State-owned utility Eskom said on Thursday it had recorded a profit of R6,454-billion for the financial year ending March 2007. If the impact of embedded derivatives is excluded, the profit after tax was R3,4-billion. But at the same time, the group is under severe pressure to increase capacity as economic growth drives energy demand higher.
Increasing demand for electricity drove sales volumes 4,9% higher against a projected growth of 2,3%. The group said its results showed a strong and satisfactory performance and provided a solid platform to drive the capacity expansion programme to 2012.
“Our principal challenges relate to the continued supply of reliable electricity amid the rising demand for energy. We also have to take steps to ensure that the company continues powering economic growth,” said chief executive Jacob Maroga.
Eskom said two new open-cycle gas turbine power stations, near Atlantis and Mossel Bay in the Western Cape, are now in full operation. The previously mothballed stations of Camden, Groot-vlei and Komati Power Stations are being returned to service. It added that 772MW was commissioned this year at Camden, with 190MW commissioned last year. The remaining 600MW will be commissioned by March 2008. To strengthen the ailing transmission network 430km of new power lines have been built.
Over the next five years Eskom will spend R150-billion on capacity expansion, 70% being earmarked for generation, 14% for distribution infrastructure and 14% for the strengthening of the transmission network. It said its current strategy is to fund up to R100-billion in borrowing (local and international) and the balance from its own operations.
“Currently 88% of our generating mix is coal-fired. Given the international climate change imperatives, we plan to reduce the coal component of our optimised portfolio to 70% by 2025. The primary contribution to achieving this will be through nuclear energy. Its contribution to the national grid will rise by up to 20Â 000MW by 2025. Renewable energy production will also increase by an additional 1Â 600MW,” Maroga said.
Construction of Medupi Power Station, the new coal-fired base-load power station in Lephalale, Limpopo, started in May 2007. This station will deliver at least 4Â 500MW to the overall system. Work has also begun on the Ingula pumped storage scheme near Ladysmith, scheduled for completion by 2012 and adding 1Â 332MW to peak electricity demand.
The national demand-side management target has been accelerated to 8Â 000MW over the next 18 years, Eskom said.