/ 5 March 2008

SA building projects may face power delay

South African power firm Eskom may delay approval for connecting new construction projects that are bigger than a residential home to its grid for up to six months in a bid to alleviate a power crisis, it said on Wednesday.

The crisis forced a shutdown of crucial mines for five days in January and since then mines have been operating with only 90% of their usual power, raising fears of massive job losses and helping keep global prices for precious metals high.

The electricity shortages, the result of nearly a decade of under-spending on generating capacity, have also brought concerns that economic growth could stumble ahead of the 2010 Soccer World Cup, which South Africa is hosting.

Eskom said approval for new power connections to construction projects requiring more than 100 kilo volt-ampere (kVA) may take four to six months.

A spokesperson said a building project requiring electricity to power two water heaters, lighting and under-floor heating would need about 100 kVA — which could include almost anything except residential developments or the smallest businesses.

”New applications that require more than 100 kVAs will have to be processed, and that process will take four to six months and it’s a rolling four to six months before they give you a quotation,” an Eskom spokesperson said.

”Someone who’s building something small, which requires less than 100kVAs, those are not a problem, that goes on,” she added.

However, Eskom denied that it was halting all new construction projects bigger than a residential development.

”Eskom is not stopping any developments,” the utility said in a statement following the release of reports that new townhouse complexes, petrol stations, factories and all other construction projects where electricity provision needs to be obtained from Eskom in advance would be delayed.

”All those developments that have already applied and have quotations will be honoured — Gautrain and the 2010 World Cup are projects that have already been approved and are thus not affected,” Eskom said.

However, in clarifying the process with regard to new developments, the utility confirmed that it would take it between four to six months to process the application and give the applicant a quote.

It said this would apply to all developments for buildings requiring above 100kVA.

The government said separately that Eskom has opened bids for industrial users, like fuels group Sasol, to generate electricity from waste heat produced in their manufacturing processes.

That could generate an additional 3 500MW, Ompi Aphane, chief director of electricity at the Department of Minerals and Energy, told a parliamentary briefing in Cape Town.

To stabilise the system, South Africa needs an additional 4 000MW now, but will need much more in future to be able to maintain economic growth.

State-owned Eskom plans to spend R343-billion increasing its generating capacity over the next five years and has invited bids for a new nuclear power station.

Beeld reported that as part of new measures aimed at alleviating the power crunch, households in Gauteng’s industrial heartland around Johannesburg will also face power rationing every second day.

Gold Fields, the world’s fourth-largest gold miner, has warned it could cut 6 900 jobs and the government said it will give details of a mining and job losses review on Friday.

Powerful unions have threatened protests if there are job cuts. — Reuters, I-Net Bridge