Uncategorized 26.2.2014 06:11 pm

Medupi to come online at year-end

FILE PICTURE: The Medupi power station during construction in 2013. Picture: Nigel Sibanda.

FILE PICTURE: The Medupi power station during construction in 2013. Picture: Nigel Sibanda.

Electricity, or the lack of enough electricity, has been a major constraint to economic growth.

Power supplier Eskom has been struggling to match demand this summer and there are fears that winter will come with load shedding.

The beleaguered Medupi power plant was suppose to help SA meet its electricity demand a number of labour and quality issues has seen the project delayed.

Eskom will receive nearly R60 billion from government in the new financial year – the biggest recipient of money amongst State Owned Enterprises.

Speaking to the media prior to his 2014 Budget Speech in Parliament, Finance Minister Pravin Gordhan said there could be “no doubt” that the lack of available energy had been a constraint on economic growth and recovery following the global recession.

“Medupi is what Medupi is,” he said in response to questions from the media.

“So there is nothing we can do about it,” the minister said adding that the situation is “regrettable”.

In the 2014 budget Review, Treasury indicates that the Mepudi plant’s first unit will come online towards the end of the year.

In addition, Eskom has “scaled down its medium-term capital expenditure plans – though they remain significant – given a lower revenue forecast,” the Review states.

In the 2015/15 financial year, the energy supplier will receive R52.2 billion from government, and R40 billion the year thereafter.

While the reduction in capital expenditure is good for a constrained fiscus, it could be problematic going forward should the economy start to grow. This is because increased demand on the back of economic growth may not be met.

Nevertheless, the Review lists a number of initiatives Eskom has embarked on to keep the lights on in South Africa:

  • Contracts for 47 renewable energy projects were concluded in 2012 and 2013, with most under
  • construction. These are expected to add generation capacity of 2 459 MW between 2014 and 2016. The
  • third procurement round is finalising another 1 457 MW of capacity from 17 projects with higher local
  • content and lower costs.
  • In 2013, through the Integrated National Electrification Programme, Eskom and government provided
  • 200 000 households with electricity connections, constructed 350km of medium voltage lines, upgraded
  • an additional 220km of lines, and upgraded 10 substations.
  • A 75 MW solar plant in Kalkbut, Northern Cape, was connected to the grid in September 2013. In
  • Cookhouse, Eastern Cape, Africa’s largest wind farm (135 MW) will be fully commissioned by May 2014.
  • South Africa’s first baseload gas-fired power plant was recently commissioned by Sasol. Some of the
  • plant’s 140 MW capacity will be fed into the national grid. This project is funded by Sasol.

 

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