Fin24

Business warned of power tariff spike

2011-01-12 12:54

Johannesburg - Energy services company Manoa said on Wednesday that South African businesses should prepare for a series of steep electricity tariff hikes, which are expected to continue until at least 2015.

"According to the department of energy's latest integrated resource plan (IRP), which details the country's long-term energy generation and usage prospects, the price increases will be used to help fund urgently needed electricity generation projects worth many billions of rand," said Manoa.

The IRP's scenario planning assumes that business and South Africans in general will become vastly more energy efficient over the next short while, MaNoa's Esmé Bluff said.

"However, if this is not the case, the power cuts we're expecting to begin from next year (and run up until 2016) will be far worse than even the medium-term risk mitigation plan suggests."

She added that companies needed to be aware of the risk this presented and should be prepared.

Although Bluff lauded the drafter of the IRP for consulting with a broad range of stakeholders for the first time, she said she was concerned that the plan, which was thorough in many ways, might be underestimating the extent of the energy crisis.

"The wisest course of action would be for business to immediately start planning for its own power supply in the face of serious power shortages."

Bluff said that, according to the IRP, electricity prices would more than double over the next 20 years.

"The price increase will be quite steep until around 2014-15 - as high as 25% - in order to fund the capital outlay required for increasing SA's electricity generation capabilities," she said.

"After that, the increases are expected to taper somewhat."

Comments
  • Tony - 2011-01-12 13:40

    How do people get paid for writing what is already known, the next 2 years of increases have already been determined. Can't these guys go and do something constructive to generate growth, I no they must be consultants!!!

  • morpheus - 2011-01-12 13:54

    "Bluff said that, according to the IRP, electricity prices would more than double over the next 20 years." So does this mean that since it has already tripled it will go up much slower ? who believes their bull ?

  • HAB - 2011-01-12 14:00

    Can someone explain to a dof dude like me why we have such a "so-called" low inflation rate if our electricity rises 25% plus per annum. EVERY manufacturer and business uses electricity. Does rising electricity prices effect costs, even @ shopping malls, or do these concerns absorb the costs ? Sorry to be so dof, but my books dont balance if I add 3.6% or around there to budget for my personal expenses for the next year.AND please dont tell me.....so watt.

  • Jack - 2011-01-12 14:10

    Please get this guy to fix our government spending troubles. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/12/MN661H7E1T.DTL

  • Debo - 2011-01-12 14:34

    These guys are so bright. For my electricity price to double over the next 20 years, it must increase by 3.7% every year - I say bring it on. "The wisest course of action would be for business to immediately start planning for its own power supply". Sounds like they're in the business of supplying generators as well.

  • Freddy - 2011-01-25 17:29

    The economy will nosedive with this "blackmail" type of tariff increases. Look at the current price of crude oil. Any higher and the economy will nosedive too. Look what happend when the oil price reached $147 a barrel. Job losses will worsen.

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