If you ask almost anyone in the country they will tell you it has been a bad year for Eskom: unplanned outages at power stations have trimmed the already short supply of electricity, leading to power cuts countrywide.
But from Eskom's point of view, the verdict on 2007 will hinge on the December 20 decision by the National Energy Regulator of SA (Nersa) on future electricity price hikes.
If a hefty price increase is approved, it will take some of the sting out of all the lambasting directed at the utility.
But if the price increase is much below the 18.7 percent hike requested by Eskom, the parastatal will have to sit down with its shareholder, the department of public enterprises, and rethink how to fund its capital expenditure programme.
The five-year rolling capex budget has now topped R300 billion, and by 2025 Eskom is expecting to spend R1 trillion to double generating capacity to 80 000 megawatts.
Eskom is also tackling the supply crunch by looking to industry to harness its waste energy. On the demand side, it is encouraging energy efficiency.
These efforts have not yet borne full fruit, and the risk of load shedding and unplanned power outages is increasing.
Surprisingly, Eskom scraped through a winter of record demand with no disruptions.
But as summer rolled in and Eskom started its maintenance schedule, load shedding began.
The maintenance of power plants is planned to take place after winter's peak demand for heating power, but if power stations have unexpected outages, supply is further limited.
Even though supply to aluminium smelters has regularly been interrupted to avoid load shedding, Eskom has had to cut supply in rolling blackouts on several occasions and continues to warn of tight supply.
Eskom's investment programme is well under way, but long lead times in securing equipment and environmental and regulatory approvals means the reserve margin between peak supply and demand will only improve from about 2015, when the Medupi power station is fully commissioned.
Earlier this year two new plants able to generate a combined 1 000MW were commissioned at Mossel Bay and Atlantis in the Western Cape. But these plants, which run on diesel, are only used as back-ups in emergencies during peak demand as they are expensive to operate.
A further 1 000 MW at these two sites will be available by mid-2009.
Eskom has begun work on the Ingula pump storage system in the Drakensberg and Engineering News reported last month that it had approval for another pump storage facility known as project Lima.
Ingula, with a capacity of 1 330MW, is due to be completed in 2012 and Lima, which is still awaiting final investment approval from Eskom, could generate 1500MW by 2014.
Pump storage schemes use excess electricity in off-peak hours to pump water from a dam at low altitude through tunnels to a high altitude dam. During peak demand periods, water is released from the top dam to the bottom dam, turning hydro turbines to generate electricity.
Plans to generate new base load power kicked off with the signing last month of major contracts for boilers and turbines for the 4 800MW Medupi power station at Lephalale in Limpopo, the country's first new coal-fired power station to be built since 1994.
Hitachi won the R20 billion boiler tender and Alstom was awarded the R13 billion turbine contract. More than half of the combined value of the contracts will be procured locally.
With these deals signed and delivery secured, Medupi could be operating one unit by 2012 and be fully operational by 2015.
Eskom's second new coal-fired power station, Project Bravo near Witbank in Mpumalanga, will use the same suppliers.
Other projects include the return to service of mothballed power stations, initial work on a new nuclear plant, a wind farm and research into solar energy generation.
Nuclear future
Eskom's nuclear programme, which envisages traditional and modular reactors delivering about 20 000MW of power, has gained momentum with the onset of talks with preferred suppliers Areva and Westinghouse.
Eskom will spend part of its R300 billion capital budget on the initial work for the first of a possible six new nuclear plants.
A final decision on the investment in nuclear will be made in June next year. Bongani Nqwababa, Eskom's finance director, estimated the cost of the first plant, which could be producing electricity from 2017, at R120 billion.
The six nuclear plants could cost R720 billion, or considerably more if equipment supply bottlenecks worsen.
Environmental impact assessments for proposed nuclear power stations are being conducted at five coastal sites: Brazil and Schulpfontein in the Northern Cape; Duynefontein and Bantamsklip in the Western Cape; and Thyspunt in the Eastern Cape. One of these is expected to be selected for the first nuclear power station.
There is opposition to the use of atomic energy from environmentalists, who have complained that the government's draft nuclear policy is hasty and ill-informed. Nevertheless, there is no legislation prohibiting Eskom from proceeding with a new nuclear power plant even if this policy is not finalised before it is ready to build.
The government is also pursuing pocket nuclear installations through its pebble bed modular reactor project. Construction of the R16 billion demonstration plant for this technology, which still has to be proved commercially viable, could begin in 2009 and be commissioned in 2014. If viable the commercial units could be operating from 2017.
Renewable energy
Environmental groups argue that not enough resources are being ploughed into clean, renewable energy sources.
But Eskom says wind and solar power will not provide a reliable source of electricity on the scale required.
The utility aims to reduce coal's contribution to its power output from 90 percent to 70 percent by 2025. Coal-fired power plants emit a great deal of the greenhouse gases blamed for global warming.
Tony Stott, Eskom's senior manager for nuclear stakeholder management, said: "Energy efficiency, renewable energy and nuclear power are receiving attention, with nuclear power being the only viable option to make a meaningful difference in Eskom's future trajectory of carbon emissions while … providing base load electricity generation."
Eskom is working on a 100MW wind farm after a pilot project proved its viability. But it is not feasible in South Africa to generate continuous power from wind as few areas have constant strong winds.
Solar power is more promising. Eskom has allocated R2 billion to subsidise the installation of solar water heaters in homes and buildings.
This is part of the R10 billion Eskom has earmarked for its demand-side management programme, which aims to reduce consumption by 3 000MW by 2012 and 8 000MW by 2025.
Other initiatives include subsidising energy-saving light bulbs and efficient appliances.
Part of the challenge in promoting solar water heaters is ensuring that the industry has the capacity to meet demand.
Eskom is hoping international and local investors will support the expansion of this industry.
The utility plans to spend R3 billion developing a 100MW demonstration solar generation plant in the Northern Cape, which has one of the best solar resources in the world.
If successful this could result in thousands of megawatts being generated from the sun.
However, this is a long-term vision that may only materialise after 2025.
Private power
Eskom has received bids from industry to generate up to 5 000MW by harnessing waste heat generated through industrial processes. This is known as co-generation.
A more realistic target is for between 900MW and 1 500MW to be fed into the national grid from this programme.
Nqwababa said the stumbling block now to finalising co-generation was the price to be paid for the electricity.
Low electricity tariffs have attracted big industry to South Africa, but they are a disincentive for the private sector to build power plants.
However, independent power producers are slowly starting to play a role.
After a process fraught with delays from the government over the tender specifications and from Eskom over the power purchase agreement, the department of minerals and energy has selected a consortium led by US energy company AES as its preferred bidder to build two power stations.
A combined R5 billion will be spent on plants in the Eastern Cape and KwaZulu-Natal for emergency peak supply.
The delay in selecting a bidder means that these plants will now be operating in December 2009 instead of October next year as originally planned.
Mark Pickering, the managing director of Mbane Power, which is part of the AES consortium, said the current target date of December 2009 was feasible because AES had already secured manufacturing slots for the equipment.
Ipsa, which is listed on the JSE's AltX board and London's Alternative Investment Market, has already completed an 18MW plant in KwaZulu-Natal, which is feeding power into the national grid. It is fast-tracking a 250MW plant in the Eastern Cape. Ipsa is also planning a 1 600MW plant at Coega.
If Nersa sanctions a substantial rise in electricity tariffs to reflect the cost of building new generating capacity and to promote energy efficiency, as Eskom and others argue it should, then more private sector players could become interested in this sector.
After all, the government expects the private sector to contribute 30 percent of all new power to be built by 2025.