21 Sep 2012 – Lynley Donnelly
South Africa is waiting anxiously to hear what Eskom’s latest round of tariff hikes will be but besides the tariff increases to pay for Eskom’s current construction programme – the building of the Medupi, Kusile and Ingula power stations – the big question is how it is going to fund new generation capacity after that.
The country’s 20-year electricity road map, the Integrated Resource Plan of 2010 (IRP2010), proposes that an additional 9600MW of electricity will be generated by nuclear power, which is roughly a quarter of the total new capacity needed by 2030.
The nuclear procurement programme alone could cost anything between R400-billion and R1-trillion, but another 32 000MW will be needed by 2030. How is South Africa going to pay for projects that will run into trillions of rands?
Eskom’s current programme is testing its ability to raise the money for the rest of the programme. The utility’s debt will peak at R350-billion in the next three years to pay for Medupi, Kusile and Ingula. That will cost R27-billion a year in interest for at least a decade to pay it off.
The government has issued R350-billion in guarantees to enable Eskom to secure financing.
The recently postponed release of Eskom’s latest multiyear price determination suggests frantic number crunching is going on behind the scenes. The delay, granted until the end of this month, was requested by the government to enable Eskom to “model additional scenarios”. But media reports suggest Eskom is seeking a double-digit percentage hike in tariffs.
Mail & Guardian
Apart from the energy hike you might be well aware of the water hike following in its footsteps. Water is said to increase with more that 80% in 2014. I am not FOR the tariff increase, but I am also not against it. It is a pity that our water situation in South Africa is based on mismanagement by our municipalities, but whichever way, at least it is forcing people to use less water. You can still have a beautiful garden by simply re-using your grey water. It doesn’t change your lifestyle at all, it simply means you use the same water twice, but bought only once. That will save you between 30% – 35% on your water account and by doing that you are helping the environment at the same time. Please conserve water.