Lights will stay on, for now, says Eskom

[] — POWER utility Eskom on Wednesday denied currency market speculation of power outages.

South Africa’s national grid nearly collapsed in early 2008, forcing mines and smelters to shut for days and costing the country billions of dollars in lost output.

Eskom has said the system would be tight for the next few years until the first of its new power plants come on stream.

“Obviously the system is tight and it’s been cold, but there has been no load-shedding,” spokespersonHilary Joffe said.

“Load-shedding” refers to rolling blackouts designed to prevent grid overload.

Market participants said speculation about load-shedding was behind the rand’s over 1% fall against the dollar on Wednesday to its lowest levels in almost 10 weeks.

South Africa is about to enter its winter period, which runs from June-August, when demand for electricity is expected to peak due to usage of energy-intensive heaters and lighting.

Eskom has said electricity use had recently risen during peak times to levels higher than at the same time last year and the utility urged consumers to conserve power to prevent a system breakdown.

For every 1 degree Centigrade drop in winter temperatures, demand rises by 600-700 MW during peak time, Eskom said.

Eskom plans to invest up to R460bn in new power plants to plug the shortfall and meet fast-rising demand from industries and residential consumers, but analysts say this may not be enough or not soon enough.

The first unit of Eskom’s planned Medupi power station, the utility’s first new plant in more than two decades, is expected to come online towards the end of 2012.