R/€ = 19.50 Change: -0.02
R/$ = 17.55 Change: -0.02
Au 1729.33 $/oz Change: 8.24
Pt 838.25 $/oz Change: 6.31
 
 
R/€ = 19.50 Change: -0.02
R/$ = 17.55 Change: -0.02
Au 1729.33 $/oz Change: 8.24
Pt 838.25 $/oz Change: 6.31
 
 
BACK

As Eskom rolls out boiler fixes to more Medupi units, it confirms FGD talks with World Bank

21st May 2020 BY: Terence Creamer
Creamer Media Editor
Watch this video on YouTube

Electricity utility Eskom is rolling-out design modifications made recently to Medupi Unit 3 to Medupi Unit 6, rather than waiting for the results of an evaluation of the fixes, which is proceeding in parallel.

The unit was shut for 75 days on January 26 to address defects that emerged, mostly in relation to the boiler plant, after the unit entered into commercial operation in June last year.

Advertisement

The defects are believed to be generic to all units installed to date at both Medupi and Kusile, preventing them from attaining output levels in line with their 790 MW-plus nameplates.

It emerged earlier this year that most of the operating units at Medupi and Kusile were delivering at rates of between 350 MW and 400 MW.

Advertisement

COO Jan Oberholzer confirmed on May 21 that Unit 3 began producing at a capacity of 793 MW after the outage, which was completed on schedule, notwithstanding work restrictions imposed on site as a result of the Covid-19 lockdown. It was, on average, injecting 729 MW of that output into the grid.

He also announced that, despite an ongoing assessment of the efficacy of the remedies, which would endure for up to four months, Unit 6 was undergoing similar modifications, owing to Eskom’s confidence in the modifications made.

Medupi Unit 1 would be similarly repaired in May, followed by units 4 and 2 in July and August, while Unit 5 was scheduled to enter a 75-day outage in November.

Eskom and Mitsubishi Hitachi, to boiler supplier, have reportedly agreed to share the commercial burden of the defect repairs on a 50:50 basis, but no final cost estimate has been provided.

A process is also being established to determine liability for the defects and, once that process is been concluded, the party liable will refund the other.

Eskom is still working on cost-to-completion estimates for Medupi and Kusile of R145-billion and R161.4-billion respectively. However, many commentators warn that these costs are likely to rise further.

All going to plan, Eskom intended handing over Medupi to its generation division, headed by newly appointed divisional MD Bheki Nxumalo, by the end of the financial year.

Similar modifications will also be implemented across the Kusile units.

Oberholzer also confirmed that the Eskom board had been briefed in April on a proposal to explore alternatives to the installation of flue-gas desulphurisation (FGD) units at Medupi, a requirement of the 2010 World Bank loan of $3.75-billion.

He said that retrofitting the units with FGD would involve capital expenditure of more than R35-billion, which would be difficult in light of Eskom’s financial constraints.

It would also make the power station far more water intensive and reduce its overall nameplate capacity by 90 MW.

The request was for the board to provide the executives with six to nine months to assess alternatives that nevertheless honoured Eskom’s air-quality commitments to its financing partners, including the World Bank.

“So at this point in time, we are engaging all the various stakeholders to discuss the FGD matter.”

CEO Andre de Ruyter added that Eskom had a “good, open and constructive” relationship with the Wold Bank and revealed that he would be meeting with senior bank officials again in late May.

“We are continuously clarifying, exploring and making sure that we remain aligned and committed on the various terms of the agreements that we have entered into,” De Ruyter said. 

EDITED BY: Creamer Media Reporter
EMAIL THIS ARTICLE SAVE THIS ARTICLE ARTICLE ENQUIRY
Advertisement
 
 
Prev Next