South Africa’s power utility, Eskom, has begun the year with its most robust electricity generation position in over five years, holding a 4,400-megawatt capacity cushion compared to the same period last year. This improved performance has already yielded significant financial savings, most notably a drastic reduction in projected diesel expenditure.
The update was provided by Eskom General Manager Eric Shunmagum, who detailed the utility’s operational and financial turnaround in an interview. Shunmagum, who serves in the office of the Group Executive for Generation, stated that the improved reliability of the generation fleet has led to “massive savings” on diesel.
“We reported spending R33 billion two years ago,” Shunmagum said, “but as we move into this year we are projecting to spend just below R8 billion.”
The recovery is attributed to a focused, 32-month Generation Recovery Plan that targeted eight power stations, which were previously responsible for approximately 70% of breakdowns. Shunmagum reported that unplanned outages have dropped from a peak of around 18,000 megawatts 32 months ago to roughly 8,000 megawatts currently—a recovery of about 10,000 megawatts.
Key to this regain was the return to service of major units, including Kusile Unit 6, Medupi Unit 4, and a Koeberg unit. Coupled with intensive planned maintenance over the past years, these efforts have increased plant reliability and stability.
“Unlike previous interviews with a system unreliable, I’m a bit more confident,” Shunmagum stated.
Focus Shifts to Cost Control and Future Sustainability
With improved capacity easing the immediate pressure of load-shedding, Eskom’s strategic focus is now shifting to cost control and long-term sustainability. Shunmagum revealed that the utility has compacted to reduce costs by R50 billion over the next three years, targeting the 2029 financial year.
He emphasized that the current system is “more than adequate” at a 65% Energy Availability Factor (EAF), but Eskom is compacting with its shareholder to stabilize around 70%, with aspirations to reach 72%.
Looking ahead, Shunmagum outlined a multi-pronged approach for the energy transition. In the short to medium term, the existing generation fleet will remain crucial, while new capacity from renewable sources and gas is integrated. For the long term, he cited nuclear power as part of the plan.
A significant portion of future investment, he explained, is directed toward “clean coal” technologies aimed at reducing emissions from the existing coal fleet. Eskom is specifically investigating Circulating Fluidized Bed Combustion (CFBC) technology, which can lower particulate and gas emissions from stacks. The utility plans to run pilot projects, retrofitting this technology into older stations, though solving for carbon output remains a challenge.
Structural Changes and Leadership Cited as Critical Enablers
Shunmagum credited the ongoing unbundling of Eskom into separate generation, transmission, and distribution entities as a key enabler of the turnaround, fostering more focused and competitive operations. The establishment of the National Transmission Company of South Africa (NTCSA) is the first step, with an independent system operator to follow.
He also highlighted the R254 billion debt relief package from government as a “critical enabler” that stabilized Eskom’s balance sheet and allowed for advanced maintenance planning and procurement.
Ultimately, Shunmagum pointed to a combination of factors for the recovery: focused execution of the recovery plan, positive leadership from the Minister and the Eskom board, streamlined government processes via the Energy Action Plan, and a deliberate “cultural shift” within the organization.
“The focus was on putting the right people in the right places,” he said, noting that the easy part was identifying the problematic plants, but sustained project management and reporting at the highest levels were key to reclaiming nearly 8 gigawatts of capacity.