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Who will pay the R2bn price after the Medupi Power Stat...

Business Maverick


Medupi explosion: Sabotage ruled out, but the R2bn repair price could fall on energy customers

The Medupi Power Station. (Photo: Gallo Images / Foto24 / Lisa Hnatowicz)
By Ray Mahlaka
12 Aug 2021 21

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


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All Comments 21

  • These power stations are beginning to sound like our 3 submarines. One crashed into the seabed, another had its wiring burnt out and I’m not sure if no 3 ever left dock where I think they all lie rotting today.

    So Medupi after just a very short time is 1 unit down, like 5 more to go. Shouldn’t take too long before the whole thing is US.

    • That’s strange. If my eyes didn’t deceive me I saw a sub a couple of weeks ago off maidens Cove near Camps Bay. I assumed that it was one of “Ours”. Was it a visitor? couldn’t see the flag.

  • Who is being held accountable for such disastrous program management that could cause a +100% cost overrun to date???

    Who will be held accountable for the current damage???

    No problem to add another R 56 Billion for unbundling, no problem to add double digit annual increases, no problem to add add add!!!

    Awesome EKSDOM, don’t worry because the South African cash cow “the TaxPayer” must have some more milk to volunteer.

    When will our government learn that they actually work for you and me but more importantly when will we as Tax Payers learn to hold Government accountable.

    • There are so many organisations responsible for this, but ultimate responsibility lies with the previous board and the ANC, who are all ensconced in their (allegedly) ill gotten mansions, driving their ill gotten cars and denying any culpability.
      The main problem is that they elected to do the project management in house but sadly (or perhaps deliberately) those skills have been long gone and replaced by cadres with no skills.

  • I read on a different news channel that 7 employees had been suspended for negligence for failing to follow standard procedures, which resulted in the explosion.
    Whilst I rate de Ruyter, he has a huge job on his hands. In my considered opinion and from long and frustrating experience, 90% of the Eskom people are incompetent, lazy and I suspect corrupt.
    Medupi officially handed over on August 1st 2021 (SEVEN YEARS LATE) and blown to pieces on 8th August?
    Well at least we got a week out of it.

    • It sounds like having totally inadequate technicians in place. As we know, AA and BBBEE takes precedence over competence every time. And, who the hell cares safety anyway.

  • OK, so now we will get increased rates to pay for the repairs. Then increased rates to make up for the lost income. Really? The decision to go completely off grid has just become much easier..

  • Taxpayers should get more of a vote. Let’s give all citizens 1 vote, add 1 additional vote if you pay tax, another one if you own property and 1 vote for every R10,000 in tax that you pay.

  • Ultimately management must take responsibility for what appears to be gross negligence of untrained operators. Heads must roll!
    This is another nail in the coffin of the economy where ultimately tax payers and consumers will have to pay for this mess.

  • Although sabotage has been ruled out (not quite sure when forensic investigations have not yet started) it will be interesting to see if this explosion resulted from sheer incompetence on the part of operators much as happened at MossGas Mossel Bay several years ago ,also a massive explosion, and the nut that was left in a turbine or whatever at Koeberg. Both cost the country billions to repair let alone the loss of generating capacity.

  • We didn’t carry one as a strategic spare in the store. The R2 billion price tag means that all the investigations should be completely open for all to look at including instrument read outs. Surely the OEM was part and parcel of this shutdown or was it Eskom responsible for purging the unit and then OEM participates?

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