Eskom is increasing power outages to prevent a complete power outage as problems grow from a shortage of imports to breakdowns at coal-fired power plants.

The utility, which generates almost all of the country’s electricity, plans to increase shutdowns to 4,000 megawatts on Monday to curb demand. The rationing is due to a “significant shortage” of the generation, CEO Andre de Ruiter told reporters at an online briefing. Even the best-performing coal-fired power plants have had recent breakdowns, and Eskom tracks ships with supplies of diesel fuel used to operate turbines, usually during peak demand.

“Emergency measures” are needed to improve the system, De Ruiter said. “The performance was very disappointing.”

There are several elements of the grid that are not affected by the problem, allowing South Africa to embark on the path of a record year of power outages. This restrained economic activity in the most industrialized economy on the continent. Rand also weakened amid escalating power shortages.

The power units, which are expected to be put back into operation, have been delayed even at the newest station, while thousands of megawatts of generation are at risk as they operate at a reduced level with various leaks and other problems, said chief operating officer Jan Oberholzer. About 36% of the total installed capacity is unavailable due to breakdowns.

The power outage will reach a level known as Phase 4, which corresponds to 4,000 megawatts, for the first time in a month, according to data collected by Bloomberg. It started at 5pm local time, Eskom said in a Twitter statement after the briefing.

Recent imports of electricity from Mozambique’s Cahora Bassa hydroelectric plant have also not returned as expected, Oberholzer said.

Even emergency reserves are under pressure. Open-cycle gas turbines, which burn two million liters of diesel per day, must carefully manage fuel use. Eskom is tracking the arrival of vessels that will replenish stocks, and is trying to speed it up, Oberholzer said.

The utility company is also dealing with an escalation of labor problems, as one of the largest unions representing workers there, the National Union of Metalworkers of South Africa, is demanding a 15% pay rise.

“Eskom is still in a loss-making situation,” and costs must be managed throughout, De Ruiter said.

© 2022 Bloomberg

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