SA ‘must find solution to unsustainable Eskom’

SOUTH Africa had to accept that state power utility Eskom was not sustainable and figure out what to do about that‚ Business Unity SA (Busa) CEO Cas Coovadia said on Thursday.

Eskom‚ which last week resorted to load shedding for the first time in six years‚ warned consumers last year that the National Energy Regulator of SA’s (Nersa’s) refusal to allow it to hike electricity tariffs 16% — Nersa approved 8% a year until 2018 — would have negative consequences. Eskom has completely blown its R2.5bn gas budget for running open-cycle gas turbines — it has spent R10bn so far this year.

South Africa has been on a tight power supply since load shedding in 2008 cost the economy billions of rand as demand outstripped supply.

“We (South Africans) are not talking about the fundamental issues‚ and this is one of the fundamental issues. Let’s accept that Eskom is not sustainable (and decide) what do we do about it‚” Mr Coovadia said at a media briefing in Johannesburg after Busa met Eskom over the energy crisis.

While Finance Minister Pravin Gordhan this week downplayed the crisis‚ he has previously said South Africa’s tight energy supply had been damaging the economy.

Eskom CE Brian Dames‚ who leaves the utility at month-end‚ said there was “no new rocket science” to fix South Africa’s energy problems‚ but if the utility’s customers — commercial and domestic — saved 10% of electricity used‚ South Africa would have a sustainable energy system.

Eskom was completing a R385bn capacity build programme‚ but wants to secure more funding‚ possibly surpassing a trillion rand‚ by 2026. Since the programme started in 2005‚ an additional 4‚453.5MW has been commissioned.

The plan is to deliver an additional 16‚304MW in power station capacity by 2017‚ but some projects have experienced delays — notably the 4‚800MW Medupi and Kusile power stations.

Mr Dames said there were steps to be taken on the supply side of Eskom’s business too‚ including efficiency at Eskom itself‚ better arrangements with independent power producers and short-term contractors and improved coal quality for its coal-fired power stations.

Eskom says many factors led to last week’s load shedding. The last straw‚ however‚ was the poor quality of coal miner BHP Billiton delivered to its Kendal power station. Fine‚ wet coal accounted for the loss of 400MW while “trips due to empty coal bunkers” shut down four units at the power station on Thursday night‚ according to Eskom.

BHP Billiton spokeswoman Lulu Letlape on Tuesday declined to answer questions from Business Day on the contractual specifications for the coal supplied to Kendal or on quality-control systems. - Sue Blaine © BDlive 2013