Eskom to cut key industry's power for Zuma

UPDATE - 16:25: Both Eskom and BHP Billiton confirmed to Fin24 that the request for a 15% reduction in power consumption has changed to 10%.

Cape Town – Eskom asked key industries on Thursday to reduce power consumption by 15% during the State of the Nation address (Sona), something an energy expert says is clear political interference and goes against the power producer’s strategy.

READ: Chances of load shedding low to medium ahead of Sona

The South African Independent Power Producers Association tweeted that the “Eskom CEO [Tshediso Matona] just asked industry to cut power usage by 15% to prevent load shedding during Sona 2015”.

Energy expert Chris Yelland, MD at EE Publishing, told Fin24 that this smacks in the face of Matona’s strategy that Eskom would never again allow external factors like the 2010 Football World Cup to come in the way of its mandate.

Yelland contacted a major industrial company and spoke to the head of its power and electricity section.

“He said he had in fact received an email … and he indicated that Eskom’s key account manager had emailed him … requesting that key customers should reduce electricity demand by 15% between 18:00 and 21:00 tonight,” Yelland told Fin24.

Listen to the full interview with Yelland:

He said the 15% reduction on Eskom’s key industrial clients would impact the economy negatively and that political reasons were getting in the way of growth.

“This gives rise to speculation as to whether in fact this instruction to Eskom’s key customers is in fact another indication of political interference in the electricity business of Eskom,” he said.

“You may remember that Eskom acknowledged in its also press briefing that it had been subjected to and it had engaged in what it considered to be politically-motivated decisions to keep the lights on at all costs during the World Cup and during the lead up to the general elections last year,” said Yelland.

“Matonsa indicated that those kind of political decisions  to keep the lights on at all costs would not happen again, that now Eskom would be doing maintenance by the book and would not allow such political considerations to be a part of its decision making,” said Yelland.

Yelland explained that the concept of keeping the lights on at all costs refers to household lights and not industries.  “When we talk about all costs, we’re talking about all political costs,” he said.

“It gives rise to speculation that Eskom has been subjected to pressure by politicians to ensure that the lights stay on and that the message of the Sona is heard.”

He said this is putting political considerations ahead of economic ones.

Nothing new here

Eskom spokesperson Khulu Phasiwe dismissed the allegations of political interference.

"It is not a secret that Eskom has load curtailment agreements with some of its large industrial customers," he told Fin24.

"In terms of this agreement, they have agreed to reduce their load whenever Eskom asks them to do so. This has been happening for a number of years now."

Fin24 contacted a major industrial company, who seemed to agree with this assessment. He said they had been instructed to reduce their load, but that it was part of their agreement to do so and they had no issue with this.

Lulu Letlape, VP Communications and External Affairs for BHP Billiton SA, said the firm's  negotiated pricing agreements for the aluminium smelters allow Eskom to interrupt the supply of electricity (subject to defined parameters) in times when Eskom’s power system is under threat.

“Interrupting supply to the smelters allows Eskom to continue to supply electricity to all other customers. We work very closely with Eskom to do all we can to protect the supply to our smelters, and other operations.

“We jointly proactively manage the situation on a ‘real time’ basis and have an excellent working relationship with them to deal with all contingencies.
Within the technical limitations of our plant, we have agreed with Eskom to provide more support during emergencies without risking our operations,” she said.

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