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(Bloomberg) — Mpho Makwana, chairman of South Africa’s embattled state electricity company, said the change in management structure has helped improve the plant’s performance, allowing power outages to be eased, and more gains can be expected.
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Over the past few weeks, the percentage of energy that Eskom Holdings SOC Ltd. can produce has increased. for its generating capacity to 60.5%, compared to around 56% a year ago, Makwana said in an interview in Bloomberg’s Johannesburg office on Friday.
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The improvement belied warnings that South Africa’s wintry weather could see power outages exceeding previous records of up to 12 hours a day earlier this year. Blackouts, which began in 2008, have crippled the South African economy and weakened the rand. The central bank estimates that the outages will cut two percentage points from the country’s growth rate this year.
“The improvement was not an accident,” Makwana said. He attributed part of the gains to the company’s decisions to eliminate the chief operating officer position and give individual plant managers direct access to senior executives — changes he said improved morale.
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On Friday, Erik Shonmagum, CEO of Eskom Generation, told reporters that a series of winter storms over the past week has helped offshore wind plants boost their output, which has also reduced outages.
He noted that the improvement in the availability of electricity was also driven by an increase in customs duties that reduced demand, improved maintenance at power stations, and an increase in diesel supply in open cycle gas turbines that are used for emergency supplies during periods of high demand.
The rand has gained 4.3% against the dollar over the past five days, the third best performer globally, according to data compiled by Bloomberg, in part because of the easing of the energy crisis. However, Eskom’s so-called energy availability factor level remains below the 64% its board has targeted by this juncture and needs to be more sustainable.
“We’re making progress,” Makwana said. “It’s still early days to get the singing and dancing going, but for a whole month now we’ve seen this consistent performance.”
– With the help of S’thembile Cele and Amogelang Mbatha.