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Cablegate: Eskom Says Outages Possible

VZCZCXRO0485
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #1288/01 1641531
ZNR UUUUU ZZH
R 121531Z JUN 08
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 4759
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0808
RUEHRL/AMEMBASSY BERLIN 0626
RUEHBY/AMEMBASSY CANBERRA 0680
RUEHLO/AMEMBASSY LONDON 1530
RUEHMO/AMEMBASSY MOSCOW 0810
RUEHOT/AMEMBASSY OTTAWA 0642
RUEHFR/AMEMBASSY PARIS 1371

UNCLAS SECTION 01 OF 02 PRETORIA 001288

SIPDIS
SENSITIVE

STATE PLEASE PASS USAID
STATE PLEASE PASS USGS
DEPT FOR AF/S, ISN, EEB/ESC AND CBA
DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, M.SCOTT, L.PARKER

E.O. 12958: N/A
TAGS: ENRG EMIN EPET SENV BEXP AMGT SF
SUBJECT: ESKOM SAYS OUTAGES POSSIBLE

REF: PRETORIA 982 AND PREVIOUS

1. (SBU) SUMMARY: State power supplier Eskom repeated its mea culpa
and way forward themes in a business forum, admitting that there is
still substantial risk of load-shedding during this southern
hemisphere winter. Eskom called for consumers to implement ten
percent reduction in use through conservation and efficiency
measures. The power system remains extremely tight with
insufficient reserve margin. End Summary.

---------------
How We Got Here
---------------

2. (SBU) Eskom spokesman Andrew Etzinger spoke to the South African
Chamber of Commerce and Industry (SACCI) on June 11 about the status
of the power crisis. He prefaced his remarks to the SACCI with an
apology (again) for Eskom's failure to deliver reliable power.
Etzinger summarized the events that led to the January 24 "black
Friday" when Eskom could not guarantee power to the mines. Etzinger
described the "perfect storm" combination of low and wet coal
stockpiles, unstable power grid from planned and unplanned outages,
and risk of system collapse that led to interruption of power to
industry and unprecedented load-shedding.

---------------------
Where We Go From Here
---------------------

3. (SBU) Etzinger outlined steps that had achieved power system
stabilization, including 10 percent demand reduction from key
industrial/mining customers, increase in coal stockpiles, additional
maintenance completed, and steps for augmenting generation supply.
Etzinger stressed that the system remained tight and vulnerable and
that Eskom needed South African customers to reduce their
electricity usage by 10 percent across the board - and not only at
peak times. He highlighted the need to implement energy efficiency
and conservation measures in partnership with government and other
stake-holders. Etzinger called for implementation of a quota and
penalty system, where high energy users would be penalized for
wasteful consumption. He noted that government would have to
implement and regulate this system. Etzinger stated that coal
stockpiles at power stations had reached an average of 19.8 days -
close to its interim target, with no station under 15 days. He
admitted that it was difficult to accelerate installation of
promising solar water heaters at the targeted rate of 200,000 per
year when there was a skills gap of 5,000 qualified plumbers over
the currently qualified number of 5,000.

4. (SBU) Etzinger defended Eskom's approach to its neighboring
countries, stressing that Eskom was a net importer of electricity
with aspirations to import incremental quantities. He gave the
following data:

SA ELECTRICITY IMPORTS AND EXPORTS

(MW) (MW)
Country Imports Exports
------- -------
DRC 200
Zambia 100
Mozambique 1400 (Cahora Bassa) 900 (Mozal)
Botswana 350
Swaziland 180
Lesotho 24
Namibia/Zimbabwe when available
QNamibia/Zimbabwe when available

Etzinger stressed that Eskom could not stop exports to Mozambique
given that imports were significantly greater and growing. He
regretted that Eskom had stopped new connections to new domestic
customers, but it aimed to resume these to the extent possible.
(COMMENT: The opening of the newly constructed U.S. Consulate in
Johannesburg will be delayed if Eskom does not provide the necessary
power connection in the next few months. End Comment.) Etzinger
described Eskom's ambitious new generation program (reftel),
including high probability of finding a replacement for U.S. firm
AES for provision of two peaking plants (he did not mention Suez of

PRETORIA 00001288 002 OF 002


France by name as did the Energy Minister in a separate venue).

5. (SBU) COMMENT: There was little new at this presentation.
Eskom's Etzinger has developed a well-honed spiel from 500 radio
interviews and numerous power-point presentations, including a
regular apology to the public for Eskom's failure to deliver
reliable power. His main message is that the system remains at
risk, so consumers must conserve electricity. When Energy Officer
asked Etzinger before his presentation if there would be anything
new in his remarks, he replied, "not really."

BOST

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