Power reserves hinge on demand going down, says Eskom

7 October 2009

Eskom chief executive Jacob Maroga says it is hoping to recover a healthy power reserve margin by 2014.

Briefing MPs in Parliament on Tuesday, Maroga revealed the power utility was still short of meeting its ideal reserve of 15 percent or higher..

The lack of reserve capacity was largely blamed for rolling power cuts experienced across the country in 2007 and 2008.

Maroga told MPs Eskom can only build up its reserve margin if demand goes down.

“Reserve margin is a factor of capacity and demand. We don’t know where demand is going to be. We’ve got an estimation of where demand is going to be in the next five years, but we are saying we believe we’ll recover to about 15 in the next five years.”

Maroga also told MPs the parastatal has set the ball rolling on renegotiating long-term aluminium contracts with global mining house BHP Billiton.

He refused to divulge details on the talks, but said that they are reviewing the contracts which link commodity prices to how much mining houses are charged for electricity.

Maroga says they want to remove that link and charge mining companies standard rates.

MPs in turn again warned Eskom that the practice of entering into iron-clad long-term contracts with large mining houses is problematic.

Original Article Link:

http://www.eyewitnessnews.co.za/articleprog.aspx?id=23404