The cost to repair the damages at Medupi’s Unit 4 could cost between R1.5bn and R2bn. And it could take up to two years to fix the unit. This is a major setback for a power station that already faces cost overruns and delays in completion.
How big a setback is the recent explosion at a unit of Medupi Power Station for SA’s energy security that has long been compromised?
It will be an enormous setback, considering that the explosion has cost SA 700 megawatts in lost energy generating capacity at Medupi in Lephalale, Limpopo, which has become the most expensive coal-fired power station in the world to construct, with an estimated capital cost of at least R120-billion (so far).
For context, the Eastern Cape is the least energy-guzzling province in SA because it doesn’t have energy-intensive industries that SA’s economy relies on, unlike North West, which is a mecca for the mining industry, requiring more energy from Eskom.
To power up the Eastern Cape, the province requires at least 2,000MW every day from Eskom. The lost generation capacity at the Medupi unit (700MW) represents about a third of the Eastern Cape’s daily energy needs.
To recap: Before midnight on Sunday, 8 August, the Medupi Power Station experienced an explosion at the Unit 4 generator, resulting in extensive damages to the unit. The cause of the explosion is not yet known and an investigation into how the blast occurred is under way.
Unit 4 has been shut down and the entire 700MW that it produces is gone. It will return once the unit has been completely fixed. The damage might have been worse because the explosion could have also damaged Unit 5, which, in design, is in proximity to the now-gutted Unit 4.
Eskom spokesperson Sikonathi Mantshantsha told Business Maverick that mechanical safety devices at Unit 5 kicked in to prevent major damage at the unit. There was minor damage to the unit and by Wednesday evening, the unit “returned to service”.
Eskom CEO André de Ruyter told News24 that repairing the damage at Unit 4 could cost between R1.5-billion and R2-billion, and could take up to two years.
But estimates of the cost and duration of fixing the unit are premature as an investigation into how the blast occurred is at an early stage. In other words, the cost of the repairs could actually be more than R2-billion once the investigation is completed.
“We said we don’t know the extent of the damage, how long, and how much it will take to repair. We don’t have the final answers yet,” said Mantshantsha.
Mantshantsha’s boss, De Ruyter, has already ruled out sabotage as the cause of the explosion. “We, however, don’t suspect any foul play or sabotage. The loss of approximately 700MW is a blow to our efforts to maintain a stable electricity supply,” De Ruyter said.
After all, the explosion happened a few days after Eskom announced that the construction of Medupi had been completed. At 4,764MW, the energy-generating capacity of Medupi could power up the requirements of the Western Cape, which requires 3,500MW a day.
Completion of Medupi was announced after Unit 1, the last of six generation units of Medupi, attained commercial operation status. The capital cost of Medupi has been R122-billion so far, and Eskom estimates that it could reach R135-billion on full competition over the next 24 months. It was initially meant to cost between R56-billion and R80-billion. The power station came online seven years after the scheduled date of completion of 2014.
The completion of Medupi Power Station doesn’t necessarily mean the end of load shedding. In fact, the explosion might exacerbate the need for routine power cuts. Before the explosion, Medupi assumed an energy availability factor (EAF) – the percentage of Eskom’s power available for dispatch – of 63.3% for the five units, excluding Unit 1.
Mantshantsha said the EAF might have been reduced due to the explosion.
“It is premature to pronounce on the EAF, because when the explosion had occurred the unit had been immediately placed under maintenance, meaning it was not available earlier. It was a short outage. That doesn’t change that number [of the EAF], because it was not available anyway.”
To ensure that SA isn’t thrown deeper into load shedding, Eskom will have to start fixing the shut down Unit 4 or find ways to replace lost generating energy capacity. There is talk that maybe Eskom will take Unit 6 from Kusile Power Station in Mpumalanga, which has not yet been put into service and move it to Unit 4 at Medupi. But Mantshantsha said this will be a long and costly exercise. The best option would be to repair the damage at Medupi. DM/BM