Electricity in South Africa: where it is going?
Since the second half of 2019, the electricity crisis has worsened.
We are plagued by almost daily loadshedding across the country. Eskom’s Energy Availability Factor dropped to 65%, meaning 35% of its nominal generating capacity is down, the highest ever.
This is caused by Eskom’s financial and operational issues. Eskom’s debt ballooned to R450-bn due to mismanagement, poor planning and corruption. Eskom is not able to properly service and maintain its dilapidated 13 coal-fired power stations which make up more than 80% of its nominal generating capacity of 44.2 Gigawatts.
Moreover, internal corruption has been rampant, as we can see in the summons Eskom applied for on August 3 2020 against former CEO Brian
Molefe, other senior executives and Eskom board members to recover R3.8-bn in looted funds.
The increasing frequency of load shedding does not only paralyse Eskom’s customers but also affects its ability to stay afloat. Steep tariff increases are needed which will reduce demand, increasing Eskom’s financial troubles, requiring higher tariffs.
So, what are the implications for Eskom’s customers?
First, we have to expect tariff increases. There has been a 15% increase for 2021. The only way to avoid this impact is by reducing our consumption. Energy efficiency measures, like replacing electric stoves with gas, conventional lights with LED, are ways to cut your bills.
The second implication is that loadshedding will continue. You may want to look into generating your own electricity through a roof-top solar system with battery backup storage for nights and rainy days. Prices for such installations have dropped over the past few years, and with the added tax benefit of 100% write-off of the cost in the year of installation, the payback period is usually less than four to five years.
Third, we have to expect that centralised electricity will make way for de-centralised supply through “small-scale embedded generation”. Solar will be the key technology because it can be deployed cheaply and quickly. An independent power provider will design, install, run and maintain a tailor-made system on your site. Your price for electricity will be fixed for (usually) 10 years, with only an inflation adjustment.
Contact New Earth Energy for renewable energy solutions.