Eskom swung to profit for the second successive year in 2010/11, reversing losses of up to R9.7 billion made in 2008/09.

The power utility said it was well capitalised at the end of its financial year to March as profit to reinvest in its business more than doubled to R8.4bn from R3.6bn a year ago.

The major drivers of its surplus were the tariff increase implemented on April 1 last year coupled with high demand during the winter months.

Electricity sales were up 2.7 percent to 224 446 gigawatt-hours in 2010/11. This saw the group revenue jump 28.6 percent to R91.4bn.

The high demand was expected to persist with the peak demand forecast at 37 500 megawatts next month compared with 36 970MW last winter. Eskom has generating capacity of 42 000MW but chief executive Brian Dames said the utility would meet the power demand despite tight supplies.

“As we have explained in our quarterly updates on the state of the system, the balance between supply and demand is going to remain tight until 2017, and particularly so for the remainder of this year and 2012,” he said.

The power utility said it had signed power purchase agreements for 373MW with independent power producers, including Sasol, Sappi, Ipsa and Tangent, to secure more power for its grid as part of the parastatal’s independent power producers programme.

It has also contracted municipal generators in Johannesburg and Tshwane to deliver more power to the grid.

The company had increased its coal stocks to 41 days of supply by the end of March compared with 37 days in the similar period last year.

Eskom was working with its large customers on implementing strategies to decrease their electricity usage.

Spokeswoman Hilary Joffe said the utility’s 140 top electricity consuming companies saved 5 percent of their usage because of this initiative. The idea now was to expand this to more businesses.

For households, power alerts produced better results for Eskom. Demand peaks were reduced by 354MW in the year to March mostly as a result of the use of low-energy lights.

The company said its R300bn funding plan was also well on track with approximately 71 percent of the funds already secured.

Group finance director Paul O’Flaherty said Eskom was becoming a far more financially sustainable company

. “The net profits are important and must be seen in the light of the fact that we still have R230bn of debt to raise, which we can do only if we earn sufficient profits to pay off the debt,” he said.

Joffe said infrastructure development was well on track after the delays that were caused by the industrial action at the Medupi plant. - Londiwe Buthelezi