Fin24

Eskom faces new power crisis

2012-08-12 16:28

Johannesburg – Eskom again faces power shortages. Within six years the utility will have a 40m tonne coal deficit to meet its annual requirements.

This shortfall is owing to Mpumalanga’s shrinking coal reserves, which need urgent supplementation with coal from the Waterberg area, which has 70bn tonnes of shallow coal reserves lying between Lephalale and the Botswana border.

Every year after 2018 the shortfall will assume greater proportions because of Mpumalanga’s shrinking reserves.

By 2040 only five of the 13 coal-fired power stations in Mpumalanga will still have coal.

Transport costs to Mpumalanga will be between R100 and R200/t, which means the coal will cost 50% to 100% more than the R209 that Eskom is currently paying for coal from those mines mostly close to the power stations. Electricity consumers will ultimately bear these costs.
 
Railway lines are now hurriedly being built to get the Waterberg coal in Mpumalanga, but the only long-term solution is to build more power stations at Medupi and Matimba in the Waterberg area, where half of the country’s remaining coal resources lie. Last month Eskom asked the 15 owners how much coal they can make available for the Mpumalanga power stations.

Exxaro, the only one of the 15 mineral-right owners producing coal, said it was prepared to provide 2m tonnes a year by 2014 and, by 2018, to increase this to 30m or even 40m tonnes, depending on Eskom’s specifications.

Transnet committed itself to improving the carrying capacity of the railway line to 23m tonnes/year by 2016 and eventually to push this up to 80m to accommodate, inter alia, for coal exports from Botswana.

Owners of the 70bn tonnes of coal in the Bushveld are however frustrated and disillusioned by the delay in providing a legal framework for erecting private, independent power stations while the country pays higher prices because of electricity shortages.

The electricity regulation bill and that on independent system operators, which will remove control of the country’s power grid from Eskom so that independent operators can also use it, has been dragging on for three years.

Construction of private coal-fired power stations cannot start before these matters are finalised. It has become increasingly obvious that independent power generators are the key to the country’s energy problems.

There is also enormous frustration in the mining industry because Eskom is buying electricity back from chrome smelters.

This winter this has brought half of the ferrochrome industry to a standstill and resulted in South Africa surrendering considerable market share to China.

“How can Eskom be proud of us getting through winter without power failures while effectively there has been commercialised load-shedding?” a player in the ferrochrome industry said to Sake24.

- Sake24

For more business news in Afrikaans, go to Sake24.com.

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Comments
  • rbphiri - 2012-08-12 16:51

    Here we go again!!! paying child support for Eskoms mistakes.

      amanda.victor.92 - 2012-08-13 04:44

      I thought SA was exporting coal to China? Guess they'd rather have a growing China than worrying about a dark South Africa. Bunch of nincompoops running the show here.

      claudia.meads - 2012-08-13 07:31

      One particular boo boo must still feature high on the support claim.., http://www.news24.com/SouthAfrica/Politics/Eskom-makes-R3bn-boo-boo-20110327

  • judith.taylor.56 - 2012-08-12 17:18

    Old fusty thinking has destroyed our energy supply. We should be coal free and into solar solutions already, with high job creation and increased scientific research. Germany has done it with far less sun power than we have - please let's shove these dinosaurs out and bring in lateral thinkers.

      james.rossouw - 2012-08-12 18:19

      Germany is NOT doing it. Their whole green thing is coming up short. They had to import power from Austria. Solar Mnf in Germany USA {Solyndra cost US Taxpayer thanks to BO,stinks, 1/2 BILLION $} even China Solar Mnf's are having problems.

      warren.slater.353 - 2012-08-12 20:51

      Major strides are being made in solar energy. Rubbishing it just because it's not a total solution yet is simply short-sighted. Any power generation that doesn't pump out poison as a byproduct is surely worth pursuing. http://www.huffingtonpost.com/vivian-norris-de-montaigu/germanys-solar-success-an_b_1563735.html

      gary.guy.507 - 2012-08-12 22:05

      I don't think james was rubbishing it. Solar, Wind and other 'green' power sources certainly have their place and technology advances will most likely improve their relevance in the pecking order in future. But, the reality is that for at least medium term future, fossil fuel and nuclear is the only viable option for the bulk electricty supply.

