Coal truckers demand slowdown in govt IPP programme

Johannesburg - Coal-truck drivers brought traffic to a standstill on roads surrounding South Africa’s capital on Wednesday as the state-owned power utility said it won’t be renewing their contracts because there is surplus electricity in the country.

Truck drivers whose employers are members of the Coal Transportation Forum used their vehicles to blockade the main roads entering Pretoria, Talk Radio 702 reported.

Eskom Holdings, which supplies about 90% of the country’s power, won’t renew contracts with 48 transport companies because weak demand, slow economic growth and the introduction of new supply from independent producers has resulted in a 3 million metric-ton coal surplus, Acting Chief Executive Officer Matshela Koko told the Johannesburg-based broadcaster.

The company will be closing its Camden, Grootvlei, Hendrina and Kriel electricity plants by end-March 2020, resulting in as many as 20 000 job losses, he said.

Eskom uses coal to generate more than 90% of its supply to Africa’s most-industrialised economy. President Jacob Zuma said last month that the company must sign agreements to buy power from private producers, which the utility had stalled.

The company said it no longer requires additional renewable energy, arguing that it’s expensive, isn’t always available during peak demand periods and will push up prices for consumers.

‘Unintended consequences’

“The Coal Transportation Forum wants the government to protect the jobs in the mining and related industries,” it said in an emailed statement.

“The IPP programme must be slowed down to reflect the current electricity surplus and the fact that electricity demand is declining. Government has to own up to the unintended consequences of the renewable IPP programme.”

The renewable-power programme has drawn R194bn of new infrastructure, and 2 200 megawatts have been connected to the national grid from 44 projects. Developers are still waiting for Eskom to sign offtake agreements on another 37 projects worth R58bn that will generate 2 354 megawatts. There are also plans to get electricity from independent producers using coal and liquefied natural gas.

The facilities Eskom intends to close are all more than four decades old. The idled Camden and Grootvlei plants were restarted in 2008 to help end a supply crisis caused by a four-year delay to the government giving Eskom permission to expand.

The lack of supply curbed economic growth, caused rolling blackouts and reduced supply to the mines and smelters that produce the country’s biggest exports including gold and platinum.