Eskom resumes loadshedding as Andre de Ruyter drafts operation fix

By Paul Burkhardt

(Bloomberg) – As the newly installed head of South Africa’s debt-stricken state power company drafts plans to fix its operations, the utility offered yet another reminder of its inability to provide a stable supply of electricity.

Eskom, which generates about 95% of the nation’s power, on Thursday resumed controlled blackouts, citing system constraints and depleted emergency resources. They’re the second round of scheduled outages this month and Eskom’s generation fleet is showing no signs of stabilising.

Since taking up the post on January 6, Chief Executive Officer Andre de Ruyter has given a rough outline of what’s being considered to fix the utility, including a disciplined maintenance schedule. On Friday, he will present a “State of the System” briefing that may shed more light on how he’s going to turn things around.

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“His focus will be on wanting to reassure stakeholders that his tentative plan will get support,” said Darias Jonker, a London-based director at Eurasia Group. “He wants to show that he’s in charge.”

Solutions to South Africa’s power crisis have already been widely discussed. President Cyril Ramaphosa dispatched various task teams, multiple ministers and revived a so-called war room to solve Eskom’s operational, financial and other issues. Labour unions have proposed the company use pension funds to help cut its more than R450bn ($31bn) debt.

In addition, the Department of Mineral Resources & Energy published a request for information from companies that can help provide power to the grid. The deadline for those submissions is Friday and, after being reviewed by the department, requests for proposals on generation are expected to follow.

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Outages cut gross domestic product by as much as $8bn last year and the company is seen as the biggest threat to South Africa’s economy.

Eskom has been using generators originally intended to operate during peak-demand periods to offset the delay to bringing some units back online, it said on Thursday. Power cuts may be required to replenish costly diesel supplies and the water used by pumped-storage plants.