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'Short-term power capacity needed'

Apr 30 2010 16:29

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Johannesburg -The country needs more electricity capacity in the short term, Business Leadership SA (BLSA) said on Friday.

This is because electricity supply affects business plans, the way business operates, and the way business views opportunities in South Africa, said BLSA energy spokesperson Jayendra Naidoo.

He was speaking at a media briefing following BLSA's April board meeting.

Naidoo said that at the board meeting BLSA had discussed how it would engage with both power utility Eskom and the government.

"We need to discuss how to mitigate the shortfalls in electricity supply in the short term and we need to discuss how to resolve SA's long-term energy requirements," Naidoo said.

He said another objective of business was to ensure that Eskom was efficient, even though there would be opportunities for power generation in the public sector.

"It is no secret that between now and 2030 some 40 000 more megawatts must be installed on top of the 43 500 megawatts we have now," Naidoo said, acknowledging that these targets "may change a bit".

Eskom's Medupi and Kusile power stations would contribute less than 25% of the figure.

"We're very concerned about the increased demand for power and with all the current initiatives on the table, we're still going to be sitting on the edge of our seats in terms of the reserve margin... so there is a need for more power and better usage of power."

Naidoo said BLSA had found it might be possible to create an added capacity of 5 000 megawatts, not through business saving or cutting back on gross domestic product growth, but through initiatives such as co-generation and renewables.

He said BLSA, which represents 80 large companies including multi-nationals, wished to share its experience with Eskom.

It also wanted to see the asset base of Eskom increased to match global benchmarks.

"We have an agenda of things that can be done... Resources lie in the hands of suppliers and users who are part of the business world."

BLSA chief executive officer Michael Spicer said foreign investment in the energy sector would increase the availability of capital.

"But foreign and local investment have the same sort of parameters... Projects requiring investment must have an adequate return."

Naidoo said BLSA had held discussions with nuclear power producers and they were satisfied with South Africa's current electricity tariffs.

"They've said in conversation that 25% times three is adequate."

Earlier this year, the National Energy Regulator of SA granted Eskom an increase in tariffs to 24.8 percent in 2010/2011, 25.8% in 2011/2012 and an increase of 25.4% in 2012/2013.

Naidoo said BLSA was aware that there were risks that Eskom depended entirely on coal.

"We are therefore supportive of government's efforts to reduce emissions and change the energy mix... We are supportive of the rapid deployment of new, cost effective power such as nuclear, solar and wind power."

- I-Net Bridge

eskom  |  electricity  |  business leadership sa
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