      andynct - 2012-08-12 23:56

      Electricity in Germany as a result costs more than double in SA and is one of the most expensive in the world. Electricity in the countries that invested heavily in "green energy" are paying for it heavily. Netherlands, Denmark, Germany, etc. http://en.wikipedia.org/wiki/Electricity_pricing#Price_comparison

      amanda.victor.92 - 2012-08-13 04:47

      Solar and wind can not sustain an economy. Germany is building coal-fired power stations again and stopped their green subsidies because they are UNSUSTAINABLE. I wish people would do more research before sprouting out about stuff they know nothing about. The future is nuclear, but with all the Green eco-warriors carrying on like a bunch of 2-year olds it'll never be backed by governments.

      christo.meyer.75 - 2012-08-13 09:33

      What is going to power your TV at night?

      johnathon.masters - 2012-08-13 11:10

      I do not know how feasible this might be, but has Eskom looked at Hydro Electric Power Stations. Constructing large concrete arch dams is expensive, but how do these costs compare to building a large coal fired power station, or new Nuclear Powered Plants. Once Hydro Electric schemes are commissioned, no further energy input is required. I am sure that there are many suitable sites in the mountains of Lesotho, or even the Drakensburg, or even barrages along large rivers such as the Orange. I would imagine that a number of smaller dams, might be a lot cheaper to construct than huge dams like Katse, part of the highlands water scheme. An in depth cost comparison would be a worthwhile exercise, if not yet carried out.

      andynct - 2012-08-13 12:35

      Germany is building 46 new fossil fuel power stations. Germany Building 17 New Coal, 29 New Gas-Fired Power Stations http://thegwpf.org/international-news/5536-germany-building-17-new-coal-29-new-gas-fired-power-stations.html

      flysouth - 2012-08-21 19:36

      I do not believe - and the experimentation and development that is currently happening on solar etc - is beginning to show, that you cannot get the power-density, never mind the reliability of supply, to successfully replace the energy available from fossil-fuels or nuclear, at any economical cost. Perhaps this may change in future - right now, no way. In the UK the numerous wind turbines which have been built are now showing some very serious effects on local weather patters and flora in the area of the turbines. Apparently they change the local climate in unpredictable ways as they modify the flow of air and wind. Humanity will in time be forced to the realisation and acceptance that nuclear is in fact the only way to go - or will have to decide to revert, in industrial and therefore social conditions, back to the 18th century. As to the risks of nuclear - the fact is that many more people have lost their lives as a result of fossil fuel-generated power than have died as a result of nuclear power - coal-miners for example and so on.

  • GamesxetraWilro - 2012-08-12 17:27

    En so gaan dit voort....

  • amaytom - 2012-08-12 17:30

    Never ending story

  • gerhardus.windpomp - 2012-08-12 17:32

    the government can't even deliver text books or organise enclosures for toilets. so this is no surprise.

      blou.johnny - 2012-08-12 22:53

      ...useless..!!

  • joe.peters.56 - 2012-08-12 17:39

    Solar and wind energy would solve this 'crisis'. Too bad the ANC tenderpreneurs need the coal to fatten their already bulging bellies.

      amanda.victor.92 - 2012-08-13 04:48

      Are you for real? If SA went solar and wind your electricity prices would sky-rocket as they have to subsidised by YOUR taxes.

      wo0two0t - 2012-08-13 10:01

      I think the key here is balance - Coal and Nuclear for base power supply then wind and solar for peak demand.

      wehrner.kohn - 2012-08-21 20:56

      when will people realise that solar is cheaper than socket prices in municipality areas

  • Hermann - 2012-08-12 17:43

    Go clean, go nuclear.

      warren.slater.353 - 2012-08-12 20:55

      Having to sweep toxins under the carpet for future generations to deal with is hardly clean. Also the sooner nuclear energy derivatives are superseded the sooner we won't need every rogue country on the planet needing to refine nuclear materials for dubious peaceful pursuits.

      amanda.victor.92 - 2012-08-13 04:48

      100% correct. Take Gollum as an example of the stupidity out there.

