Erwin at Medupi Power Station sod turning ceremony, Lephalale
14 August 2007
Thank you for the opportunity to speak at this event, which is, in my view,
one of the defining moments in Eskom's history.
Today's sod turning ceremony, for the country's first new greenfield
coal-fired power station in 20 years, signifies that the Build Programme is
indeed going full steam ahead.
We need to ensure that we move quickly towards better security of
electricity supply for South Africa, and this power station which will be built
here contributes to our vision of ensuring that we secure long-term,
environmentally sustainable electricity for the country.
Because of the needs of a growing economy, the country's power stations have
taken some strain in recent years, and thus the need to build new ones, and to
identify other methods of generating electricity, in order to reduce this
burden on the existing infrastructure.
Reliable supply of electricity is important for any growing economy, which
requires large quantities of energy to sustain increasing consumer demand.
Recently we have seen unprecedented growth rates across the globe, in countries
such as China and India, as well as on the African continent, with the Angolan
economy growing at double-digits last year.
The South African economy has also been growing at a robust rate in recent
years, with even higher growth levels expected in coming quarters. In order for
this economic growth to be sustained, and propelled to even higher levels, the
State must create sufficient capacity to meet increasing energy demand
levels.
William Arthur Wood once said: "The pessimist complains about the wind; the
optimist expects it to change; the realist adjusts the sails." This current
economic growth may have caught us on the back foot initially, but we have
adjusted our sails, and are on course to achieving our objectives regarding the
South African economy.
State-owned enterprises, and in particular Transnet and Eskom, are embarking
on the biggest investment programmes this country has seen in over three
decades. Lack of adequate investment in infrastructure over the years has
become an obstacle to the goals of economic growth and development that we
would like to achieve. Over the next five years these two enterprises will
invest in infrastructure to the tune of over R200 billion.
The decision to invest in this infrastructure was borne not only out of
necessity, following increased power outages as capacity became strained, but
also out of the realisation that South Africa is playing in an increasingly
globalised world, and is competing with some of the best countries in the world
to attract investment opportunities. Infrastructure that is world-class and
efficient is also a key if local companies are to have a fair chance at
competing with other world-class companies in the global economy.
Our decisions must also be responsible, and we need to take note of what
impact the infrastructure programme will have on the environment. We welcome
the Department of Environmental Affairs and Tourism's decision to approve the
project from an environmental perspective. Our respect for the environment must
also extend to the methods we use to generate electricity, and we will continue
to explore more environmentally-friendly ways of producing energy.
Diversifying our energy mix to include, among others, the use of nuclear
will also ensure that we secure supply for the future. Conditions remain tight,
and Eskom's reserve margin, which has declined from 25% in 2001, to between
eight percent and 10% currently, remains a source of concern. However, measures
are being taken to address this issue, and it is imperative that this power
station is built, and that we continue to identify and explore other methods of
increasing capacity.
Eskom's approved R150 billion capital expenditure programme, along with the
participation of Independent Power Producers (IPPs), will meet 70% and 30% of
the country's capacity needs respectively.
Through the Medupi project, Eskom has also managed to sign two if its
largest contracts in its 83 year history, for the boiler and turbine, which
will contribute to job creation, and supporting supplier industries which have
been neglected over the past 30 years. Both Eskom and Transnet are in the
process of developing their Supplier Development Plans, as part of the
Competitive Supplier Development Programme (CSDP). Because South Africa's
investment programme is fairly small on a global scale, there is a need to
develop the local supply base and improve local suppliers' competitiveness. The
SDPs will be ready early next year.
Our key objectives regarding Eskom over the next five years are on track,
and we are pleased with the progress made thus far with the implementation of
the Build Programme. My Department will continue to monitor the implementation
and impact of the infrastructure programme roll-out.
Commitment of the leadership in both government and Eskom will ensure that
the decisions that we make today will have a positive impact on generations to
come. With a planned operational life of about 50 years, the Medupi Power
Station will outlive most of us here today.
Power stations like the one to be built here, the Underground Coal
Gasification Plant in Majuba, as well as the Open Cycle Gas Turbines in the
Western Cape, as well as other plants that Eskom is investing in are intended
to ensure that power outages become a thing of the past.
I therefore urge all of us here to, not only save electricity, but to be
bolder and more visionary in our thinking and our objective for the South
African economy. Only if we remain focused on our ultimate goal, that of
creating more jobs and creating a more vibrant economy with equal opportunities
for all, will we be fearless enough in our decision-making and actions.
I look forward to 2011 when the Medupi power station will begin delivering
its first power. All the best to the team involved.
Thank you.
Enquiries:
Vimla Maistry
Chief Director: Communications
Tel: 012 431 1021
Issued by: Department of Public Enterprises
14 August 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za)
