Jan 30, 2012
Eskom still pursuing mandatory savings 'safety net'Back
Construction|Johannesburg|SECURITY|Diesel|Energy|Eskom|Gas|Industrial|Power|Public Enterprises|Safety|Security|System|Turbines|South Africa|Eskom Plant|Security|Energy|Energy Conservation Scheme|Mining|Security|Brian Dames|Malusi Gigaba|Power|Security|Turbines|Diesel
© Reuse this
Providing a power system update in Johannesburg on Monday, CEO Brian Dames said the system would remain constrained for the coming five years, while the maintenance backlog had become unsustainable. Savings were, therefore, needed to create "space" for the utility to implement its proactive maintenance schedule across all of its 58 units.
Eskom was still forecasting a 9 TWh shortfall for 2012, equivalent to the operation of a 1 000 MW power station.
Public Enterprises Minister Malusi Gigaba encouraged corporate South Africa, as well as private citizens, to take voluntarily steps to reduce their demand to ensure system stability and to create room for continued economic growth.
He said catching up on maintenance was "no longer an option".
"Eskom has a highly developed maintenance policy, which is designed to ensure that areas at risk are addressed in order of priority through a consistent schedule of maintenance and inspection work across its fleet of power stations," Gigaba said, warning that any further deferral of maintenance would pose significant risks to the safety of assets and people, while placing security of supply in jeopardy.
Dames said Eskom required greater certainty on demand reductions and would, thus, continue to pursue a mandatory ECS in its negotiations with business and labour at the National Economic Development and Labour Council, or Nedlac.
These discussions had been under way for a number of years and business had continually raised objections to a mandatory scheme, saying it could result in the curtailment of growth and a reduction in jobs.
Dames stressed that such a compulsory scheme would only be deployed as a last resort “safety net”, while also welcoming the voluntary efforts that had already been made to reduce demand.
However, its top 250 customers had, thus far, only managed to reduce their demand by 1% against a 2007 baseline, even though Eskom's 95 leading industrial customers had achieved average savings of 6.9% against that baseline.
In fact, some mining companies had already breached the 10% savings level and would not be asked to make further mandatory cuts should it be agreed that the ECS be made compulsory.
Overall, Eskom's top customer grouping also included entities, such as the large municipalities, that had not made much progress in reducing demand.
Dames warned that 2012 would be “particularly tight”, owing to the fact that no new major supply would be introduced while demand was still increasing, albeit at a slower rate than initially anticipated.
Demand had returned to 2007 levels, with the summer daily peak of just over 30 000 MW and winter demand likely to peak at above 37 000 MW.
Further, the first unit of the coal-fired Medupi power station, which was under construction in Limpopo, would not be introduced during 2012 as initially envisaged. In fact, Dames indicated that the first unit was currently only scheduled to be introduced late in 2013, but that efforts were being made to align the schedule to the first quarter of 2013 schedule outlined in the Integrated Resource Plan, or IRP, for electricity.
In the meantime, much of Eskom's attention had turned to the reliability of the existing fleet, much of which was approaching 30 years.
There was a need to accelerate maintenance efforts at a rate of around 10% of installed capacity during the summer maintenance peak. But owing to the supply constraints, Eskom had been failing to introduce outages as planned and was shifting maintenance out in a bid to keep the lights on. This was increasing the vulnerability of the system to unplanned outages in the longer term and was thus “unsustainable”.
Besides the focus on the ECS and its maintenance programme, Eskom was also pursuing a range of other demand- and supply-side interventions to shore up supply ahead of the introduction of capacity from Medupi and Kusile.
It was interrogating various importation options from the region, including the prospect of importing natural gas from countries such as Mozambique, possibly for use in its gas turbines at Mossel Bay and Atlantis, in the Western Cape. Currently these open-cycle gas-turbines (OCGTs) were fuelled using diesel and were, thus, a significant cost contributor.
On average Eskom produced electricity at a cost of 38c/kWh. But the cost of production at the OCGT plants was between 150c/kWh and 250c/kWh, depending on the diesel price.
The utility was also procuring all available power from non-Eskom sources, having secured 1 000 MW of such capacity from independent power producers and municipalities.
It was also moving ahead with demand-side management schemes and had entered into agreements with large customers to enable it to buy back power in times of system distress.
It was also in the final stages of implementing an innovative demand aggregation model and hoped to have some 500 MW of such buy-backs available by winter 2012.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines
Other Electricity News
Article contains comments
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of 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 steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
This Week's Magazine
There is enough water in South Africa to supply communities and the economy, even if some activities may be constrained, such as agriculture in the Limpopo, says National Planning Commission commissioner Mike Muller. Muller was also the director-general from 1997...
South African antenna designer and producer Poynting and provider of professional products, system integration and implementation and commissioning services for the broadcast and telecommunications markets in South Africa, African Union Communications (Aucom),...
Industrial automation giant Festo has been displaying some of the its ongoing research projects and latest automation developments and products at the Hannover industrial fair from April 7 to 11, as part of its Integrated Automation – The Next Steps theme. The...
South African retail companies are responding to the way in which e-commerce is changing their engagement model with customers by improving customer engagement channels and order fulfilment intelligence, says industrial and retail software company JDA Europe, Middle...
In support of the South African government’s mandate to create more jobs and promote sustainable development, multilevel marketing company Amway’ business model aims to assist government in easing the startup of business and encourage an entrepreneurial mindset...