South Africa rolling power blackouts may be back, warns Eskom South African utility Eskom declared a power emergency on Tuesday, urging key industrial customers to reduce consumption to ease pressure on the grid and warning it might apply rolling blackouts similar to those implemented five years ago. Eskom provides 95 percent of South Africas electricity but has struggled to ensure supply as it races to bring long-overdue power plants online after the grid nearly collapsed in 2008, hitting mine output in the worlds top platinum producer and pummelling the rand currency. The power system is severely constrained today due to the loss of additional generating units from our power station fleet and the extensive use of emergency reserves, the company said in a statement. This has necessitated the need for Eskom to declare an emergency in terms of the approved regulatory protocols, it said, adding it had asked leading industrial customers to reduce consumption by at least 10 percent. Power supply in Africas biggest economy would remain tight for two weeks after some of Eskoms ageing generating units tripped on Tuesday while others were booked in for regular maintenance, a company spokesman said. Mining giant BHP said Eskom had reduced power supply to its aluminium smelters in line with an existing agreement to stabilise the national grid at times of stress. The provision allowed the power firm to do this without compensation for loss of production, BHP added. The 2008 power crunch, blamed on years of underinvestment that saddled Eskom with a creaking fleet of power plants, forced mines, factories and smelters to shut down for days, costing the economy billions of dollars in lost output. Eskoms publication of provisional schedules for load-shedding, as rolling black-outs are known, will also hit a raw nerve with South Africans who blame the ruling African National Congress, which faces an election next year, for infrastructure failings. Spot platinum rose nearly 1 percent to a session high $1,422.50/oz after Tuesdays announcement and the rand lost nearly one percent against the dollar, with analysts saying it could hold back foreign direct investment in an economy still struggling to shrug off a 2009 recession. Whilst we may well not see a repeat of 2008 load shedding, it is worth being reminded that at that time there was a 20 percent sell-off in the rand and a large volume of bond outflows, said Nomura emerging market analyst Peter Attard Montalto. Eskom expects the first electricity from its coal-fired Kusile plant to come onto the grid in December 2014.Another huge coal-fired plant, Medupi, is expected to deliver its first power in the second half of next year, a delay of at least six months caused by labour unrest and what Eskom has called underperformance by contractors. The country depends on coal for 85 percent of its electricity supply of around 41,000 megawatts, almost all of it generated by Eskom.
Posted on: Sun, 24 Nov 2013 11:13:31 +0000
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