How much power Eskom needs to stop load shedding

[Kevin Lancaster]

How much power Eskom needs to stop load shedding

Eskom acting chief executive Brian Molefe told MPs on Wednesday Eskom would be “breaking away” to do a “detailed strategic plan” as soon as possible.

 

[goselito]

if the entitlement of the anc can be harnessed, there should be enough power to light the whole of Africa

 

[jetlee]

How much power Eskom needs to stop load shedding

Eskom acting chief executive Brian Molefe told MPs on Wednesday Eskom would be “breaking away” to do a “detailed strategic plan” as soon as possible.

I thought thats what the war room has been tirelessy busy with for the last 2 - 3 months ??

 

[furpile]

Every single time the response is "we need to make a plan". It's been 6 years now, surely something would have come up by now? Rather hand over Eskom to a reputable international energy company (or companies) and watch the problems disappear...

 

[bekdik]

Cut off Billiton and renegotiate a new contract. If they want to go to court, wind up eskom and sell assets to a new company which can then negotiate a proper contract.

 

[Seriously]

Every single time the response is "we need to make a plan". It's been 20+ years now, surely something would have come up by now? Rather hand over Eskom to a reputable international energy company (or companies) and watch the problems disappear...

They never did and cannot plan anything for the future apart from topping up their Swiss bank accounts before early retirement!

 

[.QQ.]

1.) Cut off Soweto who are a few billion in arrears
2.) ???
3.) Problem solved

 

[M@gn3t1c]

He did say that we should all switch to prepaid. Then Eskom get the funds directly and not via a non-paying municipality.

 

[TheMightyQuinn]

He did say that we should all switch to prepaid. Then Eskom get the funds directly and not via a non-paying municipality.

I.e. 10 year tenderpreneur roll-out while we sit in darkness.......

 

[chrisc]

Cut off Billiton and renegotiate a new contract. If they want to go to court, wind up eskom and sell assets to a new company which can then negotiate a proper contract.

That would ruin the credibility of the country once and for all. Very short-sighted thinking!

 

[ellyally]

That would ruin the credibility of the country once and for all. Very short-sighted thinking!

Not doing so means no economy which means no country. At least by cutting off smelters etc, business will go on and we will be able to grow a little. Keeping them on means more and more job losses, small businesses will continue to close. We have no credibility anymore, not going to lose anything.

 

[Chris.Geerdts]

I thought thats what the war room has been tirelessy busy with for the last 2 - 3 months ??

It's not real planning if there is no time out of the office for an exclusive bunch of execs, hand-picked middle managers (hopefully including the one's who actually know what's going on) and facilitation by top-dollar consultants, at an expensive bushveld lodge, interspersed with game drives, river cruises and the bashing of bongo drums

 

[f2wohf]

Cut off Billiton and renegotiate a new contract. If they want to go to court, wind up eskom and sell assets to a new company which can then negotiate a proper contract.

Winding up to create a new company would be fraud...

 

[bwana]

“Somehow we need to find the 3 000 MW by the end of the year.”

How do you misplace 3000MW in the first place?

 

[f2wohf]

Not doing so means no economy which means no country. At least by cutting off smelters etc, business will go on and we will be able to grow a little. Keeping them on means more and more job losses, small businesses will continue to close. We have no credibility anymore, not going to lose anything.

By cutting off smelters, you impact the whole SA industry which will need to import more expensive steel and other metals instead of purchasing locally produced one.

Good solution to go back 80 years ago before the industrialisation took place and take the same direction than Zimbabwe. You'll have electricity but no industry, no jobs and no money !

 

[Cray]

By cutting off smelters, you impact the whole SA industry which will need to import more expensive steel and other metals instead of purchasing locally produced one.

Good solution to go back 80 years ago before the industrialisation took place and take the same direction than Zimbabwe. You'll have electricity but no industry, no jobs and no money !

Billiton is a foreign owned global company, SA does not get cheaper Aluminium just because those smelters are located here - Commodities are priced globally. However if we cut them off it would deter any kind of future foreign investment.

 

[f2wohf]

Billiton is a foreign owned global company, SA does not get cheaper Aluminium just because those smelters are located here - Commodities are priced globally. However if we cut them off it would deter any kind of future foreign investment.

