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Eskom to close four power stations

‘Only option to accommodate renewables’.

Eskom spokesperson Khulu Phasiwe on Tuesday confirmed that the power utility will expedite plans to close four power stations in order to accommodate renewable independent power producers (IPPs).

The stations are the 3 000MW Kriel, 1 000 MW Komati, 2 000 MW Hendrina and the 1 600 MW Camden power station, all in Mpumalanga.

Phasiwe says two of Komati’s six units have in fact already been closed down and its other units as well as the other three stations will be closed down gradually as renewable IPPs connect to the grid.

Phasiwe says the decision to close down the power stations was taken by Eskom management last year and the idea was to first communicate it to stakeholders before making a public announcement. Eskom’s plan was however overtaken by events last week when coal truck drivers publicly protested the phasing out of Eskom’s coal transport contracts in accordance with the closure of the power stations.

Some of the power station units were earlier kept on “idle mode” and only ramped up if supply from renewable IPPs dipped. That however resulted in a reduction in revenue from the stations, while overheads remain unchanged.

Eskom’s efforts to renegotiate the IPP contracts were overruled by government and the utility has no choice but to close down the stations as economic growth and electricity demand remains flat, Phasiwe said.

Phasiwe said Eskom will in due course announce more detailed timelines for the power station closures. At the moment there are “a lot of moving variables,” he said.

He did disclose that Hendrina will be closed by December next year, when the controversial coal supply contract with Gupta-owned company Tegeta comes to an end.

Eskom has started issuing budget quotes to renewable IPPs and will connect the projects to the grid at the tariffs agreed with the department of energy, he said.

Trade union federation has called Eskom arrogant for “unilaterally” deciding to close the power stations. Cosatu said it will meet Eskom and government on the issue and mobilise workers to oppose the move.

“If we have surplus electricity then we must cancel nuclear, reduce prices, export more to Africa and invest in building electric cars,” Cosatu said in a statement.

“We agree with the Num that SA’s climate change obligations to introduce renewable energy into the electricity grid should not result in backdoor privatisation and further commercialisation of Eskom.”

Cosatu demanded that Eskom and government suspend their plan to shut down down the power stations “until a just transition-solution is arrived at by all affected stakeholders”.

Written by Antoinette Slabbert. Published 8 March 2017 in Moneyweb

This month's top international coal headlines

  • Coal can be more profitable and efficient going forward, expert says — CNBC
  • India favours South African coal — Platts CTI
  • South Africa price surge — Platts CTI

2017 archive

March 2017
  • S African Feb thermal coal exports rise 36.2% on-year to 6.57Mt — Platts CTI
  • Steady flow of South African coal into India — Platts CTI
  • Coal Power Has Taken a Tumble, But Is It the Beginning of the End?
    — MIT Technology Review
  • Indian buyers look to cheaper S African cargoes — Platts CTI
  • Slowed buying of South African coal — Platts CTI
  • Some Miners Are Going Back to Work in Coal Country — FOX News
  • Japan’s renewed commitment to coal — World Coal Magazine
  • Xinjiang to close 117 small coal mines in 2017 — China Daily
  • Coal drags but mining production still on the up — Fin24
  • Indonesia’s Electricity Demand and the Coal Sector: Export or meet domestic demand? — The Oxford Institute for Energy Studies
  • S African unions plan strikes against Eskom coal plant closures — Platts CTI
  • Exxaro unlikely to exercise pre-emptive right over RBCT stake — Miningmx
  • Indian interest for South African coal — Platts CTI
  • Eskom stalling renewable energy agreements costs billions — Business Live
  • Trump is poised to issue a sweeping order dismantling Obama’s climate plan this week — The Washington Post
  • Eskom initiates talks on triggering government support to cover IPP costs
    — Engineering News
  • Mid CV S African coal may displace Indonesian coal into India — Platts CTI
  • Ongoing buying interest for South African 4,800 NAR — Platts CTI
  • Is the Middle East the new home for coal? — Energy Analyst
  • Coal-boosted Exxaro’s earnings soar — Mining Weekly
  • S African coal garners more interest in India — Platts CTI
  • Normal railings resume on S Africa's coal export line — Platts CTI
  • Tightness for South African coal — Platts CTI
  • SA Mining is on its knees – can it be saved?
  • Derailment partially disrupts line to S Africa’s RBCT — Platts CTI
February 2017
  • Steep discounts increase interest for off-spec South African coal — Platts CTI
  • S African Jan exports fall to 6-month low — Platts CTI
  • S African Jan exports fall 8.8% on-year to 6-month low of 5.62Mt — Platts CTI
  • Indian buyers interested in 4,800 NAR S African coal over 5,500 NAR
    — Platts CTI
  • S African coal miners look to domestic market for higher prices — Platts CTI
  • South African coal at slight premium to Newcastle — Platts CTI
  • Eyes on South African supply — Platts CTI
  • Coal Will Be One of the Cleanest Uses of Technology That We Have, Says Sean Spicer — The Independent
  • White House Press Secretary: We’re Going to Bring Back Coal in an ‘Environmentally Friendly’ Way — Greentech Media
  • Australian versus South African coal — Platts CTI
  • High South African prices deter buyers — Platts CTI
January 2017
  • S Africa’s Universal Coal concludes export agreement — Platts CTI
  • Richards Bay coal struggles to find market on high price — Platts CTI
  • Platts to launch netback FOB Richards Bay 6,000 NAR calculated quote
    — Platts CTI
  • South African demand dwindles — Platts CTI
  • Colombian thermal coal exports rise 9% in 2016 to record 88Mt — Platts
  • Some interest for Mozambique coal — Platts CTI
  • Richards Bay 6,000 NAR netback calculation proposed — Platts CTI
  • Coal production declines in 2016, with average coal prices below their 2015 level — U.S Energy Information Administration
  • South African Nov thermal coal exports up 6.5% on-year to 23-month high
    — Platts CTI
  • Richards Bay FOB spot loses almost $2, trades for third straight day
    — Platts CTI
  • South African material sees interest — Platts CTI
  • South African FOB spot loses $3 on lower offers — Platts CTI

2016 archive

 

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