050910 Electricity pylons carry power from Cape Town's Koeberg nuclear power plant July 17, 2009. South Africa will need 20 gigawatts (GW) of new power generation capacity by 2020 and would require double that amount a decade later to meet rising demand, the country's power utility said September 7, 2009. Picture taken July 17, 2009. REUTERS/Mike Hutchings (SOUTH AFRICA ENERGY BUSINESS)

Johannesburg - South African power utility Eskom said on Monday the first power from its new Medupi plant would hit the grid in the second half of next year, a delay of at least six months caused by labour unrest and “underperformance” by contractors.

The delay is likely to put more pressure on the national grid, which already this year has sometimes operated with a buffer of less than 1 percent of its capacity.

“The target date of December 2013 is unlikely to be achieved. A more realistic target date for first power from Unit 6 is the second half of 2014,” Eskom chief executive Brian Dames told a news conference.

Dames said once the first unit of Medupi was online, the remaining five units will start at intervals and the entire power station was expected to be fully commissioned by 2017.

Eskom said the delay will raise the cost of Medupi to 105 billion rand ($10 billion) from 91.2 billion, but this will not have an impact on electricity tariffs.

Eskom, which provides 95 percent of the power to Africa's biggest economy, has been walking a tightrope for five years as it tries to bring long-overdue power plants online after the grid came close to collapse in 2008.

The power crisis forced factories, mines and smelters to shut down for days, costing the economy billions of dollars in lost output.

Eskom said it was working with other stakeholders to ensure security of supply next year, as the country was expected to have a potential gap in supply of 700 megawatts.

But electricity demand has been subdued due to the slower-than-expected economic growth, Dames said.

“The power system will remain tight. We are working to put initiatives in place to close the gap,” said Dames.

Eskom's hopes rest on Medupi but construction of the coal-fired power station has been beset by delays, including illegal and sometimes violent strikes and protests which mirror the simmering unrest in the mining sector.

Construction of a second coal-fired power station, Kusile, has also been disrupted by strikes.

Kusile is due to come on line next year.

Dames said Eskom was still trying to work out what impact the labour disruption has had on Kusile's start date. - Reuters