Eskom Cuts BHP Billiton's Power as South Africa's Grid Teeters on Edge of Load Shed

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's power utility Eskom (Johannesburg) reported last Monday that the power reserve margin available on the country's grid had fallen to 29 megawatts (MW), which represents only 0.08% of available power. This puts South Africa in "crisis mode," as the accepted industry reserve margin is 15% of available power.

The wafer-thin reserve margin caused the utility to enforce an agreement with BHP Billiton (NYSE:BHP) (Melbourne, Australia) that allows it to cut the power supply to BHP's energy-intensive aluminum smelters if the national grid reaches a tipping point. One of BHP's units recently had its power cut for a short period.

Eskom has similar agreements with other major power users as part of its emergency resources plan. It also switches in peak power gas turbines to protect the reserve margin.

As the Southern Hemisphere winter began to bite, the reserve margin fell to 63 MW (0.2%). Warning that there is a heightened risk of load shedding during the winter months, Eskom said that it can no longer defer planned maintenance at power stations, which have hit their technical and statutory limits.

Eskom has an installed capacity of more than 37,000 MW, but in some cases only 33,000 MW has been available due to maintenance and repairs.

For related information, see April 5, 2013, article - BHP Holds Out Against South Africa's Eskom to Maintain Smelter's Power at Half Price.

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