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Eskom's plan to keep the lights on

4 December 2014 4:20 PM

After running out of capacity in 2008, Eskom embarked on the biggest build program in its history and you are paying for it.

If you have not already read the first part of our simplified history of how Eskom ran out of power perhaps you should.

Eskom in 2008 instituted extensive rolling power blackouts euphemistically called load shedding. The reason is that after many years of abundant cheap electricity the demand exceeded supply.

Eskom had been seeking funding to plan and build new capacity from the Government in the 90's, but the Government had in turn hoped to sell a stake in Eskom and fund the new capacity that way. No-one wanted to buy into what was one of the world's cheapest suppliers of electricity that was facing an expensive build program.

Eskom had three options.

  1. Build more power stations
  2. Get citizens to use less power
  3. End uneconomical business supply deals

It has undertaken to do all three.

Building new capacity

There are five plants under construction or nearing completion and three stations that have been brought back online at a total cost of R340 billion by completion in 2018. These plants will increase capacity by 17 000MW which, according to Eskom is their biggest build program in the company's history.

Reducing demand

You will recall the first response after load-shedding began was to implore South Africans to use less power, it was followed by a massive campaign to replace incandescent bulbs (the ones with a filament) with compact fluorescent lights (CFL's). CFL's use a lot less energy as much as 10 times less and Eskom provided over 45 million bulbs.

They also launched the Power Alert website (which is now on hold) with messages broadcast during prime time TV to let consumers know what the state of the grid was. The efforts, according to Eskom was able to reduce consumption on average of 174MW.

And they offered rebates for fitting solar geysers which at one point saw 10 000 applications being received a month.

Big electricity users

Dealing with the uneconomic business deals is going to be the most difficult to resolve as Eskom has contracts with big energy users like mines and ore smelters who do play an important role in providing employment and a source of foreign exchange even if their contribution to the total GDP is not as significant as other sectors. Government will need to find a balance between the various sectors of the economy and residents to ensure we can keep the economy growing and paying for the new capacity while not making it unaffordable to residents or putting our credit rating at risk by carrying enormous debt.

It means that even as Eskom appears to slowly start getting ahead of shortfall in supply, South Africa will have years of electricity price increases in store to catch up for all those years of not setting money aside for new power stations and setting the electricity price so low for so long.

If you still want to know more you might take a look at the section that explains how the electricity is actually generated or what you need to know while we still have to contend with load shedding.

4 December 2014 4:20 PM