Eskom reserves billions for new power stations
Eskom will increase its capital expenditure by 44 percent over the next five years to build new power stations.
|||Johannesburg - Power utility Eskom would increase its capital expenditure by 44 percent to R324 billion over the next five years to build new power stations, the state-owned company announced yesterday.
The cash-strapped utility also said it had R85bn, representing nearly all of the capital needed, for 2016 and 2017 in a presentation to Parliament.
Read: Nersa explains 9.4% Eskom power hike
“There is a significant amount of the funding that will be required over the next two years that is relatively committed already in terms of signed facilities that we can draw on as and when projects require the funding,” said Anoj Singh, Eskom’s chief financial officer.
The company had also managed to save R9bn and increased net profit 22 percent to R11.3bn at the end of September and was not in danger financially, he said.
No load shedding
Eskom assured Parliament that there would be no load shedding in winter as it had kept a tight schedule for maintenance.
However, the power utility warned Parliament yesterday that the 9.4 percent tariff increase granted by the National Electricity Regulator of South Africa (Nersa) last week would leave a hole of R11bn in its balance sheet.
Eskom chief executive Brian Molefe said despite the Eskom warning made last week that there would be load shedding, following Nersa’s decision, contingency measures had now been put in place to prevent load shedding during the winter period.
He said Eskom would be forced to use diesel to avoid load shedding, which was still one of the most expensive sources of energy.
“We were not threatening South Africa last week, we were reflecting on the situation as it is,” Molefe said.
“Although we are not happy with the 9.4 percent increase, we will continue on our path that there will be no load shedding and take whatever blows we have to, with the hole of R11bn in our balance sheet,” he told Parliament.
Molefe also told Parliament that the utility had cut down drastically on its reliance on diesel from R800 million in October to R555m in November, R278m in December, R188m in January and R40m in February this year.
Eskom is building three new power plants to help shore up power reserves in Africa’s most industrialised country, and expects to add 5 620 megawatts to the network by 2018 when generating units at the Medupi and Kusile coal-fired plants come online.
Reiterating his support for South Africa’s proposed nuclear build plan, Molefe said the sole nuclear plant, Koeberg near Cape Town, provided the cheapest form of energy.
Speaking to reporters after Eskom’s presentation, a senior energy official said the government would request for proposals at the end of the month to add 9 600MW of new nuclear power to the grid.
To meet its targeted nuclear generation capacity, the government has said it planned to build six new nuclear power plants by 2030 at a cost estimated between R400bn and R1 trillion. Molefe also announced that Unit 3 at Ingula in Ladysmith, KwaZulu-Natal, would come on stream next January. It would be followed by Unit 4 in March, Unit 2 in May and Unit 1 in July of 2017 in the same plant.
Medupi’s Unit 5 would go live in March 2018 and Unit 1 at Kusile would come on stream in July 2018, he said.
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