Address by Minister of Public Enterprises Alec Erwin at Kusile Power Station sod-turning

The Premier of the Mpumalanga province, Mr Thabang Makwetla
The Executive Mayor of Nkangala District Municipality, Councillor Mashilo
The Chairman of Eskom, Mr Bobby Godsell
The Chief Executive of Eskom, Mr Jacob Maroga
Ladies and gentlemen.

Building New Generation Capacity

Today marks another important step in the Eskom build programme. South Africa must double its electricity capacity over the next twenty years, in order to ensure the necessary security of electricity supply that underpins sustainable economic growth and socio economic development.

It is essential that we maintain the momentum and the size of the build programme currently underway as delays will place security of supply at risk. Bravo constitutes the second of the large new generation coal-fired power stations being brought into the system.

However, as we move forward with further additions to the system we have to diversify our primary energy sources. The government have come to the conclusion that in South Africa the introduction of nuclear energy offers the largest source of emission reduction energy technologies. In addition solar, wind and coal gasification technologies are being developed and piloted.

The South African Power Project
The doubling of electricity capacity, to 80 000 MW by 2025, is occurring at a time when the rest of the world is engaged in similar activities, resulting in a number of challenges, including balance of payments pressures, and the scramble for skills.

This is a mammoth task which requires a coherent and strategic approach from South Africa, in order to take advantage of the opportunities it offers. This is the aim of The South African Power Project (TSAPRO) which is assessing how we can secure our equipment supply lines and development significant industrial capacity by leveraging off the estimated R1,3 trillion that will have to be spent to double our capacity over the next two decades.

Developing the relevant design and manufacturing capabilities to globally competitive standards will allow us to localise a large proportion of our equipment needs, and to develop export capacity as a part of the global energy equipment supply network.

The potential for South Africa to carry out such a programme exists because we are a major supplier of raw material in the form of coal and uranium and we have significant manufacturing and technology capacity, including nuclear technology.

With the current global energy shortage likely to persist, supply conditions are expected to remain in favour of suppliers for some time, and therefore for reasons of cost and security of supply alone, South Africa must consider enhancing its manufacturing capacity.

Unless we develop our national manufacturing capacity and capabilities to both supply the build programme and to, over time, export, the massive import bill we are likely to incur will have an adverse impact on the economy. These are opportunities which have immense potential to transform the South African economy into a world class global advanced manufacturing economy, and we cannot afford to miss them.

Mpumalanga Province
There is little doubt that the construction of Bravo will have a positive impact on the economy of the Mpumalanga province. However, we also have to tackle the urgent problem of the condition of the roads in the Mpumalanga area. Driving here, you would have seen that the road network between the mines and the power stations has been severely damaged.

This is the result of an average of 800 heavy laden trucks travelling this route on a daily basis. An additional 45 million tons of coal has now been procured from mines in order to maximise output at coal fired power stations.

90% of this will be transported by road, which will no doubt exacerbate an already critical situation. A long term strategy between Eskom and Transnet, which will see a move away from roads to increased rail volumes, is under consideration, but this does not solve the immediate problem.

While several measures are currently underway to minimise the impact of coal trucks on the roads, including an emergency road repair programme funded by Eskom, this is inadequate, and needs to be augmented by alternative measures to reduce the number of coal trucks on the roads in the short term, and immediate road upgrades are required for the remainder of the forecast truck volumes.

Three power stations, Majuba, Tutuka and Camden, are responsible for over 60% of all truck kilometres. Focusing immediate attention on this will address 50% of daily truck loads on the road. The cost of rehabilitation, repair and rebuilding of the priority roads will be larger than anything that the provincial budget can bear and accordingly this is a matter that is receiving urgent attention from all stakeholders, including National Treasury, the Department of Transport, as well as the provincial authorities.

Tackling the distribution sector
Another matter that is also receiving priority attention is investment in the distribution sector. The supply shortages we are currently experiencing have highlighted not only concerns about generation and transmission capacity in South Africa, but more critically, the adequacy of the distribution system to deliver electricity in all nine of the country's provinces.

In addition to generation and transmission, the distribution networks require urgent attention as we work towards ensuring reliability and security of supply.

The energy sector is a challenging one not only here but in the world as a whole as we grapple with the growing demand for electricity alongside the need to reduce emissions so as to mitigate against potentially devastating climate change. The task that lies ahead is by no means an easy one it requires boldness and a "Business Unusual" attitude. I would like to wish Mr Maroga and his team at Eskom all the best as the construction of Bravo commences. I have all the confidence that the Eskom team will deliver.