Eskom on the offensive

03 April 2008 - 02:00
By unknown

Joel Avni

Joel Avni

Eskom will have to stop projects such as building power stations unless it gets the 53percent tariff increase it has asked for, chief executive Jacob Maroga said yesterday.

Maroga said the utility would have to draw up new budgets if the income it planned to spend was not approved by the national energy regulator.

Trade unions and other civic groups representing the poor have protested against the utility's suggested hikes.

But Maroga said the power company's hands were tied.

South Africa has long had the cheapest electricity in the world, but those days are over. The government has apologised for not heeding Eskom's warning 10 years ago that money had to be invested in new power stations.

Now the country has run out of generating capacity, putting the economy and development plans at risk.

"If we only rely on [new] supply, the numbers are not looking good for many years," he said.

Eskom hopes to spend almost R350billion on new plants by 2012, but even that will not keep up with demand. The country will be out of the woods only when new nuclear plants start feeding the national grid in 2016.

The utility plans to double its capacity by 2025 with a R1,3trillion building programme.

Until then, consumers from big business to individual households would have to treat electricity as a precious resource and cut back on usage, Maroga said.

And to reinforce his point, rationing kicked in again on Tuesday, with rolling blackouts throughout the country.

Eskom needs the three months of rationing to take overworked plants off-line and maintain plants before heavy demand in winter.

The company is also trying to build up stockpiles of coal at its power stations, from a 12-day supply to a more secure 20 days.

Much of this coal is being bought on short-term contracts at a far higher price than Eskom normally pays.