sa could face another decade of power cuts, energy consultant warns
24 April 2008
 
South Africa could be dogged by blackouts for "at least another ten years", an energy consultant warned.
This was the time that it would take for the country to build up the 15% reserve margin required for a stable power supply, based on modest economic growth forecasts, independent energy consultant Andrew Kenny said.  And, by the time they were commissioned from 2012, electricity demand would have grown significantly.

"If all of these projects are built according to plan, and we have economic growth of from 4% to 5%, in nine-years time we will be slightly worse off than we are now," cautioned Kenny.
He said that the prospect of the economy slowing down because of the lack of power supplies could reduce demand. Meanwhile, Kenny said that "the idea of the Coega aluminium smelter is absolutely absurd", taking the electricity situation into account. Diversified mining house Rio Tinto picked up the project when it bought aluminium producer Alcan last year. The Canada-based company had said that it could start production at the $3,25-billion project in 2010.

However, last month, Rio Tinto said that it would put the smelter on the back burner until South Africa had pulled itself out of the power quandary.  Kenny said that Eskom would be selling the power to the smelter for less than what it costs to produce.  Economists.co.za director Mike Schussler was also scathing of Eskom selling power below its production costs.
He argued that the power firm sold one-third of its electricity below the cost of production.

"For more than 11 years, Eskom has sold electricity at below cost to international customers," Schussler stated, adding that the ‘absolute' loss for this period was R3,3-billion. However, the utility had lost about R10-billion over this period, if the loss of commercial revenue was factored in. Eskom ran out of excess capacity in January, when it forced the mining industry to close for five days. Since then, it has embarked on a programme of scheduled load shedding, asking its customers to reduce their power use by 10%.

Matthew Hill,  www.engineeringnews.co.za