Eskom failing to plan ahead

ESKOM is asking South Africans to swallow a very bitter pill considering its request to the regulator for an unprecedented increase in the price of electricity.

ESKOM is asking South Africans to swallow a very bitter pill considering its request to the regulator for an unprecedented increase in the price of electricity.

The "bitter" part is clear to all but the "pill" part is not so clear. Swallowing a pill suggests that you are treating an illness.

The building plan for which Eskom is requesting this increase will lock us into a carbon-intensive future at a time when the world is investing more in renewable energy than in coal power.

We will overtake Poland as the country with the most carbon-intensive electricity in the world.

It will not be electrifying any new households, but will instead power large, wealthy industries.

Households consume only a third of electricity and agriculture and commerce a sixth. Mining and mining-related industry will continue to consume half of all electricity, although with these much higher prices, the incentive for investment in South Africa as a destination with cheap electricity will virtually disappear.

In fact, industry may be penalised on export markets as countries contemplate imposing higher border taxes on carbon emissions embodied in goods.

If independent power producers were to provide co-generation from industrial processes, wind and solar power, the average cost would be around R1,50/kWh. This would raise the cost of power from 33c/kWh to 58,6c/kWh, instead of the 82c/kWh that Eskom is requesting.

In addition, these prices would be fixed for 20 years through power purchase agreements, while Eskom has warned that it is likely to ask for more increases over and above its three-year raise. What Eskom is asking us to swallow is not a pill but, at best, bile and, at worst, a hook, line and sinker. Getting spitting mad is the correct response.

Peet du Plooy, Trade and Industry Adviser, World Wide Fund for Nature

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