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Eskom January diesel bill rises to near R1.2bn

Mar 09 2015 21:15
Donwald Pressly

Cape Town - The total cost of diesel for the open cycle gas turbines operated by Eskom had risen to R1.17bn in January from R905m in December as the power monopoly faced increasing pressure to match supply with electricity demand, Public Enterprises Minister Lynne Brown has reported to MPs.

In reply to SJ Masango, a DA MP, Brown said some 120 million litres of diesel had been used by the open cycle gas turbines in December. This rose to about 157 million litres in January this year.

“The total cost of diesel for the OCGTs for December was R905m, and for January it was R1.173m,” she said.

Asked by Masango which company had supplied the diesel to Eskom, she said Eskom regularly uses three contracted suppliers for the bulk of the fuel volumes. They are the national oil company, PetroSA, Masana and Afric Oil. “During periods of high burn as experienced during December and January, Eskom uses a number of supplementary supplies with smaller quantities,” reported Brown.

While Finance Minister Nhlanhla Nene said in his budget on February 25 that R23bn would be paid to the embattled Eskom as a “broad package of support” - the first tranche of R10bn in June followed by a R13bn tranche later in the year - there was no specific mention made that some R3bn was being sought by Eskom for the OCGTs to continue the purchases of diesel for the remainder of the financial year to March 31.

READ: Eskom in line for R20bn state injection

It was previously reported that the National Energy Regulator of South Africa (Nersa) had provided the power monopoly the required permission to generate about 450GW a month from the OCGTs.

The Gourikwa, at Mossel Bay, and Ankerlig, at Atlantis outside Cape Town, OCGTs went into operation in 2007 and are viewed as part of the Peaking Plant capacity of Eskom to supply the entity with power when there is peak demand.

ASX-listed Sunbird Energy in February pointed to its joint venture with PetroSA as one of the projects which could help the country’s energy crisis.

It reported that work was advanced to convert the diesel-powered Ankerlig (Anchor Light) peaking power stations into a gas-powered station which would be supplied with gas from the Orange basis, which falls in Namibian and South African sea waters.

Sunbird managing director Will Barker, speaking on the South African Ibhubesi gas project as a new energy source at the recent mining indaba in Cape Town, said the project “is South Africa’s largest gas field ... (it) is held 76% by Sunbird and 24% by PetroSA”.

READ: Eskom may turn to banks to secure diesel supplies

Barker, noting Eskom’s low reserve margin of 1% or 2%, said any outages or unscheduled peaks of demand could force Eskom into a position where they would have to load shed to save the grid from collapsing.

“To help keep those lights on Eskom is more and more reliant upon its diesel-fired turbine facilities. They (are the) only really peaking capacity in the country that provide emergency power to stabilise the grid... however, it is the most expensive power, turbines fired by diesel.”

The plan was for a 400km pipeline running from the Ibhubesi field to Ankerlig as well as Saldanha, up the west coast from Cape Town.


eskom  |  electricity  |  power supply  |  energy
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