President Jacob Zuma said that while energy shortages remain a “serious challenge” for South Africa, the opening of the first 794MW unit of Medupi power station shows progress is being made.
“Pressure is being alleviated,” Zuma said Sunday at the official opening of the unit in the nation’s northern Limpopo Province. “There is light at the end of the tunnel.”
Bloomberg reported the first of six units at the plant will help state-owned utility Eskom Holdings. address blackouts that have hobbled South Africa’s economy for 99 days this year. The plant will be the world’s fourth-largest coal-fired station, according to Eskom. Medupi’s budget ballooned to more than R105bn as labour disputes and construction delays mean the project is now due for completion in 2019, seven years behind schedule.
Eskom will have strict project management to ensure future deadlines are met, acting Chief Executive Officer Brian Molefe told journalists at the Medupi plant.
“There’s no time to waste,” according to Zuma, who said the utility appreciates the need to bring the rest of the station online without further delay. “We must move faster as a country.”
Electricity rationing after years of underinvestment in aging plants has forced mines and factories to scale back production at a time when rising wage demands boost costs and commodity prices plunge. The rand fell to a record low against the dollar last week as Africa’s second-biggest economy shrank an annualized 1.3% in the second quarter.
Public Enterprises Minister Lynne Brown warned earlier this year that outages would last for two years. Eskom, which supplies about 95% of South Africa’s electricity, is investing R280bn rand to expand its generation, transmission and distribution capacity and maintain existing equipment.
Since the expansion started in 2005, almost 6,240MW of generation capacity have been added, according to Molefe.