Sunday, June 16, 2024

Botswana reels from worst power crisis ever

Gaborone’s production line has ground to a standstill. Scores of retailers in some of the city’s major shopping malls could not open for business yesterday (Saturday) and desperate investors scrambled for the few generators on the private market as Botswana reeled from the worst power crisis ever. Companies leasing generators had run out of stock by Friday and banks could not disburse funds on Saturday because of the power outage. Even some of the city’s biggest citizens were caught out in the power crisis: American Embassy and other diplomatic missions relied on leased generators to stave off the blackout.

Cellular phone service providers and telecommunications operators like Orange and Botswana Telecommunications had to scour the private market in search of diesel powered generations to keep their towers running. Parts of Gaborone’s business districts like the Commerce Park were closed for business for most of Friday and Saturday due to the morale sapping load shedding. The situation is however expected to get worse before it gets better as Eskom threatens to pull the plug on power exports to Botswana unless the situation in South Africa improves.

Eskom confirmed on Friday that it had decided to extend “at risk” short-term electricity purchases from independent power producers (IPPs) and municipal generators to the end of May, despite not having received regulatory approval to do so. However, it was still in discussions with government about securing the necessary financial resources to continue with the contracts after May. The contracts were initially terminated in December, owing the utility’s perilous cash-flow position ÔÇô a move which raised much concern in light of the country’s “tight” electricity balance.

Addressing an urgently convened briefing to provide an update on the state of the system ÔÇô which on March 6 could only be stabilised through the extensive use of economy- and morale-sapping load shedding ÔÇô outgoing CEO Brian Dames indicated that the extension decision had been taken in the interests of mitigating the use of its “extremely expensive” open-cycle gas-turbines (OCGTs).The diesel-fuelled power plants cost Eskom more than R10-billion to operate last year and were run at costs that were between 16 and 18 times more expensive than its coal plants.

It emerged that about 1 000 MW of short-term IPP capacity had been procured, which Eskom would argue was done “prudently” when it eventually approached the National Energy Regulator of South Africa (Nersa) for a revenue “claw-back” through the Regulatory Clearing Account (RCA). Eskom had already submitted an RCA application to Nersa for the second multiyear price determination period (MYPD2), which endured for the three-year period to March 31, 2013, and was awaiting a response.


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