Cape Town – Independent energy analyst Clyde Mallinson says South Africans may have to tighten their belts severely when Nersa announces next year's draft electricity tariff increase.
This follows after the National Energy Regulator of South Africa (Nersa) expected announcement about what is going to happen with electricity prices and power utility Eskom has asked for a 38% increase in electricity prices.
This comes after energy experts said Nersa is partially involved in some of the challenges that Eskom is currently facing.
Speaking to SAfm, Mallinson, said that there is no prospect of load shedding easing and people have to accept that they will be living with it for a very long time and everything is depending on the increase of tariff.
On Wednesday, Eskom CEO Andre De Ruyter stepped down.
“I think there is the prospect of increasing load shedding not easing it, although we are heading to holiday season this means there will be reduction of demand, so if there will be any easing it would be a result of demand reduction rather than generation increase,” he said.
Mallinson also predicted that there is a high possibility that the current Stage 5 of load shedding might lapse to January next year because of the challenges that Eskom is currently facing at the moment.
“It looks like Eskom’s own prediction for the rest of 12 months it will be Stage 3 almost every day, but in that prediction of Stage 3 for next year they have R60 billion to burn diesel in which the model says if you got capabilities then do it.
“What they haven't done is keep it up to the fact that they haven’t got a budget of R60bn to burn that diesel and for the fact that we don’t have billions that are required; probably there will be more stages of load shedding above stage 3,” he said.
He also said if Nersa doesn’t give Eskom a bigger increase this will result in Eskom requiring more financial bailout but if it does, this means Eskom will require less bailout from the government.
“It doesn’t look like there is a connection between Eskom and Nersa, because Eskom is meant to be having a fair to two thirds of their debt being written off, and that’s still in the process at the moment for the debt being transferred to the Treasury.
“Now the application they have made for their increase doesn’t take account of a debt reduction, so they are kind of going ahead saying this, the increase we need should we still need to service our full debt and, on the other hand, treasury are saying they are going to write off one to two thirds of their debt in which case Eskom’s application would look totally different.
He further predicted that the increase that will be granted would probably be less than 20%.
IOL