Fin24

SA battles to keep blackouts at bay

2012-05-14 18:00

Johannesburg - It is five o'clock in the evening and the computer dials at the nerve centre of state electricity firm Eskom are cranking towards the red as millions of people get home and turn on their heating, hot water and cookers.

In the next two hours, demand will jump sharply, pushing the grid towards its limits and a repeat of the emergency rolling blackouts, known as "load-shedding", that wreaked havoc on Africa's biggest economy in 2008.

With the winter drawing in, Eskom is walking a tightrope to keep power flowing to factories, mines and smelters that had to shut down for days four years ago, costing the economy billions of dollars in lost output.

At one point in January, the difference between demand and available supply fell to just 460 MW - a buffer of just over 1% - with some plants running harder than usual as network maintenance unexpectedly tripped out.

More close shaves like that and Eskom will have little option but to start shutting down parts of the system to prevent a total collapse - a move that would lead to temporary mine closures and a spike in world prices of platinum, gold and coal.

The rand would also take a hit, as would the confidence of foreign investors.

The pressure is huge, yet it is hard to see any signs of it among the technicians monitoring the banks of blinking screens and flashing alarms in Eskom's darkened control centre.

Save for the hum of air conditioners, the room is silent as the guardians of Africa's biggest power grid adjust voltages and shift electricity loads with the calm of air traffic controllers.

"We are worried," Kannan Lakmeeharan, the head of Eskom's delivery unit, told Reuters.

"Our resolve is not to load-shed, but there are no guarantees. It can be prevented but it will require extraordinary effort and immediate action."

Hefty price

South Africa, the world's top producer of platinum and a major supplier of gold and coal, paid dearly for the 2008 power crunch, which rippled beyond its borders in the form of record metal prices and knock-on power shut-downs in its neighbours.

It also damaged the reputation of the continent's most sophisticated economy as a solid destination for investment.

"If the lights go out now in a severe way, then you will have years of public relations to do to convince investors that things have stabilised," said Cornelis van der Waal, an energy analyst at consultancy Frost & Sullivan.

Aware of such risks, Eskom has set aside 2 400 MW of gas-fired emergency reserves as part of the system's total net maximum capacity of 41 000 MW, although these plants produce electricity at up to 15 times the price of coal-fired plants.

Operators of the giant ore smelters around Johannesburg have also signed agreements to power down for up to two hours a week to give the grid additional breathing space, and public service broadcasts go out on television to tell people to turn off pool pumps and other appliances whenever supply gets tight.

After that, it is down to the staff monitoring the grid 24/7 for transmission faults, system trips or demand spikes.

Candles, gas and fear of the dark

Since 2008, South Africans have learnt to deal with the occasional blackout.

Every driver knows how to pass through a traffic junction without working lights. Home owners stock camping gas cookers. Shops and businesses put notes in their windows to alert customers to backup generators.

Many learnt the hard way in 2008, when fears of some of the world's highest murder and violent crime rates kept many South Africans from going out at night on darkened streets.

"People would rather just stay in, keep the doors locked and your business was down by 80-90%," said Johannesburg restaurant owner Zane Beer.

"You literally lose your stock over those days."

Beer is installing a generator in his smart new Mediterranean restaurant, Oliva, and has a big box of candles stashed in a back room. Even though he cooks on gas, he knows attracting customers will be hard if the lights go out.

Since 2008, mining companies have also been busy making contingencies and improving efficiency, with some cutting usage by as much as 30%. Others are generating their own power to reduce reliance on the grid.

However, a harsh cold snap - Johannesburg and Pretoria experience regular frosts in winter - could run things tight, with Eskom estimating an extra 600-700 MW of demand during the evening peak for every 1 degree Centigrade drop in temperature.

A year ago the rand, a highly liquid emerging market currency, fell on rumours of Eskom blackout programmes.

Maintenance backlog

The crunch has been in the making since the pre-1994 days of apartheid, when the white-minority government sought to turn South Africa into a haven for heavy industry by underpricing power to attract investment.

