/ 2 October 2009

Eskom: System under pressure as power demand rises

SA's power demand has risen back to the highs before the start of the economic slowdown, Eskom said on Friday.

South Africa’s power demand has risen back to the highs before the start of the economic slowdown after slumping to levels last seen in 2005, Eskom said on Friday.

Eskom has been rationing power since early last year when the national grid nearly collapsed, forcing mines and smelters to shut for days and costing the biggest economy in Africa billions of dollars.

Spokesperson Andrew Etzinger said the utility was able to meet demand for now, but the situation was of ”increasing concern”.

”We’ve seen a steady increase in electricity demand over the past three months as large mines and smelters have returned to full production … we have basically seen a full return of the demand to levels seen prior to the global economic crisis.”

The utility has launched a R385-billion expansion programme to boost supply, but says it will take years before new power plants can be added to the system.

Eskom has temporarily benefited from a 4,2% drop in demand owing to the recession, but large industrial consumers have resumed suspended operations, straining supply.

Etzinger said the utility expects demand to rise further by between 2% and 3% in the current financial year to March.

”The demand is steadily increasing and is putting our system under pressure … it means our system is more vulnerable to incidents.”

Etzinger said the risk of load shedding, or enforced power cuts, was low in the immediate term but there was an increasing risk for the need to run open-cycle gas turbines, which is more expensive than its coal-fired power plants, to boost supply.

Eskom posted the biggest full-year loss in the company’s history for the year to end-March, partially because of the need to purchase coal on expensive short-term contracts during the power crisis last year.

The use of turbines could further strain its balance sheet.

”It’s not just the case of keeping the lights burning, but keeping the lights burning at a cost which is affordable to the country … we can’t afford to run the gas turbines on a continuous basis,” the spokesperson said. — Reuters