Eskom electricity prices have skyrocketed — and it’s going to get worse

Average electricity prices in South Africa have surged by over 582% since load-shedding was first implemented in 2007.

Last year saw Eskom implement the greatest amount of load-shedding in 14 years. The utility also slapped an average increase of 15.06% on tariffs for the 2020/2021 financial year.

This was the biggest increase in electricity prices in the last eight years.

A large part of this increase was because Eskom won a series of court battles with the National Energy Regulator of South Africa (Nersa), allowing it to recoup more for unexpected costs to produce electricity.

Eskom is expected to collect more money for unexpected costs through price increases in the coming years.

One of the big drivers of these unexpected costs is spending on diesel used to operate open-cycle gas turbines (OCGTs) that can provide emergency generation during peak usage periods.

There is further bad news on this front, as the recent explosion of the Medupi Unit 4 generator has increased Eskom’s reliance on OCGTs.

With the unit’s replacement expected to take two years, Eskom will likely have to spend more on diesel than it had anticipated, a cost which may get passed down to the consumer.

In addition, the loss of this unit has pulled 794MW of capacity from the grid, increasing the risk of load-shedding.

Click on the link below for full report

Source: MybroadBand

Leave a Reply

Your email address will not be published.