What did South Africa Have Before Candles? Electricity.

The headline is a joke about South Africa’s power supply and electrical grid. In 2008, blackouts disrupted South Africa’s economy, including the critical mining sector, caused by inadequate supply and the failure of state-owned utility to invest in the grid. Similar failures in the United States could eventually wreak havoc, we warned in several Shopfloor posts.

What’s the latest? Blackouts remain one of the major worries in anticipation of the World Cup games, Reuters reports.

However, some positive developments are in the news, “Eskom becomes profitable

South Africa’s power utility Eskom swung to a full year profit from a record loss last year due to higher power tariffs, and says it will close its funding gap soon.

Eskom, which supplies 95% of electricity in Africa’s largest economy, said profit in the year to the end of March was 3,6 billion rand ($466 million) from a loss of 9,7 billion rand.

Cash-strapped Eskom has been struggling to raise the 461 billion rand ($59,62 billion) it needs to build new power plants to meet fast rising demand. Eskom’s Financial Director Paul O’Flaherty said the utility was not far from closing this gap.

Eskom is also confident of having enough power to get through the World Cup games. The utility is committed to adding 10 gigawatts of power to the grid within a decade. And …

While Eskom has had a monopoly on the country’s power supply, independent power producers are expected to join the generation business and be included in the government’s new energy plan currently under discussion.

How to create all this necessary power? From The National, an informative column on South Africa’s power woes by Robin Mills, a Dubai-based energy economist, “South Africa has power to lead with electricity station.”

South Africa, despite being the world’s sixth-largest coal producer, has not built a new coal-fired power station for 15 years. So it was time to put a new plant in place.

Thus it was proposed to build a new facility at Medupi, in the northern Limpopo province, which would be the seventh-largest coal-fired station in the world. The first unit could be online by 2012.

Congratulations to GE for winning the contract to help build part of this necessary project.

Of course the plan — and potential World Bank financing — provoked a ruckus among the global warming alarmists. Better to bless the darkness than to light a candle, in their view. Eventually the World Bank financing included $260 million for wind and solar power projects and $485 million to be spent on reducing carbon dioxide emissions.

Mills observes:

  • It is hypocritical of those in rich countries to deny affordable energy to developing countries unless they are prepared first to close down their own coal-burning facilities, especially while they continue to buy South Africa’s minerals.

And ….

  • Coal-fired power stations are a necessary evil. Medupi can be judged an environmental and economic success, though, if it helps to establish renewable energy in Africa’s largest economy, acts as the country’s first steps towards truly clean coal, brings about a rational and socially fair electricity market and supplies badly needed power to the poor and to industry alike.

Leave a Reply