Call to turn off smelters

2015-04-20 00:00

AN agreement must be reached with BHP Billiton to switch off its aluminium ­smelters near Richards Bay and Maputo for three years to help Eskom.

The two smelters together consume some 1 300 megawatts of Eskom’s current possible power supply and if BHP Billiton agrees to mothball these smelters, it will remove the need for phase 1 load shedding.

The DA shadow minister of energy Pieter van Dalen made this proposal yesterday in a letter to the chair of the portfolio committee for energy, Fikile Majola.

Van Dalen said he had discussed the proposal with all the other members of the portfolio committee, including Majola and the ANC. “Everyone wants to discuss the matter,” he said yesterday.

Apart from being paid to stop, three years could be added to the current duration of the contracts.

Economists reckon load shedding is costing South Africa between R20 billion to R60 billion a month, a substantial part of this cost spent on diesel to drive ­Eskom’s open cycle gas turbines at Mossel Bay and Atlantis.

According to a report for the SA Institute for Race Relations by engineer and energy expert Andrew Kenny, the diesel costs of running the diesel-driven turbines increased from R5 billion in 2013 to R10,9 billion in 2014.

“This is a very large amount of money for a relatively small amount of electricity,” wrote Kenny.

Each time the diesel supply runs short, Eskom has to announce load shedding.

Van Dalen said switching off the ­smelters can free up 1 300 megwatts for South Africa and save billions in diesel, which could be used to recompense BHP Billiton.

In 2012, Eskom had applied to Nersa to reconsider the validity of the ­contracts for the aluminium smelters on the grounds that the low price paid for electricity by the smelters discriminate against other users.

Nersa has not done anything on the ­application, possibly because there are doubts on the validity of any legal ­arguments to cancel the contracts.

The new CEO of Eskom, Brian Molefe, said he views the aluminium smelters as a priority in his mandate to bring load shedding under control.

Van Dalen said Eskom can build gas ­generators in Maputo and Richards Bay during this time to supply the two ­aluminium smelters with power when they are switched on after three years.

This would be more efficient than ­current plans by ­Eskom and Sasol to buy and pipe Mozambique’s gas to Atlantis and Mossel Bay in the Western Cape, said Van Dalen. Mozambique has enormous gas fields which are yet to be tapped.

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