General News

Fw: Legalbrief Environmental – SA must look to renewables, as Eskom flounders

Energy: SA must look to renewables, as Eskom flounders

If Eskom succeeds with its recent Gauteng High Court (Pretoria) application to have electricity tariff prices reviewed, it will receive a R69bn cash injection over the next three financial years. Consumers will be slapped with the first of a number of 16% increases from April. Eskom has warned that the economy faces ‘catastrophic harm’ if the High Court does not rule in its favour. Journalist Graeme Hosken says the legal standoff between Eskom and the electricity watchdog Nersa offers key insights into the ‘bruising’ struggle for control over tariff decision-making powers. In an analysis on the Times Select site, Hosken quotes energy expert Mark Swilling, who warned that ‘the biggest impact of this legal fight is the non-decision making currently going on, which is an absolute disaster’. ‘We need to make big decisions immediately to save the economy, but we cannot because of these fights. It does not matter what the outcome is – higher or lower prices – both are not the solution. Higher prices are bad for the economy and lower prices are bad for Eskom.’ Swilling describes the court case as ‘a battle over an institution in a death spiral’. He says the spiral is caused by the need for higher prices to cover rising costs, which causes a decline in demand, which increases electricity costs as Eskom battles to make ends meet. ‘It is a no-win situation. Eskom is in serious trouble. It has no choice but to get more revenue through higher prices, with Nersa mandated to defend the consumer at all costs. The very solution exacerbates the problem.’

Hosken turns to energy expert Clyde Mallison, who has argued that this is the time to focus on renewable energy as a solution. ‘All the time lost from a lack of decision-making has seen renewable energy prices drop dramatically.’ He argues that if Eskom had an entirely new coal-powered fleet, operating at full capacity, and it was replaced overnight by a renewable energy fleet, it would cost R100bn less annually to finance, maintain and operate. ‘The economy is hanging on by an umbilical cord. This court case is a sideshow. It draws away from the undeniable choices that must be made and chance the country has to turn the crisis around.’ Swilling believes that within a year massive quantities of renewable energy could be brought into the national energy grid. ‘It’s what citizens and the mining, finance and organised business sectors want.’

Full analysis on the Times Select site

Add Comment

Click here to post a comment

Leave a Reply

WP Twitter Auto Publish Powered By :