As South Africa prepares for the 2010 Soccer World Cup, its power needs are increasing. The rapid growth of the construction industry, large infrastructure projects and transport upgrades all mean more electricity is needed. To meet these needs, the South African government, in conjunction with Eskom (the national power supplier) has designed a program of growth worth at least $21.4 billion over the next few years.
South Africa’s rapid economic growth in recent years has resulted in electricity demand rising faster than planners had anticipated: peak period consumption has risen by an estimated 15 percent over the past decade. That rapid increase has narrowed the gap between total electricity demand and the available supply.
Eskom, the state power company, has accelerated its capacity
expansion program in line with the
South African government’s drive
to boost economic growth to six percent by 2010, and investment
decisions will be based on this growth target. It is estimated
that this will result in average growth in demand of 4.4 percent
per annum, requiring approximately 47,252 megawatts (MW) of new
capacity – more than double the total existing capacity – to
satisfy new demand to be built between 2005 and 2025, or roughly
2,000 MW per annum.
The Government has also decided that Eskom will build approximately 70 percent of the new capacity required in South Africa. The balance is expected to come from independent power producers (IPP’s). In the short to medium term, Eskom will be the counterparty in the power purchase agreements with these IPP’s. The first of these is expected to consist of 1,000MW of oil-fired gas turbines for peaking use, which would be commissioned by the end of 2009.
Eskom estimates that up to $21.4 billion will be spent on new infrastructure for transmission and power generation projects in South Africa within the next five years. Feasibility studies for new power stations over the longer term (2007 – 2010) are well advanced. Projects include combined cycle gas turbine plants, each with a minimum capacity of 1,800 MW (base load). An investment decision has been made to build a coal power plant in the Lephalale area (minimum size: 2,100 MW) and planning is also in advanced stages for a 1,330 MW Braamhoek pumped storage facility in Drakensberg, on the border between Free State and KwaZulu-Natal.
The South African energy sector is dominated by coal, which is abundant and relatively cheap by international standards. Natural gas and crude oil production is very limited and consequently the bulk of South African crude oil is imported. Uranium reserves are large.
Renewable energy plays a limited but significant role,
particularly in large hydroelectric power 
generation. While very much in their
infancy, solar and wind energy are seen by some as growth areas
for the longer term future. Government is encouraging this growth
and a proportion of municipalities have expressed interest in
developing alternative power generation within their environs.
Products and services with immediate need or potential in South Africa include:
- Construction of New Power Stations
- Pebble Bed Modular Reactor (PBMR),
- Electricity Network Upgrade,
- Refurbishment of Turbines and Related Equipment,
- Transmission and Distribution Equipment,
- New Plant Equipment and Related Systems,
- Systems Control Equipment, and
- Renewable energy technology (to a limited extent).
For more information about upcoming energy-related opportunities for U.S. companies, please contact Mr. Bheki Ndimande, Commercial Specialist – Energy, beki.ndimande@mail.doc.gov or +27-11-778-4808.
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