Johannesburg, South Africa — ESI-AFRICA.COM — 20 February 2012 – Increasing co-operation between South African national power utility Eskom Holdings and the country’s big smelter operators is helping to ease the burden on the over-taxed national power grid.

In the latest development, ferrochrome producer Merafe Resources, with its joint venture partner Xstrata, has agreed to close down five smelters in a move that could cause production losses.

A significant number of the 27 Eskom power stations are in mid-life, creating a delicate balancing act for the state-owned entity between carrying out maintenance and keeping up with energy demand.

Eskom spokeswoman Hilary Joffe said the arrangement with Xstrata was unique, but the utility also had agreements with some of its large mining and industrial customers to reduce demand over constrained periods.

“We have at least 400MW covered by such arrangements and we are working to sign up more,” she said. “They are generally power buyback arrangements, in which customers are paid to reduce or shift load.”

“But we have also on occasion had voluntary assistance from certain of our large customers. We appreciate the help; we have said we can’t keep the lights on, on our own, and we would like all our customers, large and small, to partner with us,” Joffe added.

Barry Bredenkamp, operations manager at the South African National Energy Development Institute, said the lead times for building new power-generation capacity were extremely long, and the only immediate solution was to encourage consumers to become more energy efficient and to reduce overall consumption.

"Not only will this free up much-needed capacity on the national grid, it will also provide some relief to consumers who are reeling under the impact of the recent high electricity tariff increases," Bredenkamp said.