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New measures to cut power

Department of Energy
Nelisiwe Magubane
Johannesburg, South Africa — MININGREVIEW.COM — 08 June 2010 – The government of South Africa will agree with mining companies and other power users this year on new measures to cut consumption of electricity from 2011, when supply is expected to be tight.

Announcing this here, Department of Energy director-general Nelisiwe Magubane said the government would introduce incentives for companies that reduce the use of power and penalties for those that fail.

She added that her department, state utility Eskom and industrial users were already negotiating plans to cut power usage, but that it was too early to determine the extent of the cuts. “We are still negotiating with mining companies whether to reduce power by 7 or 10%,” she told journalists.

Magubane was speaking at an integrated resource plan (IRP) 2010 power conference, which is intended to produce a proposed plan on power generation comprising mainly nuclear and gas, coal, solar and coal-fired plants.

“By the end of the year, a mechanism must be in place, and all incentives and penalties must be worked out, she later told Reuters.

Reuters reports that Eskom is confident it will be able to meet this year’s power demand, including during the World Cup period, but that supply will be tight from 2011 to 2012 unless new capacity is brought on stream.

The power utility, which plans to launch new power stations, has said its Medupi and Kusile coal-fired power plants will provide a buffer once their first units come on stream in 2012 and 2014 respectively. The plants will each generate 4 800 Megawatts.

Magubane said plans would also include company investments in clean and renewable energy projects.

Acting deputy director for electricity, nuclear and clean energy Ompi Aphane said at a news briefing that the cabinet was expected to look at a new IRP document by August or September to decide on a plan, after industry and other players had agreed on new power generation measures to raise capacity.

Magubane said concerted efforts would be required to ensure that power reserve margins “’ which had fallen to about 16% from as high as 30% in the in the early 1990s “’ increased again.

“It is common knowledge that we are now entering into an intensive capital investment programme, in terms of which approximately 40 000 megawatts could be required over the next 20 years, and also taking into consideration that some of our power plants are going to be reaching the end of their term,” she added.