Eskom Generation Mulling Concession Models for Coal Plants. While Eskom evaluates various concession models to improve the performance of its breakdown-prone coal-fired power stations under ongoing financial constraints as well as debt restrictions, the company is currently weighing various concessions.
The options ranged from concessioning entire plants to private operators to consigning ringfenced functions within power stations, Eskom Generation engineering GM Thomas Conradie confirmed during a EE Business Intelligence webinar on Thursday.
Eskom Generation Mulling Concession Models for Coal Plants
Eskom has been considering a concession model for the Hendrina power station, in Mpumalanga, for some time. Nevertheless, he said that the utility was increasingly leaning towards a model whereby ringfenced plant areas are either concessioned or long-term partnerships are established with private entities to operate and maintain specific components of the plants.
The National Treasury announced in February that a consortium led by VGBE energy had been appointed to assess the state of Eskom’s coal fleet and to advise on whether some of its power plants should be privatized as part of a R254-billion debt relief package. In July, the assessment will be completed.
Silas Zimu, special adviser to the Minister of Electricity, expressed doubts about concessions at Eskom, and preferred that the private sector participate in repowering stations scheduled for decommissioning rather than managing assets that will continue to generate for many years to come.
“Eskom has been a contract manager on all these power stations, and original equipment manufacturers (OEMs) have been the suppliers and the engineering, procurement and construction [service providers] and, in some cases, they have maintained and operated the plants.
“There’s always been private participation, and maybe that’s the model we should go back to,” Zimu said.
A concession solution could have both benefits and drawbacks, according to Babcock Ntuthuko Engineering CEO Thava Govender, but he stressed that OEMs were necessary to help Eskom improve a fleet that had become unreliable because of poor maintenance.
“I think we should get all the OEM executives together with Eskom, because as a collective I’m sure we will be able to address this crisis of load shedding,” he added.
Although ACTOM John Thompson operated and maintained boilers for other clients, such systems remained core to Eskom, an organization that had developed skills and expertise over many years.
“Boiler auxiliary equipment should be included in OEM contracts to improve performance by linking key performance indicators to plant performance.
“A boiler OEM cannot guarantee performance if they are only maintaining the pressure parts and some ancillaries are not covered in the contract,” Snyman said.
Eskom has an opportunity to improve its plant performance by integrating modern diagnostics and engineering services, according to Siemens Energy Southern Africa MD Thabo Molekoa.
“Day-to-day and hour-to-hour problems require agility in a 24/7 operation.
“You are able to mobilize skills more quickly and adhere to quality and best practices when you become more agile,” Molekoa explained.