/ 2 April 2008

Eskom urges reduction in demand for power

South Africa’s power crisis may last many years unless there is a drop in demand for electricity, utility Eskom said on Wednesday.

A reduction in consumption should not damage the economy, it added.

Eskom is rationing power to households and reduced supply to big industrial customers from January after the energy grid came close to collapse.

The country’s key mining sector, which includes the world’s biggest platinum mines, is operating at 95% power supply.

Eskom CEO Jacob Maroga said South Africans could not only rely on efforts to boost capacity, and had to find ways to cut demand.

”If we only rely on [an increase in supply], the numbers are not looking good for many years,” he told reporters, adding that reducing demand would not damage economic growth.

”Reducing energy consumption should not slow down the GDP growth.”

However, the utility would welcome delays of major energy-intensive projects and developments, including smelters.

Maroga also said the company was in talks with mining companies on proposed electricity price increases after it requested that the energy regulator approve a 53% tariff increase this year.

The proposed price hike, aimed to help finance spending of R343-billion over the next five years to boost capacity, has been widely criticised and could add significantly to costs in a mining sector that has already been forced to lower output due to power constraints.

”We may have to raise our appetite for price,” Maroga said, without giving further details on the talks with the mining sector, one of the cornerstones of the economy.

Power stations had about 12 days’ stockpiles of coal, he added. A shortage of coal, and ageing infrastructure at the company’s power plants, has been a major cause of unplanned power cuts, leading to a scramble to secure more supplies.

More power

Meanwhile, Eskom has confirmed that it is negotiating to buy more electricity from Mozambique’s Cahora Bassa Dam.

The utility’s spokesperson, Andrew Etzinger, said on Wednesday that any additional power would, however, be available on ”a limited basis only”, because of maintenance requirements and constraints on transmission to South Africa.

He said there were five generators at Cahora Bassa, situated in Mozambique’s northern province of Tete.

”We currently draw power from four of them on a continuous basis at any time, up to 1 450MW in total,” he said.

”We are in discussions to buy power from the fifth generator when available.”

Eskom’s existing maximum generating capacity was 39 600MW, he said.

The additional power being sought from Cahora Bassa would be less than 1% of this, ”but every bit helps”.

The price of existing power from Cahora Bassa was attractive, he said. — Reuters, Sapa