New projects to be delayed by six months – Eskom

Posted On Thursday, 06 March 2008 02:00 Published by eProp Commercial Property News
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State-owned power utility on Wednesday moved to clear the confusion it had created, confirming that it would delay new projects requiring more than 100 kVA for up to six months

Brian DamesState-owned power utility on Wednesday moved to clear the confusion it had created, confirming that it would delay new projects requiring more than 100 kVA for up to six months.

It said in an emailed statement that projects it had already committed to would go ahead unaffected.

The 100-kVA cap was about the same power consumption level of a large residential house.

Experts earlier in the day expressed disbelief over reports that Eskom and Johannesburg's City Power would delay any new building projects of this size in the country for the next six months, saying such a move would send South Africa into "immediate" recession.

"It's highly unlikely that this is true," an analyst said, referring to comments a Department of Minerals and Energy (DME) official made. "It is simply not possible."

Econometrix chief economist Dr Azar Jammine echoed this, saying that he was "sceptical" of it being true, adding that the move would be "unbelievably dramatic".

CONFUSION

Reports of the situation first appeared in Johannesburg-based Afrikaans newspaper Beeld.

The DME was not aware of such a strategy, until after deputy DG Nelly Magubane confirmed it with Eskom after being contacted by Engineering News Online.

"I spoke to Tony Stott [a senior manager at Eskom], and he confirmed that exactly what is written in the paper is exactly what he said," Magubane said.

However, Eskom chairperson Valli Moosa told news service Bloomberg News that "there isn't such a policy". Later in the day, the news wire quoted Eskom spokesperson Andrew Etzinger as saying that "factory size" projects would not be approved in the period, and COO Brian Dames saying it would consider new projects on a "case-by-case" basis.

'SUPPLY CRUNCH'

"The feeling is that right now we must be honest," Magubane said. "We really are in a supply crunch, and therefore we need to try and delay some of the problems we have got."

"We are going to see the impacts of the demand-side programmes that we are currently working on in the next six months or so," she stated.

"Effectively, at this point in time, it wouldn't be prudent to actually approve some of those new projects without making sure that there is enough space to actually supply."

Magubane went on to highlight that the projects were only being delayed.

"We are not turning them down, they are delaying them for the next six months," she said.

Magubane said that Eskom and Johannesburg's City Power would honour the supply contracts that they had already signed, but would delay signing new ones for "six months or so".

She went on to state that the problem was "really prevalent in Gauteng" - the economic centre of Africa - where electrical distribution infrastructure was also a major issue.

Johannesburg alone used some 10% of Eskom's generation capacity.

Eskom was rushing to bring on new capacity, as it was not able to generate enough electricity to meet South Africa's power demands.

 

Last modified on Saturday, 02 November 2013 08:29

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