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Eskom Declares Power Emergency, Asks South Africa to Cut Use

Eskom Holdings SOC Ltd., the utility that supplies 95 percent of South Africa’s electricity, declared a power emergency and asked industrial users to cut consumption by at least 10 percent today.

The demand is in place until 9 p.m. after four generating units went down during maintenance earlier today, Andrew Etzinger, a spokesman for the Johannesburg-based utility, said by phone. The request was made under the so-called declaration of emergency protocol that was agreed with users in 2008.

“Eskom calls on all customers to reduce electricity usage,” the company said in a statement. “We are hopeful that by applying these measures, coupled with support from all electricity consumers, we will achieve the required load reduction necessary to protect the national grid.”

The local units of ArcelorMittal, BHP Billiton Ltd. and Glencore Xstrata Plc are among the 32 companies that are members of the country’s Energy Intensive Users Group that can be called on to reduce usage when Eskom’s reserves are running low. The utility, which supplies power to South Africa’s 52 million people, is spending 500 billion rand ($45.1 billion) to replace aging equipment and add plants to avoid the blackouts that affected homes,mines and factories for five days in 2008.

‘Virtually Zero’

Eskom’s reserve margin is “virtually zero,” Etzinger said. “We have all our generators running at full capacity and at the moment we’re able to meet demand. But recognizing demand will increase by 1,500 megawatts as we go into this evening’s peak, that would make us vulnerable.”

South Africa is the world’s biggest producer of platinum, used in catalytic converters that reduce harmful emissions from vehicles, and the sixth-largest miner of gold. Eskom, which produces about 85 percent of its electricity from coal, last declared a power emergency in November, when supplies remained tight for about 10 days.

The supplier “kept the lights on by the skin of our teeth” in November, Chairman Zola Tsotsi said Dec. 5. Chief Executive Officer Brian Dames announced his resignation that day and will step down at the end of March.

Eskom asked large customers to “voluntarily cut” by as much as 30 percent, Shaun Nel, a director at the Energy Intensive Users Group, said by phone. “Members can do it voluntarily for a while, but at some stage there has to be a more equitable share of the burden.” Large customers have cut usage by 1,000 megawatts since earlier this week, he said.

Cahora Bassa

Eskom’s capacity on lines from the Cahora Bassa hydropower plant in neighboring Mozambique was reduced, Nel said. The facility supplies 1,300 megawatts of the utility’s capacity.

The utility has asked local municipalities to switch off residents’ hot-water heaters to help reduce consumption, Etzinger said. Some local authorities in the country routinely switch off water-heating systems, known in South Africa as geysers, to save power, he said.

About 23 percent of Eskom’s 42,500 megawatts of installed generating capacity have been out of service this year, according to Bloomberg calculations made using the utility’s data. Capacity exceeded supply by an average of 7.5 percent in the period, half the 15 percent buffer that the company targets.

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