Blackouts loom with Eskom on the brink

Published Nov 3, 2014

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Johannesburg - Rolling power blackouts may continue across South Africa this week even as Eskom said electricity cuts today were improbable after it partly restored coal supply to its second-biggest plant.

Eskom, which supplies almost all of the country’s power, restored about 1 200 megawatts of capacity at its Majuba plant today, Andrew Etzinger, spokesman for the Johannesburg-based utility, said on broadcaster eNCA today.

Coal to all of the company’s six generation units was cut on November 1 after a silo cracked and collapsed onto a conveyer, forcing it to reduce electricity to customers, Eskom said yesterday.

“At the early part of the evening, we may be vulnerable,” Etzinger said, referring to the peak usage period of 6pm to 8pm.

Eskom expects to “restore coal supply to another third of the power station” by tomorrow, he said.

Cash-strapped Eskom was earlier this year forced to implement managed blackouts in the continent’s second-largest economy for the first time since 2008 as it struggles to meet demand with an aging fleet.

Large industrial users including steelmaker ArcelorMittal’s local unit and BHP Billiton, the world’s biggest mining company, are required to reduce demand to avoid a total collapse of the grid.

“It is very likely that load shedding will continue for the week,” Steve Lennon, the utility’s group executive for sustainability, told reporters yesterday in Johannesburg, using the local term for electricity cuts.

Scheduled reductions are most probable over evening peaks and throughout November 6, he said.

“If we can avoid any of that then we will.”

 

Majuba Arrangements

 

Eskom has arranged trucks to bring supply to two of the three feeders at Majuba, running at 16 vehicles per hour per feeder, group generation executive Thava Govender said yesterday.

Units 1 and 2 share a feeder as do units 5 and 6, he said.

Unit 4 was out for maintenance and unit 3 will eventually be cross-fed using supplies to the other boilers, he said.

The utility plans to get units 2 and 6 to full capacity, followed by all others except unit 4, raising capability to 2 400 megawatts this week.

“The severity of the situation is becoming more apparent now to the whole country,” Shaun Nel, a spokesman for the Energy Intensive Users Group, which represents more than 30 industrial customers that consume about 44 percent of the power generated, including fuel producer Sasol and Harmony Gold Mining, said today by phone.

“It’s really, really dire.”

 

Majuba Size

 

The 13 year-old Majuba facility, in the eastern Mpumalanga province, has installed capacity of 4 110 megawatts, making it South Africa’s biggest plant after the 4 116-megawatt Kendal facility, according to Eskom’s website.

Eskom’s construction of two more coal-fired plants of about 4 800 megawatts each, to be Africa’s largest, has been beset by delays.

One megawatt is enough to power about 200 middle-income South African homes at peak times, Etzinger said in March.

While the utility has installed capacity of 41 995 megawatts across its 27 power plants, which have an average age of 32 years, about 24 percent of that is out for both planned and unplanned maintenance.

“Eskom has zero reserve margin and hence any incident now threatens power supply,” Anton Eberhard, a National Planning Commission member and professor at the University of Cape Town’s Graduate School of Business, said yesterday by e-mail.

“It’s not easy to turn this situation around. This crisis points to the need to consider structural changes to the power market and greater opportunities for private players.”

South Africa will raise at least 20 billion rand by selling shares in listed companies, stakes in state-owned entities and real estate to finance a bailout for Eskom, which has to plug a 225 billion-rand cashflow gap over the five years through March 2018, the National Treasury said last month.

Power tariffs will rise an average 13 percent from April, more than the 8 percent planned, to help the company recover 7.8 billion rand of unbudgeted costs incurred in the three years through March 2013, the national energy regulator said in October.

The inflation rate was 5.9 percent in September. - Bloomberg News

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