Despite various interventions from the government, power utility Eskom is bleeding billions of rands.
The company released its financial results on Tuesday saying it incurred a net loss after tax of R23.9 billion.
This is a significant increase from the R11.9 billion net loss reported for the previous financial year.
The company, whose load shedding programme is costing the South Africa economy R1 billion a day, said its biggest expenses included the cost of diesel and the cost of coal.
Criminal syndicates exploiting the company’s procurement processes or destroying its infrastructure network were also costing Eskom billions of rands.
Previously former Eskom CEO Andre de Ruyter said criminal syndicates were costing the company in excess of R1 billion a month.
“Primary energy expenses, specifically the expenditure to supplement generation capacity through the usage of open-cycle gas turbines (OCGTs), remained the biggest contributor to the financial loss, with a total of R29.7 billion spent on both Eskom and independent power producers’ (IPPs) OCGTs in the period under review.
“This is almost double the R14.7 billion spent in the previous year,” the company said.
Eskom’s acting Group Chief Executive, Calib Cassim, said they expected things to improve with the return to service of various generating units at Kusile power station and better management of ongoing maintenance of its ageing fleet.
But a closer look at the rate of unplanned breakdowns shows that the old power stations remain vulnerable and could continue to compromise South Africa’s energy security for the next few years.
“Generation unplanned load losses increased to 31.92% from 25.35% while planned maintenance performed at a similar level as last year, 10.39% in 2023 and 10.23% in 2022,” Eskom said in a statement.
These resulted in the implementation of load shedding for some 280 days during the year under review.
This is thanks to a large extent to the flue gas duct failure incident at Kusile power station in October 2022 which resulted in units 1, 2 and 3 being out of service for almost a year, removing 2,100MW from the national electricity grid.
“At the same time, Koeberg Unit 1 remained on long-term outage, which is nearing completion and will be followed by the Unit 2 outage. Over and above the unavailable units at the other power stations, the unavailability of the Koeberg unit and the Kusile units meant a shortfall of approximately 3,000MW from only these two stations during the winter season.”
Eskom said it was unlikely that it would require a further bailout from the government, adding that the debt relief of R250 billion will go a long way in improving its liquidity.