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Parliamentary question on Eskom’s demand for diesel

28 March 2008

One of the concerns about the energy crisis and Eskom’s inability to meet demand was that it might have a knock-on effect on fuel supplies, notably diesel. Here is the DA’s question to the Minister of Public Enterprises about Eskom’s management of its demand for diesel and his reply:

Dr S M van Dyk (DA) to ask the Minister for Public Enterprises:

(1) Whether Eskom’s demand for diesel for diesel-propelled power generators has increased since January 2007; if not, what is the position in this regard; if so, to what extent has it increased;

(2) whether Eskom consults with the SA Petroleum Industry Association (Sapia), the Fuel Retailers Association and PetroSA to ensure that sufficient diesel is available for all sectors of the economy; if not, why not; if so, what are the relevant details;

(3) whether Eskom, as one of the biggest consumers of diesel, expects that more diesel will be required in the following three to four months and notified the suppliers in advance of this increased demand so that more diesel can be imported; if not, why not; if so, (a) what are the relevant details and (b) what is the indication of diesel requirements for the rest of the year;

(4) whether Eskom foresees that the agricultural industry will have to curtail its demand for diesel in any way in order to accommodate Eskom’s requirements; if not, what is the position in this regard; if so, what are the relevant details;

(5) whether the pipelines from harbours will be able to cope with t he increased demand for imported diesel (oil); if not, what measures have been introduced to ensure that Eskom can deliver sufficient diesel to its plants.

Reply:

The diesel powered generators are open cycle gas turbines (OCGT’s). They generate electricity into the grid during times of peak demand and times when other (mid-merit and base load) plants experience unplanned outages. Because the OCGT’s are peaking plants, they are used only as a last resort, and are operated for a minimum period of time due to the high cost of fuel.

The OCGT’s were commissioned in the period between March and June 2007. In the first four months from July to October 2007, approximately 105 million litres of diesel were used. Approximately 186 million litres were used between November 2007 and February 2008. Eskom’s usage of diesel has therefore increased since January 2007 .

Eskom consults with the SA Petroleum Industry Association (SAPIA) and industry suppliers, including PetroSA. The Fuel Retailers Association has not been consulted since Eskom purchases its fuel at wholesale level. However, future consultation has not been ruled out.

Eskom representatives also serve with SAPIA on the Department of Minerals and Energy (DME) fuel supply strategic task team (FSSTT) for liquid fuel. The DME co-ordinates the country’s master plan for liquid fuel into the future, and Eskom as a large user, inputs its projected demand into the work of the task team.

Eskom foresees that it will use diesel on a continuous basis throughout the 20 year life of the OCGT’s. Once the new coal-fired power stations such as Medupi are in full operation, the OCGT’s will be used less. It is currently estimated that approximately 150 million litres of diesel will be used in the next financial year starting on 1 April 2008.

Eskom works closely with its suppliers. The current agreement with suppliers is that they be given firm orders up to 4 weeks ahead, and indicative volumes within a 10 to 20% tolerance, 4 to 8 weeks ahead of delivery.

Eskom does not foresee that the agricultural industry will have to curtail its demand for diesel in any way in order to accommodate its requirements. Since last year all incremental diesel demand throughout the country was imported as finished product.

Eskom’s projections will be used to determine if and when the importation and transfer systems will reach full capacity in the future. Studies have been undertaken to determine the capacity of the import infrastructure and timely initiatives to upgrade and/or improve transportation of fuel have already begun. An Environmental Impact Assessment Study, including public participation for a fuel pipeline or rail transport solution between Montague Gardens in Cape Town, and Ankerlig Power Station in Atlantis, is currently underway.

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One comment

  1. ME ZILLE AND THE DA IS FIGHTING A BATTLE THAT CAN NEVER BE WON.
    SHOULD THE UNTHINKABLE EVER HAPPEN AND THE MINISTER (ERWIN)
    AND THE ESCOM CEO, MAROGA, ARE RELIEVED OF THEIR VERY LUCRATIVE POSITIONS, THEY WILL, AS “VALUED” AND SENIOR ANC CADRES ONLY BE RE-DEPLOYED TO OTHER, PERHAPS EVEN MORE LUCRATIVE POSITIONS, WHERE THEIR (ANC) GAME OF RIPPING OFF THE PEOPLE OF SOUTH AFRICA, WILL CONTINUE.



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