Consumers must pay energy bill

Zweli Mokgata

Zweli Mokgata

While the South African environment is set to benefit from new tariffs designed to stimulate renewable energy development, consumers will feel the pressure of higher prices.

The National Energy Regulator of South Africa (Nersa) released its new feed-in tariff regulations for renewable energy projects (an incentive structure to encourage the adoption of renewable energy through government legislation) this week.

Thembani Bukula, head of regulation at Nersa, said: "The energy regulator has set feed-in tariffs based on the levelised cost of electricity. Every two years for the first five years of a new project, the tariffs will be reviewed."

With prices ranging from 90 cents to R2 per kilowatt hour (kWh), renewable energy producers will be getting paid multiples of what Eskom charges South Africans.

The most expensive technology is solar energy which will be paid R2,10 per kWh by the regulator, followed by wind energy at R1,25 per kWh.

Small hydro and landfill gas projects will be paid about 90 cents per kWh.

Eskom currently sells electricity for 22 cents per kWh, but has been looking to make an application to Nersa for an increase of 34percent in an effort to bring the tariff more in line with the cost of production.

The application was meant to be made in October but Eskom postponed, considering the impact it could have on the elections.

Cosatu spokesperson Patrick Craven opposed the increase and said that renewable energy tariffs should not affect consumers.

He said: "We support measures to protect the environment, but we insist that the burden of the cost should not fall on the consumer, and that the government should bear the capital costs for electricity infrastructure development."

South Africa has 40000MW of installed capacity most of which is electricity from the burning of coal. By 2013 government wants to have 1100 MW of all power capacity being based on sustainable technologies.