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Surplus capacity
 

The South African economy grows constantly, and as it grows, the demand for electricity increases. Every new factory, shop, office or home built needs electricity.

Eskom monitors this growth carefully and calculates how much capacity is needed to supply this growing demand and maintain its essential reserve capacity. This reserve, designed to cater for unexpected surges in demand, is internationally kept at about 15% of total demand. Eskom's reserve capacity has been reduced from this level to about 8%, which is insufficient for reliable supply.

It takes years to build power stations, so Eskom projects the demand into the future and takes decisions long before it runs out of capacity. In the 1990s calculations showed that new power stations would be needed by 2007 to meet the expected demand growth. Eskom identified sites for new power stations and pumped storage schemes, but was unable to implement these plans. The Energy White Paper of 1998 encouraged independent power producers (IPPs) to enter the generation market. Private sector investment was not forthcoming and in 2004, Government revised its policy and Eskom was given the green light to build new generation capacity.

Because of the low South African electricity prices and the slender returns they could earn, years passed without a single IPP entering the local electricity market. Meanwhile Eskom's fleet of power stations got closer to the end of their design life while the demand for electricity grew inexorably higher.

Eskom's search for ways to produce extra power without building new plant led to its refurbishment of its older mothballed power stations which, although small compared with newer stations, could at least make some contribution.

Another mechanism was demand side management, or DSM. This is a new mindset or power use philosophy in which people realise that they have been wasting power and adopt ways of improving efficiency and avoiding waste. A simple example is to use energy-saver lamps instead of the traditional incandescent light bulbs. Another is to persuade power users to reduce their consumption during the weekday morning and evening peak times or to move demand to off-peak periods. Eskom is implementing a strategy to accomplish a permanent saving on the demand side of 3 000 MW during peak hours by 2012.

National electricity demand is still growing at a brisk pace, however, and more interventions are needed. Eskom has been given the go-ahead for building new capacity, but building these huge plants takes years, so a concerted effort is needed in the interim to stretch the available supply to its maximum.