After years of buoyant economic growth since 1994, and with millions of impoverished black households in the sprawling townships round major cities being connected to the grid for the first time, Eskom has struggled to keep up with demand.

It hit the panic button a decade before 2008, begging for critical investment in new plants, but the African National Congress dragged its feet, saying it wanted to bring in private power producers but failing to create an adequate regulatory framework for them to come in.

Squeezed on all sides, Eskom reopened mothballed plants and turned on emergency back-up systems. Independent producers have also been encouraged, and private players now pump up to 1 000 MW of power into the grid. Yet the bulk of generation is carried out by plants between 20 and 30 years old.

Eskom delayed non-essential repairs to prevent disruption to events such as the 2010 Soccer World Cup, but since then maintenance crews have been working flat out.

Still, the repair backlog will last at least until the end of 2013 and the first of 11 000 MW of power from three new plants - Medupi, Kusile and Ingula - is at least a year away.

Recession in 2009 brought some respite in the form of reduced demand, although growth is ticking up to 3% this year and 4 % in 2013.

When it hits 4.5%, power demand will be rising at 3% a year, the limit of what Eskom says it can cope with.

Fluorescent lights

Cutting national power use - or "integrated demand management" in Eskom-speak - has also managed to shave 1 600 MW off South Africa's power bill.

Some 43 million low power light bulbs have been fitted in homes across the country and billboards urge people to turn off air conditioners, water heaters and swimming pool pumps.

Mining companies have been asked to cut usage "voluntarily" by up to 10% and the scheme may be made mandatory.

The biggest incentives have been steep hikes in electricity tariffs that will help Eskom raise R460bn to build new plants.

As a result, the utility is on a more stable financial footing than in 2008 and funding for new plants is secured.

New chief executive Brian Dames, an Eskom veteran, and financial director Paul O'Flaherty, who was hired from outside, have gone to great lengths to woo investors and position the utility as a serious player.

But on a blackout-free winter, the jury is still out.

"It's not easy to sleep at night because we are worried," Eskom's Lakmeeharan said. "But it's not that we are panicking."

Comments
  • Mahendra - 2012-05-14 18:28

    its sad and the bosses get paid millions for their mis-management of these essential services

      Wayne Hambides - 2012-05-14 18:52

      It is when a read stuff like this that at the young age of 44 i am glad to be immigrating soon

      JaredVN - 2012-05-14 18:55

      Eksdom sells electricity to aluminium smelters and neighbouring countries at a fraction of a cost the ordinary consumer has to shell out. So here's how it works: If you pay more for your business class plane ticket, you get to sleep in a bigger seat and your food is better. Likewise with Eksdom. If I as an ordinary consumer pay more for my electricity, and power has to be shut off, those who pay far less than I - neigbouring countries and smelters - should logically have their power cut off first.

      Andrew - 2012-05-14 19:50

      Wayne, you don't even know what you are doing! Immigrating is when you come "in"! I think you mean EMIgrating as in exit...

      Konstabel - 2012-05-14 20:16

      This is not the time to play the blame game, we all know who is to blame but we need to now focus on alleviating the problems. If ALL South Africans more take steps to save as much power as possible we can get through the next couple of years without major blackouts. While many have done their best to save power there are still a lot of individuals and companies that can do more to reduce their power useage.

      koos.vandermerwe.92 - 2012-05-15 02:29

      Something like 70% of Eksdom income is generated by 15% of his clients(Households)

      Christopher - 2012-05-15 07:05

      South africa seems to be the only country where if you screw up as a CEO ,of a large company,or any other title you wish to impose , one ends up as a millionaire. Brilliant pension plan. Oh forgot those hundreds of incompetent individuals you get placed on suspension indefinitely.

      NrGx - 2012-05-15 07:58

      hold on - this exact situation happened in 2008. It is now 2012, and the demand has increased...what has eskom done since the previous blackouts? NOTHING, someone should be fired!

