Pretoria – While keeping the lights on, power utility Eskom has increased its full year profit to R4.6 billion.
“Revenue rose 10.6% to R163.4 billion and net profit for the year was R4.6 billion,” said the utility at the release of its financial results on Tuesday.
Releasing the results for the year ended 31 March 2016, Eskom’s Group Chief Executive Brian Molefe said the stabilising of the company led to the better management of the utility.
“With new leadership and intensified staff engagements, we have stabilised the organisation. Despite the challenges we face, we continue making progress in the technical and operational areas of the business,” said Molefe.
Through the company’s improvement plan, the necessary maintenance work at Eskom’s ageing power stations continues.
“We have risen to the challenge of completing the necessary maintenance of our ageing power stations, while delivering on our new build projects, which will add capacity to the grid in future,” said Molefe.
Eskom has seen a turnaround in generation performance during the last six months of the financial year, with plant availability showing steady improvement.
Plant availability averaged 73.5% in the fourth quarter. Unplanned outages improved from an average of 16.2% in April 2015 to 11.5% in March 2016. This is attributable to a focus on reducing partial load losses, as well as previous planned maintenance starting to bear fruit.
As a result of the improved performance of baseload power stations, spending on open cycle gas turbines (OCGTs) was reduced from about R1.2 billion in April 2015 to R25 million in March 2016.
The national grid improved largely due to the commissioning of Medupi Unit 6, coupled with lower demand, improvement in plant performance and increased production from independent power producers (IPPs).
“Strategies are in place to address system constraints. Further easing is expected as Ingula, Medupi and Kusile [power stations] are progressively commissioned, coupled with further increased production from the IPPs.
“Going forward, we remain focused on minimising load shedding, increasing maintenance, accelerating the new build programme, energising our workforce, implementing key safety improvements, as well as operational efficiencies and cost containment measures,” said Molefe.
Eskom chairperson Dr Baldwin Ngubane said Eskom would no longer be a constraint to South Africa’s economic growth. He said the company’s Corporate Plan for the five years to 2020/21 aims to re-establish Eskom as a catalyst for growth.
“Our Corporate Plan will drive ongoing improvement in our operational and financial sustainability, while stimulating economic growth and driving socio-economic development. We recognise the need for fundamental operational change if we are to provide an affordable, sustainable electricity supply to all South Africans,” Dr Ngubane said.
Ngubane said the new build programme would add 8 600MW of new capacity by 2020/21. Eskom has signed 65 power purchase agreements with IPPs, which would add 4 900MW of IPP capacity to the grid by 2020/21.