  • Billy - 2012-08-12 17:51

    billions of dollars for renewable energy, use it

  • mark.haupt.31 - 2012-08-12 18:07

    Eskom don't have a crisis - they are a crisis. They should have started building new stations - nuclear ones - ten years ago but were too busy filling their director's pockets and waiting for somebody else to solve the problem. Bunch of cretins.

      gary.guy.507 - 2012-08-12 22:11

      You are a cretin MarkH for having no idea what you are talking about and regurgitating rubbish. It was not Eskom's decision to not build power stations, but the ANC government's prohibition on building new power stations while they did what they do best, talk talk talk about how to introduce IPP's but doing sweet f. all while ignoring warnings of looming power shortages.

      blou.johnny - 2012-08-12 22:45

      ...Eskom = another ANC failure... ...well done ANC...!

      andynct - 2012-08-13 00:02

      Energy is getting more expensive all over the world. Deal with it, or use less.

  • dean.cent.9 - 2012-08-12 18:11

    What a wonderful thing fir those short sighted "fat cats" and ANC shareholdings when the next excuse to "fleece" their people of yet more money comes about. So next year this has set the pace - we are due yet more inhumane increases to pay for their incompetence, greed, shortsightedness and "snout in the trough:" approach to making money. Three years and yet competition has still neen denied. These monopolies we suffer in SA have to be destroyed and profits to their shareholdres surely must be withheld until such time they work for the "good of all" as oppose to the "profits of a few". Incompetence and "unwillingless to look at alternatives" in a country of sun must be dealt with a way for the country and not just for those seeking profitabilty from outdated nuclear options (as the Japanese and Germans have shown us is not the way) and will ultimately destroy the genwerations being birthed. this is all @#$@sh#t. This world needs to change!

  • jim.binnie.1 - 2012-08-12 18:51

    The big problem in South Africa is everyone plays "politics" and no-one sees reality. It is much cheaper to move "electricity" via the national grid to business in RSA than it is to move coal from the far away coal fields to power stations, or to create new power stations next to the coal fields. Separate the power grid function from electricity generation and let private generation companies (nuclear or coal) supply electrical power to this country to support growth at a price they can compete with each other (cheapest supply cost will win in the end).

  • nick.crossley.395 - 2012-08-12 19:41

    Frankly I don't care if Eskom collapses in a heap. I have been in alternate energy for some time,and with a bit forward planning,I have hot water, lighting and TV's etc powered by the sun. Try as they may the cANCer cannot screw that one up.Have fun in the cold dark!

  • Jason - 2012-08-12 19:44

    the AMMOUNT we have paid this winter for using so little (having installed gas, timers, wood & coal fires), no problem!! ... we have subsidised the future, or lined somebody's pockets

  • johan.kruger.39 - 2012-08-12 20:20

    They are preparing for bigger bonusses in future!!!

  • Vince.York - 2012-08-12 20:22

    Citizens slowly discover just HOW MUCH those little flourished signatures on the zuma/ANC/Chancellor House type of massively over inflated deals are going to cost each one for the next few decades - but at the same time enrich the small handful of greedy thieves throttling the NEC. These erstwhile anc commies, have taken capitalist abuse beyond all boundaries in creating false wealth, and are now trapped by their very own contracts to entrench legitimized theft and crime in perpetuity. John Galt will find the way out for you all though, just search and find out about him......

  • nwayne54 - 2012-08-12 21:54

    One solution: Nuclear Power. It's clean and highly productive! Can stimulate nuclear physics (and medicine) research and is entirely sustainable. With the Karoo and our brilliant deep mining technology which could store used-rods and make us a world leader in energy! The isolated incidences that took place from inexperience (Chernobyl) and poor long term thought about fault lines (Fukushima) can be avoided. We underestimate our scientists and engineers because we don't see them being utilized efficiently! We really have potential.