  • Warren - 2012-05-14 18:30

    Blah Blah,and while this was critical and known since 1994 the government chose to pursue arms deals, Airbus planes,toll gates,dodgy lease agreements and generally blew our taxes on more 'urgent' matters.#anc are useless

  • goyougoodthing - 2012-05-14 18:31

    Is this a piece of creative writing or a news story? Journalism has gone to the dogs.

      Saleé - 2012-05-14 18:35

      It is both. Why can it not be? I quite enjoyed it.

      goyougoodthing - 2012-05-14 18:58

      Because news is news and creative writing is another thing altogether. I am glad you liked it but please understand this is a news site, not a novella.

  • Stephanie Nel - 2012-05-14 18:31

    Maybe someone should switch the toll gantry lights off. And if every second highway light was turned off, imagine how many lights elsewhere could be powered.

      Susan - 2012-05-15 13:22

      Would help quite a lot if they switched the highway lights off in daytime too...

  • Squeegee - 2012-05-14 18:33

    Hey, weddings and funerals are a priority.... and the occasional trip to Switzerland.

  • Andrew - 2012-05-14 18:42

    Just typical huge salaries for incompetent ANC cadres and we have to suffer. Bloody sick!!!!

  • Shirley Van Heerden - 2012-05-14 19:11

    To be a CEO implies pro active thinking. Planning beyond the here and now. This should have been done 15 years ago - studying trends, developing, population growth. Then do projections on the demand and then develope systems to supply the demand. Eskom was caught sleeping on the job. Stop griping, get of your backside and earn your massive salary. Do now what should have been done 15 years ago - it is called long term planning by the way!!

      Bomb - 2012-05-14 19:53

      the key word here is "pro-active". you cannot use "pro-active" and government in the same sentence, thats a national sin. the circus ruling this place has shown that it is merely a "re-active" organisation. the same is busy happening to the water supply systems all over the place, but NOOOO, EISSSSHHHH, we wiill wait!!!

      Gary - 2012-05-15 07:52

      The only person I hear griping is you! I did not hear any griping in the article from Eskom, just explanations of the way things are. Eskom and Government made mistakes 10-15 years ago, for sure. But many of the engineers and managers now at Eskom are trying to fix a problem that they were not responsible for creating... they either were not working for Eskom or they were very junior at the time these bad decisions were made. The problem cannot be fixed overnight because, as you say, it is 'long term planning'; so what do you expect - all Eskom senior managers should accept meagre wages because of a problem they inherited. In fact the opposite... we should be thankful that there are engineers and managers prepared to work their buts off on a thankless task and they deserve to be paid (relatively) well. And, before you ask, no, I don't work for Eskom... never have.

      Warren - 2012-05-15 09:33

      Eskom did tell the Govt about the potential prblems that could be faced in the future if they didn't invest in new infrastructer, but they chose to spend the money elsewhere as they didn't believe the forcasts. don't blame Eskom. but in any event blaming is a waste of time, planning and resolving is nessisary. currently they are building stations, and-as the article states- encouraging the users to be more efficient about consumption. 5 people live in our house and we use 200 credits of power per month by not having a TV, only having the geaser on for 3 hours a day and being frugal withour use. Be part of the solution, not the problem.

  • Graham Vogét - 2012-05-14 19:25

    What about all the building in the cities that burn lights when the buildings are empty?

  • Andrew - 2012-05-14 19:54

    How about putting Cape Town/Western Cape an hour (in time) behind the rest of the country, this would split the peak demand time and hence make it easier for Eskom to deal with. Geographically, following world time zones, Cape Town should be an hour earlier anyway, it just isn't because of convenience.

  • Philip Mostert - 2012-05-14 20:22

    Stop supplying our neighboring countries, 14 years ago eskom should have listened to the plans that where in place for today instead of breaking down power stations and grabbing profits. My power goes off almost every night at 12:00. Everything in my house is power saving and no electrical heater yet I pay and they cant supply.

