Enforced cuts in power use could cost SA billions

2013-11-21 00:00

CAPE TOWN — Eskom’s command to large industrial electricity users to cut 10% of their consumption could cost South Africa R7 billion.

The government, however, said the costs of not cutting power consumption would be much higher.

Mike Schüssler of Economists.co.za said load shedding in the first quarter of 2008 had reduced South Africa’s Gross Domestic Product by between one and two percent.

But he said the latest developments were not at the same level as the nationwide load shedding in 2008.

“This time it is also later in the year and many factories are not as busy, but I estimate the 10% that large manufacturers must now cut could reduce the GDP by 0,1% and 0,2%. One percent of the GDP amounts to R35 billion, which means the latest load shedding could cost the country R7 billion.”

Mayihlome Tshwete, a spokesperson for the Ministry of Public Enterprises, said the cost implications of doing nothing would be much higher.

He said if the national electricity grid imploded, the repair bill would make R7 billion look like small change.

Tshwete said Eskom was busy with intensive maintenance to prepare for next year’s winter, and this coincided with other unplanned repairs.

“It is like building a roof while it is leaking.”

Tshwete added that Eskom is trying to fix a legacy of underspending in maintenance.

“We are in a tough situation … Eskom and the department are doing what we can to save the situation,” said Tshwete.

Mike Rossouw, the spokesperson for the Energy Intensive Consumer Group, which uses about 44% of South Africa’s electricity, is however, unhappy and said the group wanted to know what the other half was doing to save power.

At this stage, only large consumers have been told to reduce their power use. “What about municipalities and citizens? We have asked Eskom what the other entities have to do and we are still waiting on an answer,” Rossouw said.

Most of Eskom’s power stations are older than a quarter of a century and some are approaching their 40th year. These old power stations can no longer deliver their full capacity.

Eskom said power stations were meant to function at 85% of their capacity. At the moment they are running at 80% of capacity.

Eskom CEO Brian Dames had been warning for two years that the old stations are placing Eskom’s system under a lot of pressure.

At the group’s year-end results in 2012, Dames said the old stations required more maintenance work each year.

“It is, however, difficult to do maintenance work if the system is under pressure. We also have enormous problems with the coal we get from our suppliers and the quality of it. Lower grade coal means less power is being generated.”

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