HomeIndustry SectorsGenerationAnglo American says SA needs private power producers

Anglo American says SA needs private power producers

Anglo American “’
favours more private
power producers in SA
Johannesburg, South Africa — ESI-AFRICA.COM — 02 December 2010 – Anglo American says South Africa’s new proposed 20-year energy resource plan needs to make more allowance for private power producers to help in solving the dire power shortage in the country.

In a draft of its Integrated Resource Plan (IRP 2), the government has proposed that six new nuclear plants and renewable energy play a major role in plugging its power deficit as it seeks to halve its reliance on coal-fired plants. South Africa relies on coal for almost all of its electricity supply, some 95% of which is generated by state-owned power utility Eskom.

Now the government is keen to get private investors on board to help foot the bill for new power plants and reduce the strain on Eskom’s balance sheet.

Regional head of strategy at Anglo’s Thermal Coal unit Ian Hall said the plan needed to provide more clarity for industries wishing to invest in their own power plants.

“We should make more allowance for own-generation projects,” he added during public hearings on the draft of the Integrated Resource Plan.

Hall said the global miner was looking at a proposal for a 450 MW power plant using discard coal. The plant “’ estimated to cost US$1 billion (R7 billion) “’ would be built, owned and operated by an independent power producer. It would use Anglo’s discard coal and the miner would buy the power to use in its operations.

“The plant could start generating power in 2015-16,” Hall said. “It would be a significant addition to the supply capacity at no additional cost to Eskom or the National Treasury,” he added.

The energy plan estimates that some 52 248MW would need to be built on top of South Africa’s supply of around 40 000MW to meet fast-rising demand, and to avoid a repeat of the power crisis which shut down mines and other industry for days in 2008, and cost the country billions of dollars in lost output.

The estimates are based on annual gross domestic product growth of 4.6%