Power users seek new sources
Big business has borne the brunt of the unprecedented electricity emergency, leading to substantial losses in production and the risk of job losses. The shortage of electricity capacity has put the spotlight on the role of independent power producers.
Speaking after the release of Ipsa’s results for the year to September yesterday, CEO Peter Earl said the company was negotiating power purchase agreements with big consumers.
“Companies are realising that it is going to take a while before Eskom brings in new capacity.
“They are now considering smaller increases. Small is fast,” Earl said.
While the projects mooted were smaller than Eskom’s, they would have a capacity of at least 100MW, so the companies were big consumers.
He declined to name the companies, saying only that they were mainly in the mining and metals processing industries.
Ipsa, listed on the JSE’s AltX and London’s Alternative Market, also announced plans to increase capacity at its gas-fired Newcastle plant from 18MW to 26MW.
Earl said additional capacity was expected to come into service in the middle of the year, “and will provide a solution for increasing power in the shortest possible space of time”.
Earl said the company was on track to produce 500MW in the Coega industrial development zone, near Port Elizabeth, by the middle of next year.
“It is crucial for us to meet that target because Coega Development Corporation must assure Alcan of uninterrupted power supply,” he said. The company would install another 500MW by the end of next year.
On January 24, the company signed a memorandum of understanding with the government-owned Central Energy Fund for the combined cycle gas turbine project at Coega.
Ipsa reported a full-year operating loss of £942000, sharply up on the previous year’s £364000 operating loss.
Earl said the company expected to suffer losses because of investments in the Newcastle Co-generation Power Plant, SA’s first gas-fired independent power project.
“It was a pilot project that we knew would be a trailblazer.
“We also knew that we were taking a risk, and there were costs associated with that. But someone had to do it,” he said.
Ipsa shares were at R14, up 7,69%, at close of trade on the JSE yesterday.
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