February 23, 2010 / 7:59 AM / in 8 years

S.Africa's power supply still at risk: minister

DURBAN, South Africa (Reuters) - South Africa is still facing a power shortage and will need to rely on nuclear power, renewable energy and private investors to meet growing demand, the energy minister said on Tuesday.

<p>Electricity pylons seen as the sun sets in Soweto outside Johannesburg, November 22, 2009. REUTERS/Siphiwe Sibeko</p>

Energy Minister Dipuo Peters said power cuts, which brought the country’s vital mining industry to a standstill for days in early 2008, was an ongoing concern in Africa’s biggest economy.

“Many people still do not realise that we are not out of the woods yet,” she told an African utility conference in Durban.

Speaking on the eve of a decision by South Africa’s energy regulator on a power tariff request by state utility Eskom , Peters spoke against a steep rise in tariffs and stressed that industry needs to help subsidise the poor.

“We are not in favour of rapid increases in tariffs, but there is a need (for them) because there is an escalation in costs,” she said.

“Tariffs are going to rise steadily as we build more generation and distribution capacity of our power networks.”

Eskom, which supplies 95 percent of South Africa’s power, has been struggling to meet fast-rising demand because of its ageing fleet of plants and a lack of investment in new power capacity.

Peters said she backed a move to have independent power producers boost the country’s electricty supply.

“We firmly remain committed to ensuring that there is adequate space for private sector investment in the electricity generation regime in our country,” she said.

Peters said that while South Africa needs to build more power plants, it also needs to learn how to use energy more efficiently to ease the pressure on the system.

She said her department’s programmes, including the installation of energy efficient light-bulbs and the use of power-saving technologies in the energy-intensive mining industry, were aiming at saving 3,000 MW by 2014.

Peters said she hoped the recently introduced renewable energy feed-in tariff, a government subsidy for power generation using renewable sources that is shared by all consumers, would help boost investment in green power, using wind and solar sources in South Africa, and tap into the vast hydro potential elsewhere on the continent.

The energy department is developing a plan to define the country’s future energy mix, as it currently relies on coal for most of its supply.

“This process should then, quite inevitably, lead us to a projection of our energy mix that will demonstrate that nuclear will be used for baseload purposes in the period beyond 2020,” she said.

South Africa is currently home to the continent’s only nuclear plant, but plans to build more nuclear plants have stalled because of a lack of funds.

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