Eskom curbs BHP power as supply tightens

2011-05-30 15:29

Johannesburg - Power utility Eskom, which is struggling to keep the lights on, has been interrupting supplies to BHP Billiton’s aluminium smelters to help manage its tight supplies.
Eskom’s spokesperson Hilary Joffe said on Monday that under a special pricing agreement signed between the utility and BHP Billiton [JSE:BIL] in the 1980s Eskom can temporarily interrupt supplies to the smelters, but only for up to two hours a week.
“We’ve always used it... but because we’ve been running the system tighter to get more maintenance done before winter, we’ve used it more in May than in recent months but not as much as in May last year,” she said.
She said the utility may have used the agreement more often last May to keep the system safe ahead of the soccer World Cup.
South Africa’s national grid nearly collapsed in early 2008, forcing mines and smelters to shut for days and costing billions in lost output.
Eskom has said the system would be tight for the next few years until the first of its new power plants come on stream, but no rolling blackouts are foreseen for now.

With South Africa about to enter winter, demand for electricity is expected to peak from the usage of energy-intensive heaters and lighting.
Eskom has separate agreements with some energy intensive users by which those customers can reduce their demand in return for compensation. These deals could cut South Africa’s total load by up to 500 MW.
Eskom has said electricity use had recently risen during peak times to levels higher than at the same time last year.

Joffe said Eskom had avoided bigger disruptions to BHP by making use of its open cycle gas turbines, which can supply an additional 2 400 MW.
For every 1 degree Centigrade drop in winter temperatures, demand rises by 600-700 MW during peak time, Eskom has said.

The utility plans to invest up to R460bn ($66.51bn) in new power plants to plug the shortfall and meet fast-rising demand from industries and residential consumers, but analysts say this may not be enough or not soon enough.
The first unit of Eskom’s planned Medupi power station, the utility’s first new plant in more than two decades, is expected to come online towards the end of 2012.

  • Louis III - 2011-05-30 16:03

    Ummmmmm, I thought ESKOM said there was no shortage. Am I missing something?

      JC - 2011-05-30 16:55

      Yes, you are, the elections are over...

  • freedom - 2011-05-30 16:39

    First new plant in two decades? well that says it all, the ANC took over a well operating system that was self supporting, so why spend money on new plants when we can use the money to pay NON performance bonusses and huge salaries as well as have fat parties! so now the nation must suffer.

  • DeeCS - 2011-05-30 16:47

    How about cutting off the power being given to Zimbabwe who dont pay for it anyway.... so we benefit in 2 ways by not loosing power and not having to compensate them for turning their lights off.

  • Idur - 2011-05-30 17:04

    BHP give the mInes to Malema as soon as you can, then ESKOM can cut the power and the ANC can run the mines to the ground like everything else in SA. Elections are over, potholes will surface again, trafic lights will be out of order for months, toll gates to be implimented soon, electricity cuts are back. Brace yourselves the next 4 years are going to be a spiral down !!!

  • Happygas - 2011-05-30 19:11


  • Pieter - 2011-05-30 20:08

    QUESTION NO.: 1317 DATE OF PUBLICATION: 21 March 2011 1317. Mr P van Dalen (DA) to ask the Minister of Public Enterprises: (1) What will be the costs to Eskom to cancel the (a) Hillside, (b) Bayside and (c) BHP Billiton’s Mozal smelter contracts, broken down for each remaining year of the contract in question; (2) Whether the cancellation of these contracts will solve the energy supply shortage; if not, why not; if so, what are the relevant details; (3) What is the (a) start and (b) end dates of each respective contract; (4) Whether these contracts are open-ended; if not, why not; if so, how did expansions/upgrades at these smelters over the past 15 years influence the nature of these contracts; (5) (a) How much power is estimated to be added to the national grid upon the cancellation of these contracts and (b) how would this secure the supply of energy? NW1460E REPLY (1)(a)(b)(c)(2) No decision has been made to cancel the contracts referred to above. (3)(a)(b) The table below indicates the names, the start and the end dates of contracts. Name of smelters Start Date End Date Bayside August 1995 July 2020 Hillside Potlines 1&2 August 1995 July 2020 Mozal April 2001 Mar 2026 Hillside Potline 3 July 2003 June 2028 (4) The contracts were entered into for a 25 year period.

      firefighter - 2011-05-31 03:21

      The real questions should be: How big was the Bribe and who was it paid to?

      Cathy - 2011-06-14 22:37

      I bet you never got an answer! Well I say tell BHP to go somewhere else!They are abusing the poor south africans and the hierarchy are getting richer!We don't need foreign currency any more.

  • sharon186 - 2011-06-10 09:17

    why do they take the power off during the period when its needed the most!! stupid idiots!!!

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