Cabinet says it remains concerned over the disruptive effect the ongoing power outages and its impact on households and businesses across the country.
As a result, it said that it has adopted a five-point plan to address the electricity challenges facing the country.
To meet the country’s future energy requirements, government is implementing an energy mix which comprises of coal, solar, wind, hydro, gas and nuclear energy. In future biomass, wind power, solar power and hydro-power will contribute 11.4 Gigawatts of renewable energy to the grid, Cabinet said.
“Today Eskom will sign an MoU with the Strategic Fuel Fund and Transnet Ports Authority so that the country can be assured of a regular supply of diesel. The focus will be given to improve the strategic maintenance and operational efficiency to ensure that the level of efficiency is increased from the 72% currently to the target of 80%,” it said.
Eskom said that, in November alone, it burnt through R1.3 billion in diesel, against a total annual budget of R2 billion.
Andrew Etzinger who is the spokesperson Eskom said that the power utility could not, alone, fit a diesel bill of approaching R2 billion per month.
He said that capacity shortage required Eskom to run open cycle gas turbines, fueled by diesel, for up to fourteen hours a day, from between 2-3 hours.
He said that Eskom has received an additional R1.5 billion in funding recently, giving the power utility ‘some breathing space’ to work out a more sustainable financial model from the middle of January.
“Eskom will present a detailed finance plan to manage its cash flow beyond 2015. This plan will be presented to the IMC by December 2014. Simultaneously government will finance the funding model,” Cabinet said.
Co-generation options will be pursued with the sugar paper and pulp industries to harness waste energy to the extent of 1000 megawatts. There are significant opportunities for the importation of gas, Cabinet said.
A coal independent power producer programme will be launched by the end of January 2015 with generation capacity of 2 500 megawatts.
“We are therefore appealing to the public to help our country to reduce the demand of energy which means switching off electricity when not in use. We will have some relief from the 15th December 2014 when manufacturing and industrial processes close for the year. A technical team war room for the implementation of the five point plan is constituted with immediate effect,” it said.
Cabinet said that the five point plan covers:
- The interventions that Eskom will undertake in the period over the next 30 days,
- Harnessing the co-generation opportunity through the extension of existing contracts with the private sector;
- Accelerating the programme for substitution of diesel with gas to fire up the diesel power plants;
- Launching a coal independent power producer programme; and
- Managing demand through specific interventions within residential dwellings, public and commercial buildings and municipalities through retrofitting energy efficient technologies.
Cabinet said that the president, Jacob Zuma, has assigned the deputy president Cyril Ramaphosa to oversee the turnaround of three state-owned companies, namely South African Airways (SAA), Eskom and the South African Post Office.