Coal news and updates

Persistent power cuts by state-owned Eskom has disillusioned investors who have for long seen South Africa as best business destination in Africa, the country’s trade minister Rob Davies told Bloomberg.

“Investors have recognized that there is an energy challenge,” Davies said in an interview on Tuesday in Davos, Switzerland before the start of the World Economic Forum. “That is something that they need to factor in to their factors of risk and reward.”

South Africa’s business competitiveness came under pressure in the third quarter of 2014 as the country’s state owned electricity company Eskom announced that it will initiate a rolling blackout program dubbed ‘load shedding’

The country, which was toppled from the top position by Nigeria last April as Africa’s largest economy, is renovating its ageing power plants, but experts say, citizens and businesses should brace to blackouts for a couple of years to come until Eskom bring new plants to the grid.

An AFP report last week said that the beleaguered state power utility Eskom, which generates around 95 percent of the country’s electricity, was unable to meet local demand for electricity due to overreliance on old coal stations.

South Africa’s economy suffered immensely as companies lost billions of rands on the fourth quarter of the last year, pushing its annual economic growth forecasts to down 1.4 percent.

Davies told Bloomberg that the government was seeking short-term measures to help ease the power shortages and is reviewing Eskom’s maintenance plan to ensure there’s no unplanned outages.

Eskom is also facing a financial crisis due to the use of expensive diesel power generators to provide electricity. The company recently asked for 50 billion rands ($4.3 billion) handout from the government to enable it meet the country’s demand through mid-February.

New power generation capacity has been delayed as construction of two new coal-fired power plants lags about two years behind schedule. Eskom is struggling to fill a 225 billion-rand ($19 billion) cash-flow gap to help boost electricity supply.

The South African government is even considering inviting private investors to help in sealing the demand gap by creating more independent power station and generators. This is at the risk of awakening the wrath of the powerful labour unions.

 

 

 

Source: http://afkinsider.com/