/ 14 November 2008

Eskom has enough coal for next few months’ power

South Africa has enough coal to help ensure electricity supply is enough for the next few months, Andrew Etzinger, a senior manager at Eskom, said on Thursday.

Etzinger said Eskom, which provides 95% of South Africa’s power, most of it from coal-fired generators, had average coal stockpiles of 35 days, enough to avoid deep power cuts as experienced earlier this year.

The National Energy Regulator of South Africa said in May that Eskom had allowed coal stockpiles to decline to unacceptably low levels and was reluctant to buy more coal due to the high cost.

”Coal stock piles are at 35 days. That is considered to be an adequate supply for the short term, the next couple of months,” Etzinger told Reuters on the sidelines of an energy conference.

Etzinger said the utility is running at a reserve margin or spare capacity of 6%, above the negative margin that forced it to trim demand through power cuts or ”load shedding” in January. The power cuts hit mining output, and helped send precious metal prices to fresh records.

But a 6% margin was still not enough, he said.

”We need it to be at 15% to avoid the risk of load shedding from one day to the next,” he said.

Getting to 15% would depend on how long it takes to reduce electricity demand by 10%, he said. The utility has agreed voluntary cuts with big power users to reduce their demand by up to 10% of their normal power requirements.

Brigitte Mabandla, the new minister for public enterprises, which controls Eskom, told Reuters late last month that there was a risk of power blackouts unless more energy was saved.

She said savings on a voluntary basis were at 2%.

Under a new programme starting from January next year, consumers using more than the required limit of 90% would face tariff penalties, the government has said.

”It all depends on how long it takes to get the legislation in place, to get all of us consumers to do the 10% saving. Realistically, we would expect that it would take until several years into the future,” he said.

Etzinger said the country could not accelerate the production of new supply, limited by resources and financial constraints.

”That means that until 2012 we won’t see the supply side really making a difference in terms of additional capacity,” he said.

Etzinger said Eskom had also reduced its power exports to the 1 500 megawatts it is bound by contracts to supply to its neighbours. That compared to around 1 500 megawatts the utility imports, he said. – Reuters