Rollung blackouts continue

South Africa’s state-owned power utility restarted rolling blackouts as it seeks to replenish contingency generation sources by the end of the weekend.

Eskom Holdings SOC Ltd. started cutting 2,000 megawatts at 6 a.m. today after blackouts lasted until 8 p.m. last night Andrew Etzinger, a spokesman for the Johannesburg-based company, said by phone. The cuts are expected to continue until 8 p.m. and will be reintroduced tomorrow when 1,000 megawatts or 2,000 megawatts of power will be taken offline, he said.

Eskom, which generates more than 85 percent of its capacity from coal-fired plants, is rebuilding capacity at its contingency facilities including hydropower units and open-cycle gas turbines, Etzinger said.

“We are doing everything we can to start the week in a stronger position that we are now,” he said.

The utility is struggling to meet demand in the continent’s second-largest economy as its facilities age. It was forced to implement managed blackouts earlier this month after a coal silo cracked and collapsed, blocking conveyor lines to units at its Majuba plan. Large industrial users including steelmaker ArcelorMittal’s local unit and BHP Billiton Ltd. (BLT), the world’s biggest mining company, are required to reduce demand to avoid a total collapse of the grid.

The hydropower generation and open-cycle gas turbines “have been run very hard this week,” Etzinger said yesterday. “Basically they’ve been depleted, so we need to build them up again over the weekend which is why we will be doing load-shedding on Saturday.”

Eskom spent 10.6 billion rand ($968 million) running the turbines in the year ended March 31, 2014, more than the 3.6 billion rand it had budgeted.

The company is struggling to fill a 225 billion-rand cash-flow gap after the energy regulator granted it only half the annual tariff raises sought for the five years through 2018. Moody’s Investors Service reduced the utility’s rating to junk on Nov. 7, a day after cutting the sovereign. The country announced a 20 billion-rand rescue plan for Eskom last month, which is enough to preserve its rating, Standard & Poor’s said on Nov. 11.


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