How does it make any difference if the country is foreign owned or not ? The contracts are signed with South African companies which are subsidiaries of Billiton. Almost all SA major companies are foreign owned, they still pay taxes and employ most of the workforce (Absa is 56% foreign-owned whilst Standard Bank is at least 40% foreign owned, Sasol is about 30% foreign-owned and Arcelor-Mittal is 65% foreign owned. Massmart is 60% foreign-owned, Shoprite is 35%, Truworths is 50%, Foschini is 40%, JD Group is 40%, Lewis is 30%, Pick n Pay has less than 10%, Spar under 20% and Mr Price and Woolworths 20% http://www.moneyweb.co.za/archive/over-80-of-jse-white-capitalistowned-cosatu/ )


Industrial buyers (such as the car industry which is a massive employer in SA) have long term contracts which are negotiated under the prices of the international markets because the buyer commits to certain quantities over a certain period.

Importing it would incur:
- Massive transportation costs (aluminium and metals in general are extremely expensive to transport which is why the big consumers are located close to the smelters http://www.talco.com.tj/en/world-aluminum-industry/production-cost)
- Import duties
- Logistics and supply chain unreliable

Which makes that most likely the industrial buyers will not invest more in SA and will get out of SA after their plants lifespans.

 

[Cray]

How does it make any difference if the country is foreign owned or not ? The contracts are signed with South African companies which are subsidiaries of Billiton. Almost all SA major companies are foreign owned, they still pay taxes and employ most of the workforce.

Industrial buyers (such as the car industry which is a massive employer in SA) have long term contracts which are negotiated under the prices of the international markets because the buyer commits to certain quantities over a certain period.

Importing it would incur:
- Massive transportation costs (aluminium and metals in general are extremely expensive to transport which is why the big consumers are located close to the smelters http://www.talco.com.tj/en/world-aluminum-industry/production-cost)
- Import duties
- Logistics and supply chain unreliable

Which makes that most likely the industrial buyers will not invest more in SA and will get out of SA after their plants lifespans.

I agreed with you about the hit on investment and employment. I just feel that having those smelters in this country is not as big a benefit as you think. South Africa has no Bauxite mines at all, all that raw product has too be shipped in which then gets smelted into aluminium - this all comes from Australia -transport costs are already built in to the pricing. Don't you think it would be cheaper to have the smelters next to the mines and ship the finished ore? Do you also think that SA consumes the whole output of all those Aluminium smelters? How much benefit do we actually get out of having Aluminium smelted in this country (besides employment and investment)?

 

[ellyally]

I agreed with you about the hit on investment and employment. I just feel that having those smelters in this country is not as big a benefit as you think. South Africa has no Bauxite mines at all, all that raw product has too be shipped in which then gets smelted into aluminium - this all comes from Australia. Don't you think it would be cheaper to have the smelters next to the mines and ship the finished ore? Do you also think that SA consumes the whole output of all those Aluminium smelters? How much benefit do we actually get out of having Aluminium smelted in this country (besides employment and investment)?

BHP for example only employs 7k south africans. As you said everything is imported, and international prices are paid. To me, the fact they pay only 25%ish of cost for electricity, the 'benefits' are none existent. We talking 7k jobs vs millions and our economy. Cutting them and others frees up around 50% of current generation. No only that, but eskom will no longer be making a loss on the sales.

 

[f2wohf]

I agreed with you about the hit on investment and employment. I just feel that having those smelters in this country is not as big a benefit as you think. South Africa has no Bauxite mines at all, all that raw product has too be shipped in which then gets smelted into aluminium - this all comes from Australia -transport costs are already built in to the pricing. Don't you think it would be cheaper to have the smelters next to the mines and ship the finished ore? Do you also think that SA consumes the whole output of all those Aluminium smelters? How much benefit do we actually get out of having Aluminium smelted in this country (besides employment and investment)?

The raw product is actually way cheaper to ship than the finished product.

The impact is debatable though, some argue it's a boost to the country, some that it costs to the country. Apparently BHP supplies 70% of the country's consumption of aluminium.

http://www.miningweekly.com/article...-to-south-african-economy-disputed-2013-07-05

Anyway, should Eskom or the Government rescind the contract, I'm pretty sure BHP will be extremely happy about going to international arbitration and being awarded damages.

Shutting it down would anyway not solve Eskom's issues since Eskom is way more in the red than this:

However, Letlape emphasises the contribution BHP Billiton is making to the South African economy, adding that demand at BHP Billiton’s South African smelters – Hillside, which uses 1 140 MW, and Bayside, which uses 175 MW – together account for 3.2% of Eskom’s net installed capacity and 3.7% of its maximum demand.