Eskom must power up before 2010
May 24, 2004
By Edward West
Cape Town - Eskom would have to bring new electricity generation capacity on line by 2010, either through the import of new hydroelectric capacity or through the construction of a new power station, and the decision would have to be taken soon, Yousuf Haffajee, a market development manager at Eskom, said at the weekend.
Speaking at the Euromoney conference, Haffajee said demand for electricity last year was 6.5 percent year on year - higher than anticipated and driven by high capacity use of the furnaces producing steel, ferroalloys, aluminium and gold, because of the relatively high price of these commodities.
High air conditioner use towards the end of the year had also bumped up demand. South Africa's aluminium, steel and other metallurgy industries - about 135 key customers - take up 40 percent of Eskom's capacity.
There was enough electricity capacity at present, but indications were that by 2006/07 the country might run short of peak demand capacity. There would, however, still be surplus capacity during off-peak periods.
Some methods to be considered for generating more capacity were solar thermal generation, imported hydroelectricity, a conventional coal plant, gas turbines, fuel cells, the pebble bed modular nuclear reactor, wind energy and fluidised bed technology.
It must be taken into account that the government might legislate certain renewable energy targets.
Haffajee said the fact that Eskom generated 50 percent of the continent's power indicated the lack of investment in energy in Africa. However, there was still "enormous" potential for hydroelectric power generation in southern African countries such as the Democratic Republic of Congo, Zimbabwe and Zambia.
Eskom did not believe that bringing on new capacity in the years to come would have a negative impact on the competitiveness of power produced in South Africa.
In South Africa, average electricity cost below $0.02 (13.5c) a kilowatt hour, while in the US the figure was over $0.07 and in the UK it was just under $0.05. The latest 2.5 percent increase in electricity prices continued a trend of increases that was well below inflation. But the price would have to rise in years to come.
Notwithstanding this, he said, Eskom would continue offering innovative pricing options to entice large energy consumers to invest in South Africa.
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