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Cape Town - Government is leaning strongly on the private sector to help it achieve a five-point turnaround plan for the embattled power monopoly Eskom.
This includes garnering loans, extending cogeneration, tapping into waste energy and importing gas, it emerged at a cabinet briefing on Thursday.
Public Enterprises Minister Lynne Brown said – at a briefing in Pretoria beamed to Cape Town – that: “Eskom has enough money to provide diesel (for its current needs).”
Eskom turns to diesel powered turbines when it is having difficulties with its coal-fired plants.
Brown noted that Eskom’s cash-flow would be fine for the next two months: “I am quite comfortable that to January 2015 Eskom’s cash flow will be fine.”
However, after that it would not be plain sailing.
Pressed on whether the diesel powered option was now a long term option, Brown was adamant that this could not be the case. That would bankrupt Eskom, she said: “Eskom would not be able to afford that.”
What government had to do in the longer term was to ensure that the state power monopoly had enough money to cater for its needs. This could take the form of guarantees or providing “the (fiscal) space” for Eskom to garner loans and “raise its own money. That would be a combination of financial processes.”
Meanwhile, Minister in the Presidency Jeff Radebe said cabinet “remains concerned” over the disruptive effect of the recent power outages on the lives of South Africans and its impact on households and businesses “across the country”.
One of the five points was to extend the cogeneration “opportunity” through the extension of existing contracts with the private sector, he said.
Energy Minister Tina Joemat-Pettersson said at present about 1 400 MW was supplied to the grid through cogeneration – through power purchase agreements with the private sector. These agreements expired in March, but they would be extended in January to ensure “that this capacity is ensured” in line with the Electricity Regulation Act.
Government would start procurement processes for an additional 1 000 MW, which Joemat-Petterson hoped would be brought on line within 18 months – the middle of 2016. She expressed hope that the additional electricity supply’s costs would be contained through “extensive contract management and oversight”.
She said government was also hopeful that another thousand megawatts would be brought on stream by using gas.
This was another key element of the five point plan, noted Radebe. Government would accelerate the programme “for substitution of diesel with gas to fire up the diesel power plants”.
Radebe noted there were significant opportunities for the importation of gas. While he did not specify, he was believed to be alluding to the gas fields of Mozambique, South Africa’s eastern neighbour.
A third element of the five point plan was the “retrofitting energy efficient technologies” at the 183 municipalities around the country. This would also apply to commercial and residential buildings, Radebe pledged.
The fourth element of the turnaround plan was launching a coal-independent power producer programme. The focus is expected to be on harnessing waste energy from the sugar, paper, and pulp industries. The latter is expected to produce about 1 000 MW.
The fifth element of the turnaround plan was to achieve the various interventions “in the period over the next 30 days”, the cabinet statement said.
Cabinet decided to put Deputy President Cyril Ramaphosa in charge of overseeing the turnaround of Eskom as well as that of South African Airways and the embattled South African Post Office.
