May 15, 2008
Eskom seeks regulator approval to double DSM budgetBack
© Reuse this Capacity constrained power utility Eskom has asked the National Energy Regulator of South Africa (Nersa) to more-than-double the amount of money it can claim back from government for its demand-side management (DSM) programme for this financial year to R2,5-billion, an official said this week.
Eskom DSM GM Andrew Etzinger conceded that the firm was taking financial strain, but, in fact, planned on expanding its DSM programme.
"According to the regulator, we have a budget of R400-million, which we have extended internally to R1,2-billion for our current financial year," he said in an interview.
"We would want to extend that from about R1,2-billion to about R2,5-billion, so there's a substantial increase that we've asked for, which is part of our price increase application to the regulator."
Etzinger said that the reason that Eskom had suspended the signing on of new DSM projects earlier this year was because it had already allocated the full R1,2-billion.
This stood in contrast to what another DSM manager, Monkwe Mpye, told Engineering News Online on May 5.
He said that new DSM projects had been put on ice because of "cash-flow issues" stemming from soaring coal and diesel prices.
"It's certainly not the case that we have diverted costs from our DSM programme to buy coal," Etzinger asserted. "If anything, we have overextended ourselves on the DSM programme, which poses a risk if we don't get permission from the regulator to recover these costs - it will come off Eskom's bottom line."
"We're out on a limb because of our DSM acceleration," he added.
But South African Association of Energy Service Companies (Escos) president Ken Gram believed Eskom's current DSM programme "is the single biggest hindrances to saving energy in this country".
He said in a telephone interview that getting DSM projects approved through Eskom's system took up to two years.
He specifically mentioned an Esco that had finally reached agreements on three or four DSM projects this year, only to be told by Eskom that it would not sign on any new projects until June.
Gram said that the World Bank had recommended to Eskom that it change its approach to DSM to making a "standard offer".
He explained that this would greatly simplify processes, as the utility would then pay customers a set amount for each MW that they removed from the grid.
Etzinger said that this was what Eskom had applied to Nersa for.
He stated that the current environment was vastly different to what it was about five years ago, when the utility adopted its DSM policies.
"At the time, our priority was on load shifting and not energy efficiency, those have changed dramatically," Etzinger said. "We need 3 000 MW of DSM to be implemented immediately."
Secondly, he believed that Eskom's focus must shift to energy efficiency, rather than shifting power use from peak usage times.
"Both in terms of how projects are evaluated, the extent to which they are funded and are prioritised between energy efficiency and load management - all of that needs to change," Etzinger noted.
"We need to vastly accelerate the evaluation and approval stage for projects brought to us, and this is where the standard offer comes into its own."
He said that Eskom now wanted to get prior approval for standard types of projects.
"Where we can achieve economies of scale, we really must," stated Etzinger.
He said that the power parastatal hoped to hear from the regulator "shortly" on what the new DSM policy looked like.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Video News
Updated 3 hours ago A number of foreign nationals that were displaced as a result of xenophobia-driven violence across Johannesburg and Durban’s inner city and township areas have started returning to their adoptive communities, the Inter-Ministerial Committee (IMC) on Migration...
Updated 3 hours ago South Africa will likely raise its 2015 maize output forecast after rains in crop-producing areas boosted production and yields, a survey of trading firms by Reuters showed on Tuesday. The government's Crop Estimates Committee (CEC) has previously forecast that the...
Updated 3 hours ago The Square Kilometre Array (SKA) Organisation and Amazon Web Services (AWS) have partnered to launch the ‘AstroCompute in the Cloud’ grant programme to attract innovative tools and techniques to process, store and analyse the global astronomy community’s vast amounts...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.