeded growth and prevented investment. The country has around 400 billion rand ($25 Billion) of outstanding debt which the government services with regular bailouts.

“From the crisis that Eskom currently finds itself in – very poor plant performance, excessive debt – this contains the opportunity for us to really act as the foundation for a new dispensation in South Africa,” CEO Andre de Ruyter told the Reuters Next conference.

“Hopefully, we can persuade others to come here and set up factories to build components of renewable energy. That will create employment that will generate demand for electricity, turning this current challenge from a vicious downward loop into a positive upward cycle,” he said.

Eskom manages 15 coal-fired electricity stations, which generate over 80% of country’s electricity. However, they regularly fail to operate. Eskom also manages Africa’s sole nuclear power station, as well as a few smaller hydroelectric, backup, and pumped storage plants.

However, it will close down 22,000 megawatts or MW of coal plants. These plants are nearing the end of life and could be shut down by 2035. That’s nearly half their 46,000 MW total nominal capacity. It is planned to replace part of this with gas or renewables while allowing independent power producers to fill the gap.

Gwede Mantashe is an influential figure in the African National Congress’ ruling body and was a trade union leader who had in August compared it to “economic suicidal” and has been critical of the plans to get rid of coal. https://www.reuters.com/world/africa/south-africa-faces-isolation-if-it-sticks-with-coal-eskom-ceo-says-2021-08-31

De Ruyter indicated that Eskom identified two gas projects, one of which has a Richards Bay capacity of 3,300 MW, and the other at its Komati coal-plant with 1,000 MW. By 2050, Eskom hopes to achieve “net zero” https://www.reuters.com/business/environment/africas-top-emitter-seeks-10-bln-shift-coal-2021-06-30 carbon emissions through offset initiatives.

De Ruyter, who took the helm of Eskom in January 2020, said Eskom hoped to get the “lion’s share” of the $8.5 billion https://www.reuters.com/business/environment/us-eu-others-will-invest-speed-safricas-transition-clean-energy-biden-2021-11-02 of financing that South Africa secured from Western countries in a deal announced at the COP26 climate conference in November.

It will spend that money on the transmission infrastructure, which connects to the most productive solar and wind farms in the country. Additionally, it will strengthen the distribution grid to allow for more private generation.

Eskom tried to increase the efficiency of its coal fleet’s performance through deep maintenance but has so far failed to achieve any results. De Ruyter stated that it may take three to four more years for the significant improvement in energy availability factor in coal units in service, reflecting the severity of the problem.

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($1 = 16.1331 rand)