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Showing posts with label Eskom. Show all posts
Showing posts with label Eskom. Show all posts

21 March 2008

Eskom and the art of spin

Has anyone out there seen the movie, "Thank you for Smoking"? It gives quite an interesting and amusing slant on the way spin doctors are able to manipulate the truth. When I look at the electricity crisis in this country and the response of the Eskom executives to it, then I can only conclude that they have the art of spin perfected. They even have the President singing their tune.

Their pronouncements have been proved to be less than truthful on more than one occasion. The first one being the stuck record, which for many months said we did not have an energy crisis. Only when the country was plunged into darkness for the umpteenth time did they admit it.

The other tune is, “The days of cheap electricity are over for South Africans”. Whoever said our electricity was cheap in the first place.

What they are rally saying is that we must pay more get Eskom out of the situation, their gross incompetence and mismanagement of the electricity supply, has put us into.

What about the other tune - “South Africa has the cheapest electricity in the world; it is time our prices came in line with world prices”. Maybe that is not so surprising, since we have amongst the biggest coal reserves in the world, which are on the doorsteps of the big coal fired power stations.
This is the same sort of logic that would say that the people of Saudi Arabia pay too little for their petrol and should start paying the same price as motorists do in London.
..
The quality of this photo is not great, as it was shot with my cell phone,
but then it is symbolic of the quality of the service provided by Eskom
...
If the powers that be, believe our power is too cheap then why not charge our neighbours the same price they charge local users? Yes the neighbouring states pay less for Eskom’s electricity than we do – not a problem for Eskom they just make up the deficit from local consumers.

When Eskom took their “well conceived” decision to cut the power to the mines, they said it was because there was not enough electricity to go around. The real reason was that they supplied more power to our neighbours in January and therefore had to cut power to South African users.

The result of this act of stupidity was that the Rand took a tumble and never recovered – that has also had repercussions for the whole economy. There was a knock on effect on commodity prices that are linked to the dollar. This includes petrol, maize, wheat, coal, etc etc. And of course the inflation rate jumped ahead like a runner from the starting blocks.

On 17 February I wrote, “Given the fact that Eskom’s appeal to consumers to achieve a 10% reduction in power consumption, has been exceeded, it means that income wise they will be back to square one – do the maths. So where will the money for capital projects come from now? What will the next surprise be?”

Here we have it, Eskom is now calling for a 53% increase in the price of electricity – oh yes 53%. And it is supported by the government. This just reinforces my belief that those who are managing our electricity supply are grossly incompetent. How can you get your projections so wrong, that you go from a demand for an 18% increase to one of 53%?

They have said that one of the reasons is because the price of fuel and coal has risen, a factor to which Eskom’s poor performance has significantly contributed.

The reality is that consumers were asked to save 10% on their electricity consumption, which they did and are now to be penalized with higher prices.

What about the Eskom spokeman who made the claim on the radio last night that by increasing the price of electricity by 53%, they would benefit the economy as a whole and that this would result in growth. You see, our electricity is so cheap that it is not attractive for the private sector to invest in the electricity supply business. Give me a break! Eskom has the monopoly, there are other barriers to entry that far outweigh the cost of putting up new power generation facilities.

In the real business world you can’t come up with a bunch of feeble arguments to push up your prices by 53% - if you did, your business will shut down in no time at all. If you get into a crisis then you manage it in a way that ensures that the business remains a player in the market place. This happens through sound leadership - you cut costs, you innovate, you plan properly and execute your decisions effectively. In other words apply logic and sound management and business principles. I guess this does not apply to a monopoly.

A private sector executive who ran his business the same way Eskom is being run, would have been without a job a long time ago and would certainly not have been paid a fat bonus.

17 February 2008

Nuclear power - “Consultation, what consultation?”

Thuyspunt, the middle penninsular is one of the proposed sites for a nuclear power station.
It is within an stone's throw of Oyster Bay and spitting distance from St Francis Bay, when the South Westerly wind blows.
Do we want a nuclear power station on our doorstep? Definitely not!


I am beginning to get the distinct impression that the term “consultation” in South Africa means different things to different people.

When Eskom and the politicians announce that they are going to consult on important issues, it in fact means they are going to tell you what they are going to do. Yes, you can have your say and you can even voice your opposition, but that is all irrelevant – they are going to do it anyway.

Early last year Eskom announced that the price we pay for electricity was cheap, in comparison with the rest of the world and needed to be adjusted accordingly. The reality is that the revenue from the increased tariff was needed to fund capital projects, like pebble bed nuclear reactors. They said they would be initiating a process of consultation with the public to increase the rates by 18%. They have recently announced that the increase will now be 14% - so much for consultation.

Given the fact that Eskom’s appeal to consumers to achieve a 10% reduction in power consumption, has been exceeded, it means that income wise they will be back to square one – do the maths. So where will the money for capital projects come from now? What will the next surprise be?

Now let’s take this principle to the nuclear power station debate.

