Eskom swings back towards coal

Johannesburg – South Africa’s next base load power station could be another coal-fired plant. This follows the decision to cancel construction of Nuclear-1, the nuclear station originally scheduled to be built by 2016.


That’s according to Eskom CEO Jacob Maroga, who gave a media presentation on Friday updating Eskom’s power system and building programme.


He was speaking a day ahead of the anniversary of Eskom’s decision on January 24 2008 to declare force majeure on its major customers and shut down the SA mining industry because it could not supply power.


Eskom is building two new coal-fired stations, Medupi and Kusile, each of which will be able to generate about 4 800 Megawatts of electricity.


The next base load station was supposed to be Nuclear-1, for which Eskom was considering bids from consortiums led by Areva and Westinghouse.


Eskom decided to scrap Nuclear-1 in December, citing the likely costs involved. The decision on the future of South Africa’s nuclear programme now rests with government.


Maroga said: “Our commitment to nuclear energy remains very strong but the issue concerns timing, given the slowdown in growth in the global economy.


Eskom ‘still at risk’

“We have a number of months during which to review our assumptions and tie down a date for the next base load station. It could well be that the next base load station is coal-fired.”


Maroga confirmed that the economic slowdown had sharply reduced electricity demand in South Africa and he expected lower power demand levels to last for several years.


He said Eskom expected a 3% drop in energy sales for its financial year to end-March. He forecast power demand would be “flat” during Eskom’s 2010 financial year and that it might grow by “1% or 2%” annually during the next two financial years.


Maroga confirmed that power demand had dropped by “at least” 1 500MW because of the shutting down of various ferro-alloy and stainless steel smelters.  He said the spare power could not be allocated to other users at this stage. This was because of uncertainty over when global economic conditions would improve and the smelters would need the power again.  Maroga said that overall Eskom was in a far better position than it found itself in at the beginning of 2008, but added “we are still at risk”.


He commented the building programme under way at a total cost of R227bn – consisting of Medupi, Kusile and the Ingula pump storage scheme – would meet Eskom’s 10% generating reserve margin target by 2015.


Maroga has stated on a number of occasions that Eskom needed a 15% generating reserve margin before management could feel comfortable that it could deal with any power supply problems.  Asked whether this had been modified, Maroga replied 15% remained the target but he would not specify when Eskom expected to achieve it.


Article by Brendan Ryan, courtesy of Fin24 website


Friday, January 23rd, 2009 - News

 
   
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