Expect tight energy supply for four years

South Africans can expect tight energy supply for another four years, Public Enterprises Minister Alec Erwin said in Cape Town on Monday. The country’s energy supply problems are no different from those of other developing countries, he told a media briefing in Parliament.

“We are in exactly the same position as every other developing country,” he said.

The current reserve margin is 8%, while the National Energy Regulator wants 16%. The building of gas-fired power stations and co-generation projects is being sped up to ensure that by 2010 the reserve margin is closer to 15%.

A more efficient use of energy should result in a year-on-year growth in demand of between 4,1% and 3,6%, he said. “It was the big jump in peak demand, year-on-year, of just under 5% [that resulted in the crisis].”

The country will not entertain the possibility of constructing another large aluminium smelter the size of Alcan once it has been completed.

The electricity emergency plan is working and has resulted in a “significant” decrease in demand. “It’s clear that business and industry have come to the table. Currently we are saving more than the 10% target, but it’s early days,” said Erwin.

Mining

Efforts to reduce the mining industry’s demand are going “quite well”, and further discussions are under way to see if the 90% of capacity at which the industry is currently operating could be increased.

At least half of the 40 000MW the country expects to be able to generate in the next 20 years will come from nuclear reactors, Erwin said. A Koeberg-type pressure water reactor will not be on stream before 2015, and a pebble-bed modular reactor will not be on line before 2013.

Minister of Minerals and Energy Buyelwa Sonjica said a nuclear strategy will be finalised this year.

Asked if businesses have brought lawsuits against Eskom for lost revenue caused by power cuts, Erwin said this would depend on the contracts they had signed with the company. “Yes, there may be some cases, but I can’t quantify that,” he said.

Mines are guaranteed power by Eskom, failing which they can invoke a “force majeure” clause in their contracts. This was invoked recently, resulting in production being halted and workers being pulled out of the mines.

Contracts with the mines have been redefined, Erwin said, so that Eskom will now supply “firm power”. This involves a guaranteed level of supply with a specified level of advance warning of disruptions.

Cahora Bassa in Mozambique is a “very important supplier” to South Africa at the moment, providing about 1 200MW out of its total capacity of 1 600MW.

Eskom is in “intense negotiations” with other producers of electricity from whom it can buy power. “Clearly we are interested in that,” Erwin said, adding that it is a “significant break” from tradition.

The quickest would be some form of gas-fired power station.

The minister showed his lighter side when asked if there were plans to use South Africa’s four warships, which could each generate about 700KW, to help with supply.

“We’re going to sail them up the Orange [River]. The only problem is getting Namibia’s approval and if we’re going to be able to get all four of them up,” he joked. “No, frankly it will be very difficult to use a navy ship; they have other things to do.”—Sapa

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