http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.22Change: -0.23
R/$ = 11.16Change: -0.09
Au 1240.10 $/ozChange: -4.17
Pt 1243.50 $/ozChange: -18.70
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 05, 2009

Eskom plans to use economic downturn to reduce capital costs

Back
Africa|Environment|Eskom|Nuclear|PROJECT|Projects|Africa|South Africa|Energy|Nuclear|Wind Energy|Braam Conradie|Power|Rail|Maryland
Africa|Environment|Eskom|Nuclear|PROJECT|Projects|Africa||Energy|Nuclear|Wind Energy|Power|Rail|
africa-company|environment|eskom|nuclear-company|project|projects|africa|south-africa|energy|nuclear-industry-term|wind-energy|braam-conradie|power|rail|maryland
© Reuse this



Changes in market conditions present a significant opportunity for Eskom to reduce the capital costs of its new build programme, acting MD of the enterprises division Braam Conradie told delegates at the South African National Energy Association (Sanea) Action for Energy conference on Friday.

Eskom was spending R385-billion on its capital expansion projects over a five-year period, with Conradie noting that this formed an integral part of government’s response to the global economic crisis.

The power utility was planning to make good use of the economic downturn, he noted, saying that it was expecting to get better prices from suppliers and that it would also try to renegotiate certain contracts.

Eskom would look for savings everywhere, including its capital expenditure and its operating expenditure, with Conradie noting that “everything is up for debate”. He admitted that there would be some offsetting factors, such as the price of equity.

This meant that there could be some decreases in some costs and some increases in others, but he emphasised that the utility was obligated to look at every opportunity.

Conradie said that Eskom was still experiencing a funding problem and that a number of variables could impact on whether it delays any further projects.

Eskom had already delayed some of its projects, including a wind energy project, the Majuba rail project, the Tubatse pumped-storage project and its Nuclear 1 project, owing to the economic environment.

He explained that Eskom obtained its funding from three sources, namely debt, equity and tariffs. The extent to which it would be able to close its funding gap with the contribution from these three sources would be a key consideration in deciding if any other projects had to be delayed.

Everything was a trade off between what it could afford and what it could not afford, he noted.

The average wholesale price of electricity was 16c/kWh in the previous financial year, while the cost of producing electricity at its new Medupi and Kusile power stations would be at least three times that amount.

The utility would have to fund these higher costs somehow.

Conradie asserted that ultimately all these costs would have to be funded through tariffs, saying that debt and equity would only provide additional time for tariffs to be increased.

Eskom has made an application with the National Energy Regulator of South Africa (Nersa) for an interim tariff increase of 34%.

Public hearings on the matter would be held on Monday and Tuesday.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 1 hour 4 minutes ago The Cape Town International Convention Centre (CTICC) has outperformed its targets over the past financial year and contributed R3.1-billion to the gross domestic product in the 2013/14 financial year. CTICC CEO Julie-May Ellingson said the convention centre had been...
Public Enterprises Minister Lynne Brown
Updated 1 hour 43 minutes ago Public Enterprises Minister Lynne Brown has released details of the remuneration of the chairpersons and nonexecutive directors of the various State-owned company boards falling under her Ministry. The remuneration figures, which are attached, are based on figures...
Updated 1 hour 59 minutes ago Installed wind power capacity could swell by 530% to 2,000 gigawatts (GW) by 2030, supplying up to 19% of global electricity, a report from a trade association and Greenpeace said on Tuesday. It said installed wind energy capacity totalled 318 GW at the end of last...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
IAN EVANS AirWatch file synchronisation and sharing system was initially designed for a large airline company
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks