Johannesburg — ESKOM power stations are losing thousands of megawatts because of the poor quality of coal the utility received from its coal suppliers, Eskom MD for primary energy Dan Marokane said yesterday.

The poor coal quality presents Eskom with yet another coal-related frustration after its highly publicised coal procurement problems that contributed to the January 2008 electricity supply constraints.

Additionally, the load losses led to financial losses of about R1bn for Eskom in the past financial year, Eskom said in its annual report.

The high load losses at Eskom's power stations are a threat to the security of supply. "Every megawatt counts," Mr Marokane said. Eskom has warned that power supply will be tight from next year because of rising electricity demand.

Mr Marokane said local coal producers prioritise coal exports at the expense of quality coal for power generation. "We literally have a power station that loses between 500MW and 900MW of capacity because of the poor coal quality. We are losing capacity that we already have. This is a pressing matter for us," Mr Marokane said.

This is not the first time Eskom has raised concern about coal quality. In its latest annual report, the utility said there has been "a marked" deterioration in the quality of coal deliveries to its power stations. Eskom said Duvha, Matla and Tutuka power stations were the most affected by the load losses in the past financial year.

The three power stations accounted for 86% of the load losses. Duvha and Matla lost 40% and 37,6% of their capacity respectively in the past financial year.

"It is not as if coal is not there. But the high-quality coal is swayed to the export market at the expense of servicing the needs of local electricity generation," Mr Marokane said.

He said Eskom has entered into discussions with the mining industry on the coal quality.

Mr Marokane said what Eskom pays the mining companies is based on the actual costs that the companies incur "and (is) a fair return commensurate to the risks they have taken".

He said it would be inappropriate for the industry to charge Eskom prices based on the export prices.

"I do not think it will be fair on the South African consumer to have a coal price that is driven by dynamics in another country."

Chamber of Mines spokesman Jabu Maphalala yesterday said the chamber is not involved in the contractual arrangements between Eskom and its members. "Sales of coal by those companies to Eskom are contractual matters between the individual companies and Eskom."