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Dames: Decisions need to be made now

May 22 2012 14:45 Sapa

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Johannesburg - Decisions on South Africa's future energy supply should be made early to cope with rising demand, Eskom CEO Brian Dames said on Tuesday.

"We must decide now to build the next power plant. We must not make the mistake to build when it is too late," he told the African Utility Week exhibition in Johannesburg.

Electricity is a long-term industry where decisions shape the future prospects of both the industry and economic growth, Dames said.

With urbanisation and technology pushing up electricity demand worldwide, investing in infrastructure is important as South Africa gradually moves away from coal towards nuclear and renewable energy.

"The economics of renewables are increasingly attractive," said Dames.

Dames said Eskom has added 5700 megawatts (MW) to the national power grid since 2005 and intends to have added 11 000 MW by the end of the decade.

South Africa's concerns about energy supply will subside as capacity to generate power increases, but other countries in Africa are not so fortunate.

It is in the country's interest to facilitate increased power capacity on the continent, he said.

While Eskom is not concerned about meeting demand as winter deepens, there is concern about reserves for maintenance, said Dames.

This is partly why Eskom has stepped up maintenance operations over the last few months.

Dames called on South Africans to save energy, citing the 2 000 MW daily increase in demand between 17:00 and 21:00 in winter.

He said he hopes all households in South Africa will have electricity by 2030. Between 2.5 to 3 million homes are still not connected to the national power grid.

Turning to tariffs, Dames said South Africa's electricity prices are not yet cost effective. Increases over a longer period of time, matching the rise in inflation, are where tariff increases should eventually settle.

He said if increased capacity is created, it has to be paid for.

The growth in energy supply needs to be more efficient and address climate change while keeping the lights on, Dames said.

brian dames  |  eskom
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