A Erwin on electricity problem in Western Cape

Minister Alec Erwin on the current electricity problem in the
Western Cape

28 February 2006

Regrettably a further serious trip in the transmission line has resulted in
the Koeberg power station shutting down. The cause is the tripping of the
Dreorivier Bacchus high voltage transmission line. This incident is being fully
investigated and urgent repairs being undertaken.

The procedures to restart Koeberg take time and have to be strictly
followed. Under no circumstances whatsoever can safety be compromised as we
restart the power station.

It is regrettable that the initial incident at Koeberg, which has placed the
Cape system under such strain, is presently under police investigation. Such
events cannot be predicted. It is regrettable that such an important part of
our economic system has fallen prey to all sorts of political populism on the
part of opposition parties. No amount of political bluster can now change the
steps we have to take and we need all parties, the province, city and business
communities, to work together to manage the situation.

Every possible step is being taken to manage the situation effectively. We
are in the process of concluding negotiations with EDF in France to expedite
the delivery of spares and undertaking detailed planning on the management of
Koeberg. We will make further announcements on this matter when all available
information has been collated. The purpose of this announcement will be to
allow all components of the economy to plan and cooperate to manage the
situation. The negotiations with EDF are very positive.

By the end of March we will make a further detailed announcement of the
plans to take us through the winter period. With full cooperation and careful
management of the process we should be able to deal with the situation.

It is in no one’s interest to provide incorrect information on the situation
or to make false promises as to what can be achieved. Pressure on energy
systems is a reality at present and we have the resources to change this. We
are doing this but with the care and professionalism needed.

Additional information on the Western Cape Power Outage

The power outages currently being experienced in the Western Cape are not
due to capacity shortages but rather result in part from a series of events
that are triggered by the absence of the second generator at Koeberg. There is
sufficient capacity in the system, as evidenced, by the fact that the reserve
margin remains at just above 10%.

The total installed capacity in South Africa is 37500 MW including imports.
The registered winter maximum demand in 2005 was 33500 MW nationally. The
reserve margin in 2005 was in the region of 10%. The national projected maximum
demand for winter 2006 is in the region of 35100 MW. The reserve margin will
therefore decline to approximately 6.5%.

A fundamental problem with our system is that most of our power stations are
located in Mpumalanga, in close proximity to the coal deposits. In three
regions, KwaZulu-Natal, Eastern Cape and the Western Cape, demand exceeds
locally generated capacity, and thus additional energy must be wheeled in from
Mpumalanga. It is in this situation that the risk to the system arises, as any
faults that occur in the transmission system must by implication lead to a
shortage in that particular region. We will have to strengthen the transmission
system, but this is only part of the solution as there are inevitable energy
losses in the transmission system. A more lasting solution is the construction
of new capacity in the affected regions.

The projected Western Cape winter maximum demand is approximately 5650 MW in
2006. Installed generating capacity is in the order of 3100 MW, with another
3500 MW available to the Western Cape system through the national transmission
system. Therefore, when Koeberg is fully operational the Western Cape has
almost 1000 MW of excess capacity available. When one unit of Koeberg is down,
the supply situation becomes very tight.

Measures currently being taken to rectify the situation include Open Cycle
Gas Turbines (OCGTs) in the Western Cape Atlantis and Mossel Bay, to be built
by Eskom and commissioned by 2007. These will add 1050 MW to the Western Cape
system.

A lasting solution to the problem which builds robustness into the energy
system will be the construction of base load power stations in the affected
regions. Clearly as there are no coal deposits in these growth points, other
energy sources have to be investigated, such as gas and nuclear. Plans for a
new base load station in the Western Cape are being fast tracked.

Eskom Bill installed capacity plan (See http://www.dpe.gov.za for table)

Enquiries:
Ms Gaynor Kast
Ministerial Spokesperson
Cell: 083 271 4350

Issued by: Department of Public Enterprises
28 February 2006
Source: Department of Public Enterprises (http://www.dpe.gov.za)

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