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Business warned of power tariff spike

Jan 12 2011 12:54 I-Net Bridge

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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."

energy crisis  |  businesses  |  electricity supply  |  power
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