South Africa to sign fuel deals to tackle power crisis

CAPE TOWN (TIP): South Africa will increase diesel and gas imports and sign a private sector coal-fired power plant deal as it seeks to stem chronic electricity shortages, the cabinet said on December 12. South Africa has suffered its worst power shortages since 2008 this month due to creaking infrastructure, power plant failures and emergency maintenance. State utility Eskom warned that if it didn’t continue to implement rolling blackouts, the entire grid could collapse as it lost up to a third of its 42,000 megawatt power generation capacity. “Cabinet remains concerned over the disruptive effect the recent power outages are having on the daily lives of South Africans and its impact on households and businesses across the country,” minister in the Presidency Jeff Radebe told reporters.

A private sector-led coal-fired power plant programme will be launched by January 2015, which should add 2,500 megawatts to the grid, Radebe said, without giving details on when the electricity would be delivered. South Africa will increase gas imports to supply its under-fuelled power plants, which should help add 500-2,500 megawatts to the grid, the cabinet said. The gas is mostly expected to come from neighbouring Mozambique. The government will also sign an agreement with the Strategic Fuel Fund and Transnet Ports Authority to improve diesel supplies to power stations, a problem Eskom has said is a major constraint on electricity output. The cabinet said it also had turnaround plans for struggling stateowned South African Airways (SAA), which will now be run by the treasury, rather than the public enterprise ministry.

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