Power utility Eskom has confirmed that it spent R1.8-billion between mid-December 2011 and the end of May to buy back power from industrial customers, many of which were in the ferrochrome sector.

CE Brian Dames has stressed that the temporary buy-back contracts have been pursued only when customers approached Eskom. They were also confirmed only when commitments had been secured relating to sustaining employment levels and meeting existing contractual commitments.

Eskom delivery unit head Kannan Lakmeeharan indicates that close to 1 000 MW of capacity allocated to participating large customers was secured over the period, but that all the contracts expired on May 31, despite interest from some customers to extend the programme.

The buy-backs arose after Eskom requested its leading customers to suggest ways of sustaining a viable supply/demand balance, while Eskom moved to accelerate a much-needed maintenance programme.

A number of large companies indicated a willingness to sell back power to the utility to create the space needed by Eskom to pursue its maintenance programme.

Therefore, Lakmeeharan dismisses arguments that the costs to Eskom and the economy outweighed the benefits.

“The alternative would have been to run our gas turbines, which would have been more than double the price. Secondly, we could have entered a risky situation around supply and demand and that would have cost the economy more, especially if it affected other industries that were producing,” he explains.

The ‘space’ created has also enabled Eskom to reduce its outage backlog, which stood at 36 outages at the end of May 2011 and currently stands at around 26 units. Eskom plans to eliminate the backlog by the end of 2013.

During the post-buy-back period, the utility will continue to pursue a mandatory energy conservation scheme with large customers to provide a ‘safety net’ should the utility find itself in supply/demand difficulties.

However, in the interim, 130 of its leading 250 customers have agreed to voluntary saving schemes and Eskom is working with these customers to lower consumption levels without affecting production.

It is also moving ahead with its demand-side management programmes, as well as its demand market participation (DMP) scheme with large customers and a demand-response aggregation (DRA) initiative for smaller commercial and industrial consumers.

Under the DMP scheme it has secured about 400 MW for use in two-hour spurts, while the DRA initiative will be ramped up to 500 MW by July.

“Once we have learned how to use the demand aggregator, we believe there is potential to save up to 2 500 MW,” Lakmeeharan says.