Power utility accelerates plant upgrades

State power utility Eskom is to accelerate the implementation of its capacity programmes and will invest R150-billion over the next five years in upgrading the country’s power supply infrastructure.

The biggest percentage of expenditure will go towards improving the utility’s generation capacity through building a new power station.

Money will also be spent on reopening three mothballed power stations, and 26% of the budget will be spent on transmission and distribution systems.

The electricity demand has outpaced existing supply, how- ever, with the growth in demand currently at 4% annually.
Eskom spokesperson Sipho Neke says the current maintenance of Eskom’s generation, transmission and distribution infrastructure will continue until the end of summer, thus putting further strain on the utility to supply electricity.

“The electricity supply system will be tight this year with the risk of load-shedding higher than in previous years due to low reserve margins against increased demands,” Neke explains.

Eskom is currently operating with a reserve margin of 8% to 10% against an ideal of 15%.

Neke says the company expects the reserve margin to continue on a downward trend for the next five to seven years until a new baseload power station comes into operation.

He says this means that Eskom needed to ensure that the plant’s performance will be at a very high level, accelerating energy saving initiatives while also strengthening partnerships with municipalities, and focusing mainly on the distribution infrastructure.

“It is unfortunate that benefits of most of Eskom’s capacity expansion projects are only expected to be realised in 2009,” Neke comments.

Last month, the National Energy Regulator of South Africa decided to increase Eskom tariffs by 14,2%, following proposed increased tariffs on the Eskom price plan.
The decision follows after Eskom filed a submission to increase electricity prices by 18,7% to the national regulator.

The resolutions included an adjustment of R1,27-billion to cater for the additional return and depreciation resulting from the increased regulatory asset base from 2008 to 2009.
A further adjustment of R2,4-billion is included to cater for the increased primary energy cost expected for 2008 to 2009.