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Friday, May 16, 2008

Nuclear plans will triple South Africa’s power prices

And Eskom GM says a mild winter will go a long way to minimise load shedding.

The government’s plan to include nuclear and renewable sources in the energy mix could push electricity bills even higher than currently foreseen, a senior Eskom official said yesterday.

The Cabinet has formally committed the country to build conventional and Pebble Bed nuclear power stations.

In his budget address to Parliament yesterday, Public Enterprise Minister Alec Erwin said South Africa had to double its generating capacity over the next 20 years but also reduce carbon emissions, “ which means that we have to diversify our primary energy sources away from coal”.

Andrew Etzinger, Eskom’s general manager: demand-side management, said yesterday that between now and 2024, SA needed to double the price of electricity to pay for capital expenditure and input costs. But if the country also opts for nuclear and renewable energy options, this will put upward pressure on costs and prices would need to increase more than threefold.

Eskom has asked for a 53% increase excluding inflation, followed by two further 50% increases over two years.

Etzinger was cautiously optimistic about winter, but said South Africa needed mild weather and an ongoing reduction in demand for electricity to see winter out without load shedding.

The system remains vulnerable.

Eskom plans to announce a winter plan, which will include its expectations for reduced demand, next week, so that people understand that the situation remains critical.

While domestic and commercial users saved between 5% and 8% during load shedding — with a total saving including industrial users of 7% — power stations still needed additional maintenance going into winter, he said.

Eskom has planned for various scenarios for winter depending on the weather and the amount of power saved. For the best outcome, SA needs a combination of good weather and demand reduction of 10%. In that case power cuts may be avoided.

“I suspect there will be days when the system is tight to the extent that we won’t meet demand,” Etzinger said, adding that the chances increased if there were three to four days of sustained cold weather across the country.

But he said current levels of demand were similar to last year, but with some additional new capacity and with maintenance and coal stocks picking up, “we are in better shape than last year”.

One of Eskom’s biggest concerns was to ensure that a 10% power saving could be locked in on a sustainable basis. This is likely to be based on quotas for certain sectors and tariffs which would include penalties and rewards. Reuters reported yesterday that the African Development Bank has lent $500- million to Eskom.

(Source: The Times.co.za)


Anonymous said...

South Africa needs to stop talking and just start building. On the bright side planning to double their production is a very bold and ambitious plan.

On the world nuclear association site they say SA would like to meet half of that doubling in capacity with nuclear plants. And they are looking at building 10 EPR's or 17 AP-1000's. That would make them one of the main customers.


Anonymous said...

Btw I wonder if some of the cost for them is based on interest rates. Basically interest costs are a huge factor for nuclear.. a developed nation with like 4% interest rates nuclear is quite cheap.. or Japan with like 2% interest rates.