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Eskom concerned about coal supply beyond 2018

Eskom – concern over
coal supplies after 2018
Johannesburg, South Africa — ESI-AFRICA.COM — 01 February 2012 – South African national power utility Eskom Holdings has registered concern about the security of coal supply beyond 2018, saying its suppliers are more interested in the higher paying Asian export markets.

Spokeswoman Hilary Joffe said that although current coal stockpiles were healthy at just over 40 days’ supply, new supplies after 2018 were not secured. “We are concerned about the security of supply beyond 2018. Investments should already be happening to provide mining capacity for coal we are going to need in the long term because our stations’ lives are 40 to 50 years,” she added.

According to Eskom, about 77% of the country’s primary energy is provided by coal. Of that, 53% is used for electricity generation. Fifteen of the utility’s 27 existing and incomplete power stations are coal-fired.

The National Planning Commission (NPC) said last year that the national power supply could be threatened as local coal producers preferred to sell their coal to big paying Asian customers, rather than to Eskom. It called for restrictions on exports in its National Development Plan.

The plan “’ published in November last year and envisioned for 2030 “’ suggested that a balance be drawn between exports and local supply security by the government and coal leaders. The NPC said it might be necessary to institute export restrictions for particular grades of coal as a temporary measure.

Xstrata, one of the world’s largest coal mining companies with operations in South Africa, confirmed that although it had long-term contracts with Eskom, its customers were largely in Europe, India and Asia.

The company’s 2011 interim results showed that of the 6.5Mt of thermal coal it mined in South Africa in the first six months of the year, 3.9Mt were exported and 2.6Mt were earmarked for domestic use.

Joffe said it had always been Eskom’s position that South Africa needed to strike the right balance between coal exports and coal for domestic security of supply.

In its latest system update yesterday, Eskom said that due to technical glitches it could no longer defer maintenance plans despite the system being overstretched. Hence it barely had enough power to keep the lights on.

At one point this month Eskom had a gap of only 450 megawatts (MW) between demand and supply, which was less than one unit of one power station. Eskom said that unplanned outages had been running at higher levels due to boiler tube leaks, poor coal quality at some stations and excessive heat impairing performance at dry-cooled stations.

Joffe said that Eskom tried to keep at least 2,000MW in reserve.

At the beginning of the month, Eskom said 13% of its capacity was allocated for scheduled maintenance, but with increasing power demand, this had fluctuated.

“At times we’ve had to delay because we can’t spare that available capacity. But this year we’ve certainly been doing more maintenance because we had said that we were going to make it a priority,” she said.

The number of units requiring maintenance has since been reduced to 25 units from the 36 forecast in May 2011.