Although power utility Eskom has managed to keep the lights on for more than three months, an expert warns tariff increases will become a frequent reality if the correct policy decisions are not taken.
Speaking in an interview on Salaamedia on Thursday, CEO of Sinan Energy, Mohamed Madhi, said Eskom would have to keep abreast with developments in the energy sector if it was to fend off the growing private sector.
“What they need to do is run efficiently. But the nature of the electricity industry is such that it is undergoing a remarkable change in terms of technology and in terms of the cost of private sector power.”
SMread: City Power defends R200 tariff as necessary for reliable electricity supply
The increasing involvement of the private sector in electricity generation meant more tariff increases from Eskom, he said. South Africans are already paying 405% more for electricity than they were in 2010.
“Eskom’s customer base is eroding, there’s no question about it. Eskom’s cost base, at the same time, is also going up because of its huge debt. The net result of that is we’re going to have very high tariffs going forward,” he said.
While it was something to celebrate, a loadshedding-free streak is by no means a complete victory for citizens because tariff hikes are “not a sustainable solution”, he added.
“Even if Eskom has a high availability factor and all of those good things, we’re still going to have very high tariffs from Eskom. The country and policymakers need to focus on boosting and stimulating alternative forms of energy as quickly as possible.”
