Africa's largest economy is battling a chronic power shortage that has curbed production at the world's top platinum producer and a major producer of gold because of electricity rationing by government. The national grid almost collapsed in early 2008, costing South Africa billions of dollars in lost output across all sectors as government enforced rolling blackouts to save the grid. Public Enterprises Minister Barbara Hogan said if demand management initiatives aimed at saving energy were not successful, and if industrial co-generation projects did not come on line, the risk of blackouts would increase.
"This risk progressively worsens through 2011 to 2013 until the capacity from Medupi power station comes on line," Hogan said in a written response to questions in parliament. Power utility Eskom plans to invest 461 billion rand to boost generating capacity and diversify away from reliance of coal-fired power stations, which provide about 95 percent of the country's power. South Africa is expected to sign contracts in March to source up to 1,143 megawatts from industry, including petrochemicals group Sasol, the world's biggest coal to fuel producer, and Sappi, the world's biggest producer of fine paper. The 4,800 MW Medupi plant is expected to produce first power by April 2012 when the first of six 800 MW units will be commissioned, although funding concerns could delay the project.
