SA power plants face large coal shortfall

Cape Town — Eskom faces a 17 million tonne coal shortfall by 2017 at its coal-fired power plants, a cabinet minister said yesterday.
The shortfall is anticipated in 2015 at the Matla, Tutuka and Hendrina power stations and in 2016 at the Kriel and Arnot Power Stations, Public Enterprises Minister Lynne Brown said in a written reply to questions in parliament.

Earlier in May Fin24 reported that Eskom acting chief executive Brian Molefe dismissed charges that it would be facing “a coal cliff” in the coming years.

At a press briefing ahead of the public enterprises budget vote in the national assembly, Molefe was asked whether Eskom would revise its policy of insisting that black ownership of coal suppliers should be 51 percent and whether this presented a problem with securing cost-effective coal supplies.

He answered that there was “200 years of coal under the ground” in South Africa and dismissed the idea that the country was facing a coal cliff where it would have short supplies.

Molefe acknowledged that there were a number of coal contracts coming to an end in the next two years, but Eskom was ready to negotiate contracts “that we think are best for Eskom under the circumstances”.

“It’s not as if South Africa is running out of coal… there’ll be a lot of coal (supplies),” said Molefe

Meanwhile, South Africans can expect up to three more years of power cuts, the President Jacob Zuma says.

President Zuma told Parliament yesterday that electricity demand would exceed supply for the next 24 to 36 months.

Eskom has implemented load shedding to ration insufficient supply and this was now likely to continue for the next three years, he said.

Zuma defended his claim that apartheid was the cause of the electricity supply problem‚ saying: “Eskom added 160‚000 households to the grid in the past financial year‚ which added to the demand for electricity”.

He said these were households that were “not supplied by apartheid”.

Zuma said Public Enterprises Minister Lynne Brown had asked Eskom to accelerate the completion of its build programme.

The construction of the Medupi power station was running several years behind schedule, he said.

In a written reply to a parliamentary question by Democratic Alliance MP Natasha Mazzone yesterday, Brown said the latest approved estimated cost to completion of the station was R105 billion excluding interest during construction.

Brown cautioned, however, that “the materialisation of various risks has created upward pressure on the costs for Medupi. The merits of these increases are currently being finalised internally”.

She said the committed costs (expenditure from inception to end March) on the new power station was R89.6 billion, excluding interest during construction.

Brown also flagged a possible 17-million-tonne coal shortfall by 2017 at Eskom’s coal-fired power plants.

The shortfall was anticipated at the Matla, Tutuka and Hendrina power stations in 2015 and at the Kriel and Arnot power stations in 2016, she said in a written reply to questions in Parliament yesterday. — Business Day