(Bloomberg) --

South Africa faces at least two more years of persistent blackouts as the country’s state-owned power company overhauls its aging coal-fired plants.

Continuous outages of as much as 3,000 megawatts will be necessary to make “space for maintenance” on Eskom Holdings SOC Ltd.’s power-station fleet, Mpho Makwana, the utility’s chairman, said at a press briefing on Sunday.

South Africa is suffering its worst-ever power cuts, with Eskom implementing blackouts for more than 200 days last year and every day so far in 2023. The rolling outages, known as load shedding, are needed to protect the grid from collapse when the company’s aging, mostly coal-fed plants can’t meet demand.

“Load shedding is an act of last resort,” Makwana said. The planned maintenance will allow Eskom to improve its energy availability factor — a measurement of how much capacity can be used — to 70% by March 2025 from 58% currently, he said. 

With the EAF at new lows, Eskom is keen to press ahead with its maintenance program, outgoing Chief Executive Officer Andre de Ruyter said at the briefing. Available capacity is likely to remain “tight” through 2023 and the company can’t guarantee power cuts won’t worsen, though the risk of so-called Stage 8 outages — the most severe — is receding, he said.

Eskom produces almost all the country’s electricity, and persistent blackouts will further curb output in Africa’s most industrialized economy. The cuts have taken a toll on industry and agriculture, and there’s a 45% chance of the nation sliding into a recession this year, a Bloomberg survey of economists shows.

New Units

In a bid to add almost 1,900 megawatts of capacity this financial year and more than three times that in 24 months, Eskom is prioritizing maintenance at six plants and working to bring new units online following repeated delays.

Crews have discovered additional problems as they repair poorly maintained equipment, De Ruyter explained. And underperformance even after the work is done demonstrates “diminishing returns,” highlighting the need for new generation capacity, he said.

Eskom is also considering buying almost 600 megawatts of power through contracts to be concluded in weeks, according to the CEO. Separately, the company will be inviting bids through a so-called dynamic market mechanism to purchase electricity on a day-ahead basis.

President Cyril Ramaphosa’s plan to address the electricity crisis includes accelerating and expanding renewable energy supply from private producers, but the latest project awards omitted wind farms due to a shortage of grid connections.

Eskom plans to make grid investments that will increase access, though funding is needed, according to De Ruyter, who said it could use some of the $8.5 billion in climate finance on offer from richer nations.

Read more: South Africa Backs Plan Key to $8.5 Billion Funding Deal

(Updates with further CEO comments starting in eighth paragraph.)

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