No load shedding expected in 2016: Eskom CEO

Eskom’s CEO Brian Molefe said that the power utility does not expect to shed load for the remainder of the year, following almost daily cuts in power for long periods of 2015.

“We don’t foresee load-shedding for the year unless something goes terribly wrong, but it is still conceivable because we are not out of the woods yet,” Eskom’s CEO Brian Molefe said, as reported by Reuters.

Fin24 reported that Eskom completed the third unit of its Ingula Storage Pump Scheme on March 6 this year, and will rely heavily on the extra generating capacity to help with electricity provision during the winter months.

The R25 billion project is situated between Ladysmith and Harrismith in the Little Drakensberg and will be able to provide an additional 333MW capacity once it is fully operational by the end of 2016.

Public Enterprises Minister Lynne Brown and Molefe briefed the media on Thursday to give an update on Eskom’s build programme and share some of the positive developments at the power utility.

“I’m pleased to say that Ingula is running ahead of schedule,” Molefe said. “By end of the year the entire plant will be working. The first machine was supposed to be operational by March 2017 – we won one year – and the rest of the scheme will be completed at the end of the year.”

Ingula is a peaking hydro power station, which consists of an upper and a lower dam or reservoir and a powerhouse located 116 storeys underground in two excavated underground caverns.

According to Molefe once Eskom’s build programme is completed there should be a total of 10 000MW of generating capacity in South Africa. “I suspect in the next five years’ time South Africa should have surplus energy which we could either sell to other African countries or use locally to bolster economic growth.”

Brown said she was exceptionally satisfied with the leadership shown at Eskom since Molefe’s appointment in March last year. “There is sound performance and the financial position has improved, despite the unfavourable decision from Nersa (National Energy Regulator of South Africa.”

During question time Brown and Molefe were asked why Eskom still needed to apply for tariff increases in light of the fact that the utility had R41bn cash in hand.

Molefe said it was important for Eskom to have liquidity, as it is one of the things ratings agencies take into consideration when they revise a country or an entity’s credit rating status. “The R41bn is needed for liquidity. We need that money in the bank. For our build and maintenance programmes we need a combination of both tariff increases and access to capital markets.”

Asked if South Africa would then still need nuclear energy, given the probability of having surplus energy, Molefe said he did indeed believe so. “Nuclear is clean and cheap and we’ll have an opportunity to sell electricity to the rest of Africa and generate income. Having nuclear energy available will also reduce electricity costs to ordinary citizens. But the nuclear programme is a policy-level decision,” Molefe said.

As for Eskom’s role in the nuclear programme, Molefe said Eskom would be the owner-operator. “Cabinet will most likely hand it to us for operation, like with Koeberg.”

Reporting with Fin24

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No load shedding expected in 2016: Eskom CEO