Eskom woes continue

2012-08-18 15:28

Eskom is once again facing power shortages. In the next six years, the power utility will have 40 million tons too little coal for its yearly needs.

These shortages are the result of shrinking coal reserves in Mpumalanga, which must be urgently supplemented by coal from the Waterberg, where 70 billion tons of shallow coal reserves are lying between Lephalale and the Botswana border.

The shortages will increase rapidly each year after 2018 because of the shrinking coal reserves in Mpumalanga. By 2040, only five of the 13 Mpumalanga power stations will still have coal.

The transport cost to the province will total between R100 and R200 per ton, which means that coal will cost between 50% and 100% more than the R209 that Eskom now pays to mines that are mostly situated next to the power stations.

Ultimately, consumers will have to bear these costs.

Railway lines are now hurriedly being constructed to the Waterberg in Mpumalanga, but the only long-term solution is to build more power stations at Medupi and Matimba in the Waterberg, where half of the country’s remaining coal sources are situated.

Last month, Eskom asked for information from the 15 owners about how much coal they can make available for the Mpumalanga power stations.

Exxaro, the only one of the 15 mineral-rights owners that produces coal, said it was prepared to supply two million tons yearly by 2014, rising to 30 million or even 40 million tons by 2018, depending on Eskom’s specifications.

Transnet has committed itself to increase the carriage capacity of the railway line to 23 million tons a year by 2016, ultimately pushing it up to 80 million tons, partly to make provision for coal exports from Botswana.

The Electricity Regulation Bill and the Independent System Operator Bill, which will remove control of the country’s power network from Eskom so that independent operators can also use the power network, have been dragging on for three years already.

The building of private power stations can’t start until these are finalised. It is becoming increasingly obvious that independent power generators are the key to the country’s energy problems.

There are also enormous frustrations in the mining industry because Eskom is buying electricity back from chrome smelters.

This brought half of the ferrochrome industry to a standstill this winter and resulted in South Africa losing a major market share to China.

“How can Eskom be proud of us going through the winter without any power failures when in fact there was commercialised power sharing?” a role player in the ferrochrome industry asked.

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