Cape Town – The country is currently saving more than the 10 percent reduction target in electricity consumption set by government, Minister of Public Enterprises Alec Erwin said Monday.

For this, the minister extended his thanks to all electricity users, particularly the larger industrial users who draw the bulk of the supply from Eskom, the state-owned power utility.

Mr Erwin was speaking to reporters at a media briefing on the programme of action of government's economic, investment and employment cluster.

He said that the country had seen significant reductions in electricity demand over the past week and that programmes to reduce demand would continue.

Minerals and Energy Minister Buyelwa Sonjica, whose department is leading demand-side management programmes, echoed Mr Erwin when she said that interventions made under the National Electricity Management Plan were “already paying dividends”.

Mr Erwin added that emergency measures to reduce demand in electricity would continue for the next six months, to achieve the short-term reduction targets of between 3 000 megawatts and 4 000 megawatts (MW).

In the longer term, the minister said South Africa would be sitting with a “tight” energy supply situation for the next four years, given the lead time involved in the construction of new power stations.

However, all contractual obligations made with investors would be honoured, Mr Erwin said, but he added that there would need to be greater planning and coordination when it comes to new investments, especially around when new projects would require connections to the national grid.

Mr Erwin added, however, that it would be “some time” before South Africa gave the go-ahead to new energy-intensive investments such as the aluminium smelter currently planned for the Coega area.

The minister pointed out that South Africa was not alone in dealing with a tight energy supply, saying that almost all developing countries – and some industrialised nations – were also facing similar supply constraints.

“No one is sitting with an abundance of energy right at the moment,” the minister said.

The intention at the moment is to widen the country's reserve margin – the difference between potential capacity and that in use at any given time - which currently stands at eight per cent, Mr Erwin said.

More intensive demand-management programmes could push that margin to 10 per cent, the minister said.

Over the longer term demand-side efforts and supply-side interventions with a shorter lead time – such as the building of gas-fired turbines – would push the margin up to the 15 per cent standard.

The National Energy Regulator of South Africa, said Mr Erwin, wants to see a reserve margin of 16 per cent, while the country was on track to seeing a “better” reserve margin of between 12 per cent and 15 per cent by 2010.

The appointment of a team of energy champions, as announced by President Thabo Mbeki in his State-of-the-Nation address on Friday, would play a key role in explaining to potential international investors the actual situation of the country regarding its energy supply, Mr Erwin added.

This team of individuals, who would be “prominent and knowledgeable” South Africans, said President Mbeki, would assist with energy efficiency campaigns.

Mr Erwin said he expected that the team would also speak to potential investors in the major industrial capitals and deal with concerns around energy availability.

In the meantime, South Africa aims to double its overall capacity in the next 20 years by adding another 40 000MW to the system, said the minister.

Half of this additional capacity, he said, would be sourced from nuclear power, using both conventional nuclear power stations and Pebble Bed Modular Reactor technology.

However, it would be unlikely that the country would see a conventional power station coming on stream before 2015, while a smaller PBMR plant could be ready by as early as 2013, said Mr Erwin.

Ms Sonjica added that alternative, renewable, energy sources were currently being explored more vigorously than before, including wind power.

Mr Erwin pointed out a 100 MW wind-power station was under construction in the Cape, and that the performance of this plant would be closely evaluated to assess the potential contribution of this source of energy going forward. - BuaNews