[DEBATE] : Eskom documents show business knew of crisis, Louise Flanagan, Star

[Dominic Tweedie]

Eskom documents show business knew of crisis


Louise Flanagan, The Star, Johannesburg, 11 February 2008

Government still struggling to find real answer to the crisis


Four weeks after Eskom started load shedding, government leadership is
still fumbling around in the dark.

"Move slower, a lower speed will increase the efficiency in terms of
km per energy unit," instructs a bizarre pamphlet on energy efficiency
tips handed out last week amid fanfare by Minister of Minerals and
Energy Buyelwa Sonjica.

It's an instruction that government top brass seems to have taken to heart.
"Moving slower also reduces the distances to be driven within the
available time," states the pamphlet in a confusing "tip".

It would be laughable if Eskom's engineers weren't struggling to keep
the lights on and businesses weren't juggling the costs of buying
generators against the likelihood of going bankrupt without them.

Both Eskom and the government clearly knew a power crisis was likely
this summer, although probably not the extent of it - just read some
of Eskom's reports.

One Eskom document recounts how Business Unity SA was briefed by Eskom
CEO Jacob Maroga in September regarding security of supply.

Maroga stressed that "Eskom will be facing significant capacity
constraints over the next three to five years, resulting in a high
probability for mandatory load shedding across South Africa".
But load shedding caught most consumers by surprise.

Eskom executives have since made an effort to explain the situation in
briefings to the utility's bigger clients, redrafted power
station-building plans and massively increased its expansion budget.

But politicians - who failed to authorise the building of new power
stations in time, which is the main cause of the crisis - have fiddled
with "plans" that a team of Grade 8 kids could have drawn up.

Subsidies for energy-saving equipment have been repeatedly mentioned,
but clear amounts, dates and means of accessing these are missing.

The City of Joburg has produced a 10-page written outline on what to
do, with specific energy-saving interventions, numbers of gadgets to
be found (but not how this will be done), costs, deadlines and
back-of-an-envelope estimates of how much energy can be saved.

This is more than some other municipalities have done.

Government departments have failed dismally to explain how - or
whether - they are cutting their power use. Some were caught burning
lights all night in empty offices.

Eskom is relying heavily on demand-side management (DSM), which means
getting consumers - residential to heavy industry - to use less.

This is harder than it sounds. In 2007, DSM saved 169,8MW, and during
the Western Cape's 2006 power problems (remember that dropped bolt in
Koeberg?), 500MW a day was saved through DSM.

And if you think it's going to get better, think again: Eskom's annual
report for 2007 plans an "aggressive" DSM programme "that is intended
to effect permanent reductions in demand by about 3 000MW by 2012 and
a further 5 000MW in the subsequent 13 years to 2025".

The Eskom report says this will be achieved by cuts of 12% by 2015,
including cuts of 15% for industry - more than the 10% it is being
told to cut now.

The Department of Minerals and Energy (DME) drew up an "Energy
security master plan - electricity 2007-2025" in the middle of last
year which also proposes cutting demand by 12% by 2015, and with the
same DSM targets as Eskom.

The DME was clearly aware of the generation problems. "Current planned
capacity-expansion initiatives are not expected to meet the demand
requirements cost-effectively within the required timeframes,"
according to the DME proposal.

The plan calls for energy-efficiency measures such as solar
water-heating and energy-efficient light bulbs to be rolled out
immediately. This has not yet happened.

The DME plan was based on an annual economic growth rate of 3,5%,
calculated from two-year-old statistics from the South Africa Alive
with Possibility website - old statistics from a good-news website
aimed at tourists.

The DME should have listened to Finance Minister Trevor Manuel, who
told parliament in his Budget speech in February last year that the
economy grew by 4,9% in 2006, and growth of just over an average of 5%
a year was expected for the next three years.

The DME plan did note that the government aimed for a 6% growth rate,
which needs 4% electricity generation growth, and noted the increase
in demand to a peak of 36 474MW in June last year, but failed to note
that this was 4,7% higher than the peak a year earlier.

Eskom expects to spend R300-billion on building extra capacity over
the next five years, with the big stuff starting to produce
electricity from 2012.

A five-year budget to increase capacity has jumped - within a few
weeks - from R97-billion to R150-billion, and now to an astonishing
R300-billion.

As a comparison, R300-billion is the equivalent of more than half of
the entire country's R534-billion Budget for 2007/08.

On Friday, President Thabo Mbeki announced in his State of the Nation
address that building would be fast-tracked and money for Eskom would
be announced in the Budget on February 20.

While the new power stations should add more than 17 000MW to the
grid, the budget doesn't cater for replacing any power stations, now
in midlife. Ageing plants need more maintenance.

The DME's plan estimates that planned outages of coal-fired plants
will increase to 7,5% and unplanned to 5,5%, which drops availability
to 87%. The Eskom website indicates that, about two years ago, nine of
the big 11 plants were running at between 90% and 97% availability.

Last week Eskom would not answer questions about generation
availability in January.

However a "national response" document released by Sonjica and Public
Enterprises Minister Alec Erwin last month lists plant availability
during the first four days of load shedding as 76% to 78%.

The DME has put out for public comment a badly written shortlist of
regulations ordering the installation of energy-saving devices in
commercial and residential buildings (but oddly, not in government
buildings), but is still trying to work out regulations on quotas.

Quota regulations are due for submission to a
government-Eskom-business task team on Wednesday.

The Public Protector and the National Electricity Regulator of SA are
investigating Eskom following last month's outages.

From: http://www.thestar.co.za/index.php?fArticleId=4248490

1047 words

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