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Eskom buys R10bn of diesel to keep lights on

Johannesburg - Eskom is currently spending more than R10bn on purchasing diesel in order to feed more power to the grid via generators, the Afrikaanse Handelsinstituut (AHi) said on Thursday.

This leaves Eskom with a cash flow crisis at present.

The business organisation met with Eskom about the current energy crisis in SA.

Eskom’s power supply will remain tight for the next two months.

"Contingency planning at Eskom remains in the red and on top of it many municipalities do not maintain their own distribution networks adequately," said AHi CEO Christo van der Rheede.

"Eskom is also struggling to maintain the required 2 000 megawatt reserve margin for emergency situations."

He said the few silver linings in a hovering dark cloud are the assurances from Eskom that businesses do not have to invest any further in their own generators.

"Hydro power generation at Ingula, big power plants such as Kusile and independent power producers will be up and running in due course and will feed power into the grid soon," said van der Rheede.

"Eskom has also given the assurance that they are better prepared to deal with any new crisis and that 2008 was a nightmare year."

Coal supplies

However, reserve supplies of coal currently stand at 45 days.  A comprehensive communication system was developed to curtail power usage by Eskom’s biggest electricity users and municipalities, should the need arise.

The AHi agreed to encourage its members to reduce power consumption by at least 10%.

It will also serve as a communication channel to inform affiliated businesses timeously of any load shedding.

"The AHi emphasised the importance of effective and timeous communication between Eskom and the business community," said Van der Rheede.

"This will allow business owners to prepare adequately for any eventuality and to manage it effectively."

More concerns

Eskom will respond in due course to a range of concerns that AHi members raised.

This relates, among others, to the feeding of excess power back into the grid by big factories and the benefits related to this practice.

Municipalities defaulting on payments to Eskom remain a challenge in provinces such as the Free State and Mpumalanga.

An agreement with National Treasury, however, allows Eskom to deduct any payments due to them by municipalities before it is paid into their accounts.

"Eskom has called on local business chambers to start playing an interactive role at municipal level to ensure that distribution networks are properly maintained and that effective and efficient billing systems are implemented," said Van der Rheede.

By Fin24