Economy held to ransom until Medupi gets going

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When Eskom held its state of the system briefing a week ago, the situation looked more upbeat this winter considering that it had secured more power supply capacity from short-term independent power producers (IPPs) than last year, availed more generating units for electricity production and for the first time had renewable energy IPPs to supply power during the day.

Six days later, South Africa plunged back to darkness.

Eskom had not ruled out load shedding when it held its state of the system briefing but looking at how this winter’s events played out, it is clear that planning is becoming problematic for Eskom’s ageing power generation fleet.

The utility is constantly balancing its planned maintenance against unplanned maintenance but there is no telling when unplanned outages will strike.

This means that even though Eskom has units that have capacity to generate 36 000 megawatts (MW) during the day, that can change when it needs those units to beat the evening peak.

On Wednesday night, it took only two units down from both Duvha and Kendal power stations to put the utility in a crisis mode. And when some capacity from Cohara Bassa in Mozambique became unavailable, lights went off.

So the question was: is South Africa over-reliant on the Cohara Bassa supply?

But analysts said the problems had more to do with South Africa’s tight reserve margin that typically fluctuates between zero and 5 percent.

Cohara Bassa has a contract to supply 1 320MW of hydro-power to Eskom.

Azar Jammine, the chief economist at Econometrix, pointed out that this was not more than 5 percent of South Africa’s demand.

And even though Eskom partly attributed load shedding to unavailability of some Cohara Bassa capacity on Wednesday, the utility actually received 1 200MW from Mozambique. So it was only 120MW that was not available.

If planning is this difficult and if one setback is this detrimental to Eskom, until Medupi comes on stream, the economy will be held ransom.

Strike resolutions

Every cloud has a silver lining and as the platinum strike nears its end the upside may be moves to find mechanisms to resolve strikes that become dysfunctional and destructive.

This week the SA Attorneys Association called for a compulsory arbitration in the platinum strike.

“An arbitration tribunal of experts… can be given the mandate to hear representations and to finally determine what minimum wage would be fair to all parties.”

It said this would enable all parties to save face without having to make unpopular concessions.

In January, labour law experts interviewed by Business Report shot down the idea of two dispute deadlock-breaking mechanisms proposed by Labour Minister Mildred Oliphant: compulsory and interest arbitration. They said they would not pass constitutional scrutiny.

Her aim was to curb long, violent strikes.

Oliphant told the annual Nedlac labour conference on January 25: “Violence during strikes remains an issue of concern to the government and the general public.”

She said every right had to be juxtaposed against a responsibility. The right to strike and protest should not infringe on other people’s rights to make a living or their right to refuse to protest.

Oliphant said: “There are unlikely to be specific legal amendments to address this issue. For example, the requirement to ballot – but we will have to find ways of addressing violence during industrial action. We have to exercise leadership and show leadership.”

Edited by Peter DeIonno. With contributions by Londiwe Buthelezi and Wiseman Khuzwayo.


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