http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 16.31Change: -0.01
R/$ = 14.22Change: 0.03
Au 1292.99 $/ozChange: 1.84
Pt 1079.50 $/ozChange: 3.50
 
 
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 Letters About Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 05, 2012

Eskom asked to integrate additional new-build options into tariff submission

Back
Eskom CFO Paul O'Flaherty on the reason for delaying its tariff submission to the National Energy Regulator of South Africa. Camera Work & Editing: Darlene Creamer. Recorded: 5.9.2012.
 
 
 
Africa|CoAL|Energy Intensive User Group|Eskom|Nuclear|Power|Projects|Renewable Energy|Renewable-Energy|Africa|Kusile Power Station|Energy|State-owned Electricity Utility|Dipuo Peters|Eskom|Sanyo R227 Portable Audio Device|South Africa
Africa|CoAL|Eskom|Nuclear|Power|Projects|Renewable Energy|Renewable-Energy|Africa||Energy||||
africa-company|coal|energy-intensive-user-group|eskom|nuclear|power|projects|renewable-energy|renewable-energy-company|africa|kusile-power-station|energy|stateowned-electricity-utility|dipuo-peters|eskom-person|sanyo-r227-portable-audio-device|south-africa-region



State-owned electricity utility Eskom, which was asked by government last week to refrain from delivering its tariff application to the regulator to allow for the inclusion of additional scenarios, has requested clarity as to the precise nature of these new considerations so as to enable it to redraft its request.

The initial deadline for submission to the National Energy Regulator of South Africa (Nersa) had been set for August 31 and CFO Paul O'Flaherty said on Wednesday that Eskom had been more than ready to submit its third multiyear price determination period (MYPD3) documentation, which ran to around 3 000 pages, by that date.

He stressed, too, that Eskom’s “compliant” and “competent” application had been widely canvassed with government and civil society stakeholders.

Nevertheless, O’Flaherty refused to be drawn on the quantum, or the phasing, of the increases being sought, saying only that the application that was meant to have been submitted on Friday had included “double digit” increases over the period.

The utility currently estimated cost-reflective tariffs to be 90c/kWh (real), against prevailing tariffs of around 60c/kWh and the application had been guided by the principle of transitioning towards cost-reflectivity over a five-year horizon, from April 1, 2013 to March 31, 2018. Such a transition was necessary to provide assurance to Eskom bondholders and to the credit ratings agencies that the utility had the standalone capacity to repay the R227-billion of borrowings it was raising to pay for its R323-billion build programme.

It had been reported separately that Eskom would be seeking yearly increases of between 14.6% and 19% over the period, which was likely to meet resistance from stakeholders. The Energy Intensive User Group had already indicated that prices were rising “too fast and too high” for companies to remain globally competitive.

Should the clarifications being sought from government be forthcoming by the end of the week, O’Flaherty said Eskom should be able to redraft its submission by the end of September or early October.

But Nersa, whose consultation timeframes were being curtailed by the delay, had the authority to set a new deadline. At this stage, there was broad-based agreement that the March 15, 2013, deadline for approval by Parliament should not be shifted.

OTHER CONSIDERATIONS

Government was concerned that the MYPD3 application had not catered for likely costs associated with any new Eskom projects beyond the Kusile power station, and had also limited the renewable energy horizon to those associated with the current process to procure 3 725 MW.

O’Flaherty said multiple scenarios had been considered, but Eskom felt it could only submit on the basis of approved projects, or for projects supported by a determination by the Energy Minister Dipuo Peters.

The application had also been informed by an assumption that energy demand would not grow by more than 1.9% a year, which was far below initial estimates of demand expanding by over 3% a year.

In other words, the application was not aligned to the Integrated Resource Plan (IRP2010), which implied additional new build costs that could arise during the MYPD3 period.

In fact, Peters indicated recently that she was poised to make determinations that would to transform the Renewable Energy Independent Power Producer Programme into a rolling procurement process in line with the IRP2010. She was also considering new determinations for the procurement of conventional capacity from independent power producers.

However, O’Flaherty said that, in the absence of these determinations or any “direction” on possible future build options, Eskom had had to make a call on what should be included in the application. Eskom also did not agree with the IRP2010’s demand growth assumptions, which had been a major feature in guiding the application.

“[For instance], it is already to late to expect a nuclear programme in 2023 – it’s too late. It’s also too late to expect that there is going to be 500 MW of new coal in 2014, as the IRP2010 indicates, because there have been no decisions.”

Besides the transition to cost reflectivity, O’Flaherty also confirmed that the MYPD3 had been premised on single-digit increases in primary energy costs and the institution of a mandatory energy conservation scheme.
 

Edited by: Creamer Media Reporter

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Infrastructure News
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
PARTNERSHIP DEAL Helen Botes and Neil Gopal shake hands at the announcement of the property development programme
State-owned company the Johannesburg Property Company (JPC) is partnering with the South African Property Owners Association (Sapoa) in a municipal property development project valued at R12-billion, which aims to enhance the use of municipal-owned land within the...
The success of the Department of Energy’s (DoE) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is a shining example of South Africa’s ability to undertake large infrastructure programmes to boost the local economy, despite the current...
More
 
 
Latest News
Environmental Affairs Minister Edna Molewa
Cabinet has extended the contract of Department of Environmental Affairs (DEA) director-general Nosipho Ngcaba and approved the appointment of Limpho Makotoko as the new DEA COO.     “Under the leadership of Ngcaba, the DEA has consistently received clean and...
Mzwandile Masina
The Department of Trade and Industry (DTI) has invited companies to participate in a trade and investment mission to Ghana and Nigeria from August 8 to 12.   Companies in the agriculture and agroprocessing sectors, built environment professionals, automotive and...
Cabinet has approved the Industrial Policy Action Plan (Ipap) 2016/17 to 2018/19, which seeks to achieve a higher-impact industrial policy in difficult economic circumstances, including the difficulties faced by the domestic steel industry and the drought which has...
More
 
 
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
 
 
 
 
 
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
DOROS HADJIZENONOS The 700-series devices provide network security monitoring, app control, URL filtering, VPN security, antivirus, antispam, antibot, and advanced intrusion prevention and detection functionality
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $149 Close
Subscribe Now for $149