Western Cape Business News

Send  Share  RSS  Twitter  29 Aug 2011

POWER SUPPLY: An Alternative To Eskom


Recent Western Cape Business News

WESTERN CAPE industries desperately need an alternative to expensive Eskom electricity if they are to remain competitive and ensure that manufacturing jobs are not lost.

This point was forcefully made to the Trade and Industry Minister,  Rob Davies, yesterday by the Cape Chamber of Commerce.

In a letter to the Minister, the Chamber’s president, Mr Michael Bagraim, pointed out that manufacturers in Gauteng had access to natural gas from Mozambique and this provided them with a cheaper and more efficient source of process heat than Eskom electrity.

He said the disadvantage would grow as Eskom tariffs increased and there was a real danger that some companies would transfer their manufacturing operations to Gauteng with a consequent loss of jobs in the Western Cape.

He pointed out that the increasing cost of Eskom power and the limited supply meant that there was not enough affordable electricity for the Industrial Development Zone at Saldanha, where the planned development could create thousands of new jobs.

The Chamber suggested that the solution to the problem was to make it possible for the Western Cape to import natural gas. This would be viable if a gas-fired power station were built to increase the supply of electrity and become an anchor customer for gas imports. It would then be possible to supply companies like Consol Glass, Saldanha Steel, the brickfields, the bakers and food processing companies and other industries that used process heat.

The power station could be built in partnership with the City of Cape Town. The letter pointed out that combined cycle power stations could be built quickly at lower capital costs than either coal or nuclear power stations and they could produce electricity within three years at prices that would be lower than Eskom tariffs in 2014.

The power station will increase the supply of electrity while the gas would enable industry to save electrity.

The Chamber asked the Minister for his help in securing permission to build the power station and persuading the port authorities to facilitate the building of a gas terminal.

Mr Bagraim also expressed the concern of Business at port and airport tariffs that were among the highest in the world and, in the case of the harbours, tariffs were double the average tariffs for other world ports.

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