February 12, 2019 / 12:17 PM / 6 months ago

UPDATE 3-South Africa's Eskom extends power cuts as crisis persists

* South African state power utility in crisis

* Ramaphosa plans to split firm to boost efficiency

* Power cuts due to unplanned outages, diesel shortage

* Eskom hopes to end power cuts this week - official (Adds minister of public enterprises comments)

By Alexander Winning

JOHANNESBURG, Feb 12 (Reuters) - South African power utility Eskom implemented major electricity cuts for a third straight day on Tuesday, as a shortage of generating capacity exposed the frailty of the struggling state-owned firm despite government promises to revive it.

President Cyril Ramaphosa is trying to reform Eskom, which supplies more than 90 percent of the power in Africa’s most industrialised economy but is drowning in more than $30 billion of debt, to lift the economy before an election in May.

The cash-strapped utility said it would cut 3,000 megawatts (MW) of power from the national grid from 0600 GMT on Tuesday, likely until 2100 GMT, a day after cutting 4,000 MW in the worst power cuts seen in several years.

Around a third of Eskom’s 45,000 MW capacity is offline.

Public Enterprises Minister Pravin Gordhan told parliament on Tuesday that South Africa had asked Italian energy firm Enel for technical assistance to end the power cuts.

“Enel will be sending two to three coal power station engineers to South Africa shortly,” Gordhan said.

“These outages have a massive impact on the economy, from mining, big industries, manufacturing to small businesses like coffee shops,” he said.

A senior generation official, Andrew Etzinger, told Reuters that around 11,000 MW was offline because of plant-related problems, while approximately 5,000 MW was out of service because of planned maintenance. A further 2,000 MW was unavailable because of a shortage of diesel.

State-owned oil company PetroSA said it was in talks with Eskom over emergency diesel supplies.

The power crisis prompted an urgent meeting of Eskom’s board of directors and executives with Gordhan on Monday, when it also pummelled the rand currency. On Tuesday the rand was little changed against the U.S. dollar.

Etzinger said Eskom was aiming to end the power cuts by the end of the week by bringing some generating units back online.

“NO SABOTAGE”

The cuts are prompting frustration among ordinary South Africans and shop workers, many of whom do not have access to backup power sources like diesel generators.

“We’re struggling,” said Eunice Mashaba, a manager of a textile shop north of Johannesburg.

“Yesterday the power went off at half past four so we had to close the shop early. Today we came in and there was no power. Most of my customers don’t carry cash, they have to swipe and the (card) machine doesn’t work.”

Some firms in the mining sector, the backbone of the country’s economy, are looking at alternatives to reduce their dependence on Eskom.

Miner Harmony Gold said on Tuesday that it was in talks to build a 30 MW solar plant to supply power to some of its assets, in an effort to cut its electricity costs and dependence on Eskom.

“Our Eskom bill is massive. To replace Eskom would be a fallacy, we won’t be able to do that. However, where we have long-term projects we can start building solar plants,” Harmony Chief Executive Peter Steenkamp said at a presentation of the company’s results.

Ramaphosa, who announced a plan last week to split Eskom into three separate entities in an effort to make it more efficient, has said the latest power cuts are “most worrying”.

The president’s plan to split Eskom faces opposition from powerful labour unions and from within his ruling African National Congress party, while some analysts have said a bolder approach is needed to address the financial rot at the utility.

Etzinger said Eskom was for now treating unplanned outages at some of its power stations as technical breakdowns, despite speculation from analysts that disgruntled union members could have sabotaged some units.

“There’s no reason to believe it’s sabotage,” he said. (Additional reporting by Tanisha Heiberg and Sisipho Skweyiya in Johannesburg, and Wendell Roelf in Cape Town; editing by Emelia Sithole-Matarise and David Evans)

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