Is the rolling blackout becoming a way of life? And what will that mean for ordinary consumers – not to mention industries that rely on assured energy supply, or at least plans to steadily increase the deficit that many suffer under right now? Responses from the Ministry of Public Enterprises, and Jacob Zuma himself, are not reassuring, a warning that prospective investors are taking to heart and pocket very seriously indeed. Peter Wilhelm
By André Janse van Vuuren
(Bloomberg) — SA’s state power utility hasn’t lined up enough coal supplies to meet its generation needs beyond 2016. This in a country already suffering rolling blackouts.
Demand from Eskom Holdings SOC Ltd’s power stations in eastern Mpumalanga province, where much of the fuel is produced, will in 2017 be 17-million metric tons higher than contracts so far agreed with coal companies, Minister of Public Enterprises Lynne Brown said Wednesday in an e-mailed reply to queries from lawmakers.
She added: “The available Eskom-grade coal in Mpumalanga exceeds” 5-trillion tons, which is enough to meet demand. “The coal is available in Mpumalanga.” However, availability in the ground requires investments and :”Eskom is in discussion with relevant parties.”
Eskom supplies 95 percent of South African power and four-fifths of that is generated by burning coal. The company is battling to meet demand after delays in building new power stations and as aging plants suffer from breakdowns. That failure of planning would appear to lie at the heart of a future shortage of supplies. So what to do?
A government model had shown power shortages may persist for two to three years and Eskom had been instructed to accelerate the completion of new generation projects, President Jacob Zuma said.
“Eskom is implementing a structured planned maintenance programme to ensure the availability of all power stations is improved,” he told lawmakers in Cape Town on Wednesday. “It must be noted that Eskom added 160,000 households to the electricity grid in the past financial year, which added to the demand for electricity.”
The emphasis on the social as opposed to the practical is unlikely to satisfy those who depend on smooth and secured electricity supplies. Coal producers in SA including Glencore Plc and Anglo American Plc are both scaling back output — or selling stakes in mines as the price of the fuel slumped 22 percent in the past year.
Eskom has so far contracted 899-million tons for delivery from 2016 to 2030, Brown assured. However, some supply contracts need to be renegotiated, Khulu Phasiwe, a spokesman for the utility, said by phone.
