Some of the major transmission projects include a new 400kV transmission line and three new substations to strengthen the supply to the Platinum Basin, which will be completed this year. The new 765kV transmission power line and substations – approximately 1 450km – from Mpumalanga to strengthen the supply to the Western Cape, are scheduled for completion in 2010/11.

Since the capital expansion programme was approved in 2005, an additional 2 582MW of capacity has been commissioned. Ankerlig and Gourikwa power stations were formally opened in October 2007. In October 2007 the R20 billion boiler contract and the R13 billion turbine contract for the Medupi power station were awarded. In December 2007 Eskom awarded contracts worth about R31,5 billion for the building of the Project Bravo coal-fired power station. The return to service of the three mothballed power stations is progressing well. The target date of October 2011 for commercial operation of all 23 units (3 800MW installed capacity) will be achieved.

Eskom completed its second year of the multi-year price determination (MYPD) and faced significant challenges for 2008/9, based on the electricity price increase of 14,2% as approved on 20 December 2007 by the regulator (Nersa). The expansion programme will cost R343 billion over the next five years. There are further cost pressures due to increased primary energy costs, and the need to reduce consumption through demand-side management and power conservation projects. The impact on Eskom’s financial sustainability was reinforced by a credit agency placing the utility on “credit watch”. In order to address the financial sustainability of Eskom, an application was submitted to Nersa for a revision to a 60% (53% real) price increase for 2008/9 so that all prudent primary energy and accelerated demand-side management costs could be recovered. Nersa announced on 18 June 2008 an additional increase in the electricity tariff of 13,3% for the year ending March 2009 which resulted in a 27,5% average increase year-on-year. Nersa also ruled that the price increase to “poor” residential customers be limited to 14,2%.

The government, as shareholder, agreed to provide R60 billion of loan finance over a period of five years to assist with the funding of Eskom.

Eskom’s climate change strategy contains our commitment to reduce greenhouse gas emissions. We have developed a six-point plan (See here) to pro-actively manage the impacts of climate change on our business and people. Although the volume of CO₂ we emit will increase in the short to medium term, we are committed to reviewing our options, with a view to reducing the overall emissions. Lower carbon-emitting technologies, such as clean coal, nuclear and renewables, may play an important role in meeting Eskom’s diversification aspirations. To this end, a decision was taken last year to invest in a 100MW wind facility in the Western Cape. Energy efficiency initiatives both internal to Eskom and through our demand-side management programme will also result in CO₂ emission reductions.

Safety remains a major concern for us as we regrettably have to report the deaths of 17 Eskom employees and 12 contract workers in the past year.