Southern African states can plug into emergency power agency

CAPE TOWN – Namibia, Zimbabwe and Zambia could buy electricity from an emergency “short-term energy market” in the region should South Africa’s energy utility cut power exports, a senior official from a regional power agency said on Tuesday.

Despite an abundance of natural resources, such as coal and gas, southern African states are facing energy shortages as a result of chronic underinvestment and decades-long neglect. The energy crunch has also affected Africa’s strongest economy, whose energy utility Eskom needs to boost existing capacity by 2 000 megawatts a year for 20 years if South Africa is to meet a six per cent annual growth target.Although Eskom says it has no definite plans at the moment to cut exports to its neighbours to meet energy shortages at home, it can give 24 hours notice to cut supplies under loose agreements in place.”In case of a power shortfall, buyers can buy energy from the short-term energy market (STEM),” said Lawrence Musaba, coordination centre manager at the Southern African Power Pool in Harare, Zimbabwe.”The STEM was specifically designed to cater for errors in forecasting on the day of trade and to allow utilities to buy from the market to cover a shortfall or to provide power for a short period due to planned maintenance,” he told Reuters.TRADE CONTRACTS STEM, which is worth about $3 to 4 million per annum, is a firm energy market in the Southern African Power Pool where electric power is traded on a daily basis for delivery the following day, with full obligation to pay.Daily, weekly and monthly energy contracts are traded.According to Musaba energy demand in the region outstripped supply from 2002 onwards, with energy traded (GWh) between the utilities in 2005 worth about $3 million.Musaba said trading between Southern African Development Community (SADC) countries was conducted via two trading mechanisms – STEM and bilateral contracts.If the bilateral contract is “non-firm” power cuts are permissible when the supplier had constraints beyond their control, said Musaba.Eskom spokesman Fani Zulu said it was a “bit over the top” to say the utility intended to completely sever energy supplies to their three neighbours.”We have no intention of cutting off power to neighbouring countries.However, we have renewed supplier contracts over the past couple of years which allows Eskom to save energy during times of capacity shortages in South Africa,” he said.Zulu said Zimbabwe, Zambia and Namibia were the only three countries that could be affected should 24-hour notice be given, as South Africa tried to shore up its energy reserves, currently pegged at between 8 to 10 per cent of capacity.Eskom has total nominal capacity of 42 011MW, with 36 398MW available on the system, but is projected to run out of excess peak capacity in 2007 and excess base load the year it hosts the 2010 soccer World Cup.Officials say Eskom is looking at ways of offsetting the national energy shortfall and has embarked on a five-year expansion programme worth 97 billion rand with projects to import electricity from the Democratic Republic of Congo, Algeria, Sierra Leone and Angola in the pipeline.South Africa currently imports power from the DRC and Mozambique.Nampa-ReutersThe energy crunch has also affected Africa’s strongest economy, whose energy utility Eskom needs to boost existing capacity by 2 000 megawatts a year for 20 years if South Africa is to meet a six per cent annual growth target.Although Eskom says it has no definite plans at the moment to cut exports to its neighbours to meet energy shortages at home, it can give 24 hours notice to cut supplies under loose agreements in place.”In case of a power shortfall, buyers can buy energy from the short-term energy market (STEM),” said Lawrence Musaba, coordination centre manager at the Southern African Power Pool in Harare, Zimbabwe.”The STEM was specifically designed to cater for errors in forecasting on the day of trade and to allow utilities to buy from the market to cover a shortfall or to provide power for a short period due to planned maintenance,” he told Reuters.TRADE CONTRACTS STEM, which is worth about $3 to 4 million per annum, is a firm energy market in the Southern African Power Pool where electric power is traded on a daily basis for delivery the following day, with full obligation to pay.Daily, weekly and monthly energy contracts are traded.According to Musaba energy demand in the region outstripped supply from 2002 onwards, with energy traded (GWh) between the utilities in 2005 worth about $3 million.Musaba said trading between Southern African Development Community (SADC) countries was conducted via two trading mechanisms – STEM and bilateral contracts.If the bilateral contract is “non-firm” power cuts are permissible when the supplier had constraints beyond their control, said Musaba.Eskom spokesman Fani Zulu said it was a “bit over the top” to say the utility intended to completely sever energy supplies to their three neighbours.”We have no intention of cutting off power to neighbouring countries.However, we have renewed supplier contracts over the past couple of years which allows Eskom to save energy during times of capacity shortages in South Africa,” he said.Zulu said Zimbabwe, Zambia and Namibia were the only three countries that could be affected should 24-hour notice be given, as South Africa tried to shore up its energy reserves, currently pegged at between 8 to 10 per cent of capacity.Eskom has total nominal capacity of 42 011MW, with 36 398MW available on the system, but is projected to run out of excess peak capacity in 2007 and excess base load the year it hosts the 2010 soccer World Cup.Officials say Eskom is looking at ways of offsetting the national energy shortfall and has embarked on a five-year expansion programme worth 97 billion rand with projects to import electricity from the Democratic Republic of Congo, Algeria, Sierra Leone and Angola in the pipeline.South Africa currently imports power from the DRC and Mozambique.Nampa-Reuters