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Polity
Article by: Terence Creamer Published: 18 Aug 2010
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| SA's power gap becoming worrying again, big business warns | |
| Big business in South Africa indicated on Tuesday that it was giving priority attention to programmes that could help offset an anticipated electricity supply shortfall that was expected to re-emerge during the course of next year. The system had stabilised since the rolling blackouts of 2008, mostly as a result of a decline in demand, precipitated by the recession of 2009 - South Africa's first in 17 years. However, demand had recovered steadily during 2010 and State-owned power utility Eskom had begun warning that the system would become vulnerable from 2011 through to 2012, ahead of the synchronisation to the grid of Medupi's first of six 790-MW units in April 2012. There could also be supply-side threats as from 2017, unless decisions were made, during 2010, about further base-load capacity beyond the R142-billion Kusile power station, for which funding was still being secured. The funding plan for Eskom's R124-billion Medupi station was reportedly in hand and either government or Eskom should announce a final funding plan soon. Business Leadership South Africa (BLSA) chairperson Bobby Godsell reported that work was continuing on a business proposal to save, create efficiencies, or develop cogeneration, or own-generation, involving 5 000 MW over the medium term. He added that it had noted progress in the area of clarifying rules for private participation and in the roll-out of demand side management programmes. However, the BLSA was aware that the "good times are almost over" with regard to South Africa's supply/demand balance and that there was an "urgent need to close the gap". In the longer term, there was also a need to find sustainable funding models to fund the expansion of the power network. "You can't grow your economy without growing your electricity grid," Godsell, a former Eskom chairperson, stressed. "The big focus at the moment, is to try and close the funding gap on Kusile, because clearly that is needed," he added. BLSA's CEO Michael Spicer argued that there was also a need in the energy economy, more generally, to facilitate private sector involvement. He said that in the context of scarce financial resources, the funding model for all energy projects had to be reassessed, including a project such as the proposed $11-billion greenfield oil refinery in the Eastern Cape, dubbed Project Mthombo. "In our discussions with government, we are saying that much greater private participation in the infrastructure roll-out has to be considered if we are to attain the goal of putting in the necessary infrastructure, which is required for higher levels of economic growth, or even to defend the current levels of economic growth," Spicer said. The BLSA again argued that there was not "sufficient space" currently for private participation in South Africa's infrastructure milieu. |
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