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Eskom to spend R340m to complete build plan

Apr 26 2016 15:08
Liesl Peyper

Cape Town - Over the next five years, Eskom will spend R340m in capital expenditure to complete its build programme, including the Medupi and Kusile coal-fired power stations and the Ingula pumped storage scheme on the border of KwaZulu-Natal and the Free State provinces.

According to Public Enterprises Minister Lynne Brown, the new build programme has managed to up Eskom’s generation capacity which allowed the power utility to do maintenance of existing plants, while keeping the lights on.
 
“Medupi Unit 6 is already providing power to the grid, and Ingula units 4 and 3 have come online. In the next year, Eskom will deliver the remainder of Ingula.”

Brown said she was well aware of the need to keep a downward pressure on Eskom’s costs, particularly coal, to ensure that electricity remains affordable in an increasingly competitive environment.

"Eskom primarily sources 51% of its coal from four major key suppliers at a cost of R23bn of Eskom's total cost of coal of R45bn. Eskom is a 60% off taker of coal in South Africa and should therefore be in a position to command better prices but contrary to that, Eskom coal costs have been growing above inflation levels.”

She added that Eskom has been making capital investment for the establishment of cost-plus mines. These mines have sold coal at a fixed percentage above the miner’s operating costs.

"These arrangements are being reviewed to find the most optimal and cost efficient structure for the consumer,” Brown said.

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