Eskom faces coal supply shortfall, long term contracts coming to an end – manager

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JOHANNESBURG, January 18 – State-owned electricity utility Eskom is grappling with a coal supply shortfall at several power stations with long term contracts coming to an end, a senior company executive has said.

South Africa is also experiencing lack of new mining investments in large scale coal mines and execution of current mining rights, while investors and funders are migrating away from coal technology, Eskom acting senior general manager for primary energy Dan Mashigo said during a public hearing on the company’s application to effect tariff increases.

“The environment in which Eskom is operating is quite dynamic,” Mashigo told the hearing held by the National Energy Regulator of South Africa (Nersa)  in Durban on Thursday.

“Whilst Eskom for instance is regulated, the coal market is not regulated and we have to compete with the export market for Eskom grade coal. At the same time deal with the growth of the disruptive renewable energy sector in the low demand growth era.”

The cash-strapped state company has asked Nersa to approve a 15 percent annual increase in tariffs for three years.

The Durban hearing was continuing for a second day on Friday. (ANA)