I have in front of me a document from Acer (Africa) the environmental consultants headed “ESKOM – ENVIRONMENTAL IMPACT ASSESSMENT (EIA: 12/12/20/944) FOR A PROPOSED NUCLEAR POWER STATION AND ASSOCIATED INFRASTRUCTURE”, “DRAFT SCOPING REPORT” for “PUBLIC REVIEW AND COMMENT” dates 28 January 2008. The project documentation can be obtained on the Eskom web site –
www.eskom.co.za/eia.

When you read this documentation you can only get the impression that the process is far from complete and still requires in depth consultation before a final decision is made.

When you hear the politicians and bureaucrats talking, it is as though the decision has already been made. The CEO of Eskom announced last week that the second nuclear power plant will probably be built at Atlantis near Cape Town, but does not rule out some of the other sites.

One could even be excused of coming up with conspiracy theories about deliberate black outs, with the vested interests and the amount of money involved in this development. Inconvenience the public enough and any alternative will become palatable.


Nuclear fuel processing is "sacrosanct" to South Africa, and it "will happen",
Minerals and Energy Minister Buyelwa Sonjica said in November last year, while
addressing media after government and private institutions from South Africa and
Japan signed a range of memorandum of understandings (MoUs), dealing with
technology transfer and the supply of precious metals.

She stated
that "I would think that the involvement of Toshiba [Power Systems], which has
the technology that would be required, is an indication that there will be a
partnership" Toshiba Power Systems has nuclear fuel production technology, as
well as nuclear fuel reprocessing technologies, both of which the South African
government has expressed interest in.Sonjica also spoke firmly of South Africa's
nuclear fuel production ambitions. "We are going to beneficiate uranium in South
Africa," she stressed. "That is sacrosanct."

She said that
the agreements would result in investment in South Africa, but did not give a
figure.

South Africa was planning on building at least five
nuclear power stations by 2025, to produce 20 000 MW.
Government wanted to
ensure that the country had enough feedstock to fuel these plants. The country
had traditionally been one of the biggest uranium producers in the world, and
was looking to start enriching uranium. South Africa had before enriched
uranium, while the apartheid government was in power . (Source:
Engineering News and Mining Weekly from an email circulated by CANE)
By the way this is the same minister who when presenting her ten point plan to Parliament to save electricity suggested, “Go to sleep earlier so you can grow and be cleverer”. She subsequently denied this saying her comment was taken out of context, but Hansard, the official Parliamentary records exposed the lie.

What of costs and vested interests. The following is an extract from the Wall Street Journal of Tuesday November 13 circulated by Pelindaba Working Group a member of the national Coalition Against Nuclear Energy.


The U.S. in principle supports South Africa's effort to become a nuclear-fuel
provider and sees promise in its new reactor, said U.S. Assistant Secretary for
Nuclear Energy Dennis Spurgeon. Its efforts highlight Washington's calls for an
international agreement to limit enrichment and reprocessing technologies to a
select group of nations in return for help in developing nuclear power
elsewhere
, he said. He added the U.S. expects South Africa, which has been
plagued by rolling blackouts, plans to add 40,000 megawatts of capacity in the
next 25 years and half ofthat is expected to come from nuclear-power plants.
South Africa's state-owned power utility Eskom Holdings Ltd. at present has two
aging nuclear generators, the only such commercial facilities in Africa.

Much of South Africa's effort is focused on a tiny, low-cost reactor being developed on
the coastline just north of Cape Town. The design has drawn the attention of the
U.S. Department of Energy, which has awarded a $3.7 million grant to study its
potential in other areas. Mr. Spurgeon said the technology is one of a dozen
designs being considered by a $250 million U.S. initiative that aims to bring
small-scale nuclear reactors to developing countries.

The technology is being developed by Pebble Bed Modular Reactor Ltd., which is 15% owned by Westinghouse and the remainder by the South African government and state-owned Eskom.

Proponents said the pebble bed, once commercialized, can be built more
quickly and inexpensively -- in two years for about $500 million. Others are
more dubious about its prospects. Critics cite significant delays and a run-up
in costs since plans for the pilot reactor were first made in 1998.


What we are seeing, I believe, is bigger than just a solution to resolve the rolling black outs in South Africa.

The development of the pebble bed modular reactors has the interest and backing of the developed nations and the large multinationals, who have already made big financial investments in the process. This is new and as yet untested technology, which I am sure the citizens of developed nations will not want on their doorstep and would resist with great vigour. So why not make Africa the “guinea pig” – if it’s a success here will be a lot of money to be made, if not who cares its only Africa.
All this begs the question, are we going through a legitimate process of consultation or are we just through the motions?

06 February 2008

Eskom Survival Kit

Guess who has been shopping?



With the increasing power cuts we decided to make life a bit easier by stocking up on a few essentials. A new gas cylinder is a necessity - ours are 30 years old and are beginning to do strange things. Batteries for the torches and the bedside alarm. Matches and vanilla candles - may as well make them smell nicer. Then there are the rechargeable lights, which have car chargers as well - that back up may come in handy.
Oh and let me not forget the gas hob we installed early last year in anticipation of further power cuts. Other gas backups are a light, a cooking ring, a wok and a barbeque.