State-owned electricity utility Eskom has concluded 11 power buy-back deals with ferrochrome and alloys producers for the period December 1, 2012, through to March 31, 2013, in an effort to create a demand-side cushion for its summer maintenance programme.

The utility is negotiating one further deal and believes that, at the peak of the programme, it will have secured buy-backs of up to 950 MW.

The names of counterparties have not been disclosed, but Eskom confirms that multiple deals have been concluded with some companies to cover their various facilities.

Ferrochrome producers Hernic and Xstrata-Merafe confirmed in December that they are participating in what is Eskom’s second buy-back round. Eskom spent R1.8-billion between December 2011 and May 2012 buying back power from industrial customers.

Spokesperson Hilary Joffe tells Engineering News Online that the deals have been concluded only with companies that have confirmed that customer commitments will be met and that all jobs will be retained.

She says the latest round of buy-backs is deemed necessary because some maintenance was foregone in August and September, owing to the loss of 900 MW of imports from Cahora Bassa and a “volatile generation performance” during the period.

“It is important to catch up that maintenance, otherwise the performance of the plant will continue to deteriorate, creating a downward spiral,” she explains.

The buy-backs will be funded through an existing allocation for demand management programmes and “should have no impact on the tariff”.

Eskom’s budget allocation for all demand response and buy-back programmes stands at just over R2.5-billion for 2012/13.

Joffe reports that, besides the buy-backs, between 100 MW and 480 MW has been secured under its Demand Market Participation scheme, which is drawn down based on customer availability. Another 150 MW has been contracted through its newly implemented Demand Aggregator platform.

Eskom’s goal is to achieve average planned maintenance of 10% over the financial year, but it has achieved 8.7% for the year to date. For the month of December, however, its planned maintenance stood at 13.2%.

The utility acknowledges that it still has a maintenance backlog and that additional units have been added, owing to the constraints faced in August and September.

Eskom’s maintenance budget for the financial year stands at R10.4-billion.

Despite lower-than-expected demand growth, Eskom says it cannot rule out further buy-backs in 2013/14. But any future buy-backs will be based on an “assessment of what is mutually beneficial and what is needed”.