SA cancels power suppy deal

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boramk

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Johannesburg - The Minerals and Energy Department has terminated a R5bn contract with a consortium led by the US power producer AES to build two open cycle turbine gas stations, the Business Day reported on Thursday.

The contract for the peaking plants was the first awarded to an independent power producer and was announced with much fanfare by Minerals and Energy Minister Buyelwa Sonjica last August.

It was hailed as a boost to the establishment of independent producers in SA. However, it has emerged that AES Corporation, with revenue last year of US$11.6bn and one of the larger power companies in the US, could not meet its obligations, and the department had pulled the plug on the contract.

The company was to have posted a bid bond of R20m by the end of March to secure the contract, but failed to do so.

AES spokesperson Robin Pence said the company had been content for the contract to lapse because the project was no longer viable.

A chief director in the department, Omphi Aphane, confirmed that the deal was off because the consortium "could not meet its commitments".

He declined to give further information on the commercial details, saying these were confidential.

The department would seek an alternative operator, Aphane said, but due process had to be followed and delays were likely.
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Lets just keep SA in the dark
 
This seems like the US company could no longer make what they thought is a good ROI and just let it lapse.

Maybe they would also be subject to NERSA regulation on pricing, thats the only reason I can think of why they would not make the profit they wanted. Its not like there is no demand for electricity. :)
 
One can but wonder about this.

But I think it's a good thing as fuel's getting pretty expensive now, and to have two more diesel-guzzling plants won't be a good idea anyway...
 
So what is PLAN B?

There is a PLAN B right?!?!
I mean, not as if PLAN A ever worked but hopefully, Eskom being as stupid as they are surely had a PLAN B in place...

Maybe? Hopefully? Possibly?
 
sox63 said:
This seems like the US company could no longer make what they thought is a good ROI and just let it lapse.

Maybe they would also be subject to NERSA regulation on pricing, thats the only reason I can think of why they would not make the profit they wanted. Its not like there is no demand for electricity. :)
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I've been in the power industry for many years now, and a friend in AES told me that they were very happy to get out of this deal - he didn't give much detail but mentioned high risk. They are going ahead with a project in Moz.
 
What ever happened to all that pebble-bed reactor talk all those years ago? Are they not going to use those to produce power anymore?
 
mercurial said:
What ever happened to all that pebble-bed reactor talk all those years ago? Are they not going to use those to produce power anymore?
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Eskom Spokesman: The pebbles got too wet. There was not enough pebbles. The pebble supplier sold all the pebbles to China. Contracts were not re-signed with the pebble suppliers. Somebody threw a bolt into the pebbles. The BEE truck carrying the pebbles hit a pothole. The BEE pebble trasnsport company went bust. The money for the pebbles was spent on bonuses. The pebbles weren't of good quality. The pebbles were taken out of service for maintenance. Pebble maintenance hasn't been done for 14 years. The pebbles were overloaded. Pebble experts have left the country. There are plenty of pebbles but not enough beds to put them in. Unforseen demand outstripped pebble supply. The pebble-using public is stupid. The pebbles got too dry. Now, what don't you understand?
 
All jokes aside, they PBMR is still on the go, they're building the prototype reactor atm iirc.
 
Sebs said:
Eskom Spokesman: The pebbles got too wet. There was not enough pebbles. The pebble supplier sold all the pebbles to China. Contracts were not re-signed with the pebble suppliers. Somebody threw a bolt into the pebbles. The BEE truck carrying the pebbles hit a pothole. The BEE pebble trasnsport company went bust. The money for the pebbles was spent on bonuses. The pebbles weren't of good quality. The pebbles were taken out of service for maintenance. Pebble maintenance hasn't been done for 14 years. The pebbles were overloaded. Pebble experts have left the country. There are plenty of pebbles but not enough beds to put them in. Unforseen demand outstripped pebble supply. The pebble-using public is stupid. The pebbles got too dry. Now, what don't you understand?
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:D
 
Sebs said:
Eskom Spokesman: The pebbles got too wet. There was not enough pebbles. The pebble supplier sold all the pebbles to China. Contracts were not re-signed with the pebble suppliers. Somebody threw a bolt into the pebbles. The BEE truck carrying the pebbles hit a pothole. The BEE pebble trasnsport company went bust. The money for the pebbles was spent on bonuses. The pebbles weren't of good quality. The pebbles were taken out of service for maintenance. Pebble maintenance hasn't been done for 14 years. The pebbles were overloaded. Pebble experts have left the country. There are plenty of pebbles but not enough beds to put them in. Unforseen demand outstripped pebble supply. The pebble-using public is stupid. The pebbles got too dry. Now, what don't you understand?
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The pebbles!:D
 
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