  • mzwandile.dlamanzi - 2012-08-12 23:20

    Malusi gigaba must come up and intervene and see if he will make sense in this strategic issue. He jumped when transnet reduced board members and announced it himself.

  • freelancemediapro - 2012-08-13 06:57

    Without doubting the author's capabilities: it would have been nice (and crucial) if he had mentioned the source of his stats. Are they from eskom? An Independent energy analist? Dept of energy? What puzzles me is all the international loans (world bank, EU, African development bank, China, etc) eskom has received over the past years, loans that amount to billions and billions of dollars. They were meant to relieve our energy situation. However, we still have to see the result of how that money is / will be spent. BTW: That money at some point needs to be paid back - with interestas there is nothing like a free lunch. I guess we will have to take into account electricity prices hikes for the next decades.

  • Danny - 2012-08-13 07:56

    This information is not true - I have seen the coal studies

  • Blixum - 2012-08-13 08:11

    Thank goodness! Now at least Eksdom know what is going to happen to them in 6 years time. Previously they were just being run by feel.

  • erich.goosen - 2012-08-13 08:24

    I think I speak on behalf of most consumers if I say we are getting sick and tired of the conflicting statements of Eskom. Sometimes we hear that although the consumption is near capacity, their will be sufficient power. Then we hear that Eskom's income is sufficient and that record profits are made and now that due to a shortagae of coal, the price of electricity might go up. Please make up your mind.

  • marc.rule - 2012-08-13 08:24

    BLA BLA BLA here goes the price AGAIN.

  • leonard.rom.7 - 2012-08-13 08:26

    WHAT IS NEW

  • UNITY - 2012-08-13 08:30

    Think alternate sources of energy or production thereof.If there is one trend that never fails is rising costs, and if a group of smart asses do save let's say Eskom money, it just returns a higher profit. So once again consumers are burdened with what is deemed as a necessity. Go out to low cost communities, and u will find they receive the bulk of savings in terms of solar energy ,geysers,solar panels,etc. I believe as ordinary citizens, we are paying the brunt of greed that is directly linked to such parastatals. Earlier this year we saw President Zuma, negottiate a lower increase to our annual electricity bill. This reflects direct influence on the matter.Its up to the middle class and up to wise up,in making their homes more eco friendly,then wait four years to get ripped off, due to lack of planning by the state or Eskom.

  • dkladis - 2012-08-13 09:03

    NO YOU GUYS HAVE IT ALL WRONG ... THIS IS ALL ABOUT HOW DO WE SCREW THE MAN ON THE STREET AGAIN SO WE CAN FEED OUR GRUBBY PAWS! All of this is just stories to increase the price of electricity. What we need in this country is competition

  • dkladis - 2012-08-13 09:06

    Here we go again.. lets think of something that will justify a price increase of electricity so we can fuel our pockets. Why do they not build power stations using alternate energy sources ?

  • dyl.brits - 2012-08-13 10:41

    it baffles me as to why they still plan to use coal power by 2040...im pretty sure coal will be the vcr player in a dvd powered world by then.

  • gavin.hillyard - 2012-08-13 16:03

    How we can even be thinking of more coal powered power stations is beyond me. Wake up to the direction the world is going with global warming. Major carbon footprints to mine, transport and burn coal. Any thinking person should surely oopt for nuclear as it is clean and is independant of outside suppliers and fluctuating coal costs. Surely better to spend more initially to build nuclear and then benefit cash flow wise for the life of the nuclear plants?

  • alan.davis.5249 - 2012-10-16 17:24

    If the CEO of Escom had not received his increase, together with his board of directors, there would have been more than enough money to buy the coal needed from other places. But will he budge from his R6.4 million salary and be a shining example ? consider this the joke of the day !

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