  • Eddy - 2012-05-14 20:24

    Its winter time again and ESKOM has its back up against the ropes, the frantic rearranging of load-demands begins. Actually it has been carry on behind the scenes for quite awhile now but very few people have noticed. Already people are discovering that when they boil the kettle, make some stew, or even fry an egg, it takes longer to carry out this mundane action. The ESKOM spin doctors only fool themselves. They are trying to prevent panic. Just like the SAPS brass, try to downplay horrific crimes by saying that statistics are dropping. This said just to polish their badges and give a thumbs up sign. “Look mommy I am doing my job”. Even the woefully silly officials at SANRAL fall prey to this delusion. They imagine somewhere in their big heads that because they have done what should have been done twenty years ago they can act like pirates, black mailers and the Mafia all rolled into one. They should all be arrested!

      Brian - 2012-05-15 09:32

      I will come to mzansi and start a power station

  • Edith - 2012-05-14 20:45

    Try switch off all the lights on ALL the highways that burn all day and we might just be fine with the electricity.I called eskom to tell them but it was like talking to a brick wall!

  • Bless Boswell - 2012-05-14 21:55

    If the government had planned and performed maintenance and had put funds aside for future growth, the blackouts would not be necessary. Instead they jolled, holidayed and lived it up with those funds - and then have the gall to increase the prices. Perhaps it's time we stand together and fight this disgustingly greedy monster.

      koos.vandermerwe.92 - 2012-05-15 02:33

      People should do an organised 'switch off' on a daily basis. When it is peak hour, everyone should switch off for an hour. That will upset their planning and cost them millions.

  • Adri - 2012-05-14 22:16

    VEry few people realize just how bad the situation is already.A large percentage of chrome smelter furnaces have been shut down since February already and current planning is to only switch them back on in September.That means the company cannot produce any chrome for sale and derive an income for half the year,yet they still have to pay all their employees and cover other overheads.While this is going on the management at Eskom is congratulating themselves on a job well done and rewarding themselves with yet another mind boggling performance bonus. Why is EKSDOM now complaining about how tough their job is and where did the power from the smelters go to?

  • aiazmir - 2012-05-14 22:28

    Just another example of ANC incometence.

  • Carry - 2012-05-15 06:23

    ESKOM IS SO TYPICAL OF A PARA-STATAL COMPANY .......... THEY ASKED FOR HUGE INCREASES TO PREVENT THESE ROLLING BLACKOUTS AND JUST LOOK AT WHT IS HAPPENING. THE ONLY THING OUR OUR INCREASED RATES PAID FOR WAS BACKHANDERS AND HUGE BONUSES FOR NON PERFORMANCES.

  • Tim - 2012-05-15 06:50

    SWITCH OFF STREET LIGHTS ON 24 HOURS A DAY!!!! SWITCH OFF STREET LIGHTS ON 24 HOURS A DAY!!!! SWITCH OFF STREET LIGHTS ON 24 HOURS A DAY!!!! SWITCH OFF STREET LIGHTS ON 24 HOURS A DAY!!!! SWITCH OFF STREET LIGHTS ON 24 HOURS A DAY!!!!

  • brionyl.french - 2012-05-15 07:09

    Maybe Eskom and Government should work together with Corporate SA and work on flexi hours so that there is no issue when people go home? Cos people wont all be going home at 5pm and doing the same thing....

  • maria.trautmann2 - 2012-05-15 09:33

    This affects the poor and middle class.. having a ripple effect on food costs! Wow nice shiny new power plant and the whole country is eating salty cracks and can't afford to use electricity. Putting us back in the stone ages..

  • joepvanwyk - 2012-05-15 14:50

    If power peaks could be smoothed out it will not be necessary to resort to power shedding again. Eskom has already made a major contribution by handing out low power lamps. South African developed power management systems can fill the gap by controlling the amount of power that a household, building complex, hotel or factory is using in peak times. Unfortunately Eskom and the authorities are not interested in giving this their blessing.

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