Eskom’s extreme price hikes may place pressure on consumers and businesses, but one expert says they are neccessary.
Energy Council of South Africa CEO James Mackay says that although Eskom’s energy generation is stable, price hikes are necessary to transition away from non-renewable energy and are not unique to South Africa., Mackay said that South Africans will have to endure cost increases for the next two to three years as the costs are in the system.of Eskom asking the National Energy Regulator of South Africa for a 36.15% increase in electricity tariffs for its direct customers, translating into a 43.
“Then we will start seeing the more inefficient systems, such as power stations, coming out of the system, and cost will start to decrease.” “An old fossil fuel base-load set of assets which need to run, but increasingly moving into the invariable digital assets such as wind and solar batteries.Unlike most other nations going through this transition, South Africa has the added difficulty of corruption, which has created many inefficiencies and destroyed trust in the past, he pointed out.
Mackay points out that one can’t try to balance all three variables simultaneously. For instance, trying to rapidly reduce emissions would drive up costs, while increasing energy security will drive up emissions. Therefore, Mackay said South Africa will have to make some difficult trade-offs regarding those three variables over the next 20 to 30 years until the carbon-neutral deadline in 2050.
He said Eskom typically switches off units at its plants that are the most expensive to run. These generally are the power utility’s older power stations.
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