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Eskom in scramble to avert blackout

10.08.13.A sunset shot of the Koeberg nuclear power plant next to Melkbosstrand near table View. Picture Ian Landsberg

10.08.13.A sunset shot of the Koeberg nuclear power plant next to Melkbosstrand near table View. Picture Ian Landsberg

Published Oct 31, 2014

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Eskom scrambled to keep the lights on as technical faults hit some of its stations, forcing the power utility to issue major industrial customers with an injunction to cut consumption by a minimum of 10 percent from 5.30pm yesterday.

“The power system is severely constrained due to technical faults on our power stations. Units that were on main- tenance have experienced outage slips which means the units could not be returned on line on their due date from the outage,” it said in a statement.

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“Should we not achieve the required energy savings, we may need to go into load shedding from 18h00 until 22h00 tonight (Thursday).”

The warning underscores the precarious nature of South Africa’s power supply as the country awaits the completion of two new stations, Medupi and Kusile, whose construction has been hit by delays and other snags.

Large industrial users who bear the brunt of the power alert include diversified global mining company, BHP Billiton, and steel producer ArcelorMittal South Africa (Amsa).

BHP Billiton would work with Eskom following the injunction, Lulu Letlape, the company’s vice-resident communications and external affairs said yesterday. “In line with the declaration of system emergency; BHP Billiton will work with Eskom to ensure savings from all our operations.”

Kesebone Maema, Amsa’s manager for corporate communications and branding, said it was possible it may not cut the 10 percent load as required because of safety and production considerations. “We agreed that we will cut the load as much as possible, bearing in mind we have to consider safety and productivity disruptions.”

Amsa’s flat steel operations at Vanderbijlpark and Saldanha have a combined capacity to produce 4.2 million tons of liquid steel a year, making it the largest suppliers in Africa. The Vanderbijlpark operation had the capacity to produce 3 million tons of liquid steel a year, which made up about 78 percent of South Africa’s flat steel requirements.

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Eskom yesterday grandly responded to rating agency Fitch’s affirmation that its long-term local currency issuer default rating was at BBB+, with a negative outlook.

Fitch cited that the government support through the R350 billion guarantee framework agreement and planned equity injection, the company’s cost cutting and efficiency measures, and the moderately supportive tariff determination as the key drivers of the rating affirmation, it said.

“Eskom is pleased that Fitch acknowledges the support package as having a stabilising impact. Eskom, together with the Inter-Ministerial Committee, will continue to address solutions to the long-term sustainability of Eskom within the sector,” said its finance _director, Tsholofelo Molefe in the statement yesterday.

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“This affirmation will assist Eskom in its endeavours to execute the planned additional funding initiatives and ensure that we secure the funding required to effectively complete the current capex programme,” said Tshediso Matona, chief executive, who took up the position last month and issued his first constraint alert on Wednesday when he said the system was “severely constrained”.

Eskom also made the standard appeal to domestic users to switch off pool pumps, geysers and other appliances that they could.

In his medium-term budget policy statement, Finance Minister Nhlanhla Nene said the government would throw Eskom a R20bn lifeline. The support package meant that the government would sell non-core assets and dispose of its stake in companies such as telecoms giant Vodacom.

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