Insane: S.Africa: ESKOM wanted to increase electricity prices by over 30% – Actual increase 19%

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[Eskom is spiraling downwards and they are screaming for more money as always. Jan]

South Africans will be paying a lot more for electricity this year while also experiencing elevated levels of load shedding, says civil action group Outa – and for most households, there’s no escaping either.

Energy regulator Nersa on Thursday (12 January) granted embattled power utility Eskom a near 19% hike in tariffs for 2023, allowing the group to recover R319 billion from customers.

Nersa granted an average increase of 18.65% for standard tariff customers in April 2023, so the price goes from 146.48c/kWh (2022/23) to 173.80c/kWh, and then another 12.74% in April 2024 to 195.95c/kWh.

While the approved hike was far below Eskom’s application of 32%, it is still a massive blow to consumers who have been hammered over the last 12 months by a cost of living crisis driven by high inflation.

Meanwhile, load shedding has ramped up to record highs, with Eskom having implemented rolling blackouts on a near-permanent basis since September 2022. Load shedding is currently at stage 6 until further notice.

According to Outa, this is a severe challenge for South Africans.

“There is no escape from spiralling electricity prices and increased load shedding, as customers are expected to shore up our failed electricity utility,” Outa said.

“Eskom is in severe trouble: it had to update its original price application last year, but even that does not take into account the enormity of the current load shedding and thus the extent of the need for expensive diesel-powered open-cycle gas turbine (OCGT) generators.”

The use of OCGTs was a particular sticking point for Nersa. While it granted Eskom about 90% of the allowable revenue it asked for, the reduction included halving its planned use of OCGT during load shedding from 12% of total generation to 6%.

Nersa pointed out that even at 12%, Eskom would still have to loadshed and ordered it to improve energy availability (EAF). The regulator set an EAF target of 65% for Eskom to meet its conditions. It is unclear what Nersa will do if this target is not met.

The regulator stressed that the OCGTs are only supposed to be used in emergency situations or to stabilise the grid during peak periods. However, Eskom has had the turbines running almost full-time and has come to depend on them as a primary energy source for the grid.

Outa said that the blame rests squarely with the government, which has failed South Africa in this regard.

“The failure of government to fast track the Independent Power Producer Procurement Programme has meant that excessive diesel is being consumed as Eskom is trapped in almost full-time use of the OCGTs to reduce load shedding,” the group said.

While Nersa’s conditions are a step in the right direction, Outa said that it is not enough to end the electricity crisis.

“Eskom has acknowledged that corruption adds to the breakdowns at the coal power stations, and it is urgent to address this effectively. We also need a forward-looking energy minister who sees the value of renewable energy and fast tracks its implementation to get affordable energy onto the grid,” the group said.

The 18.65% price hike will kick in for Eskom direct customers on 1 April 2023. Municipal customers will also see price hikes as a result, which will be announced in the coming months, and come into effect from 1 July 2023.

Source: https://businesstech.co.za/news/energy/655911/there-is-no-escaping-eskoms-spiral/?utm_source=newsletter