Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 27 2012 11:49
The country's 200 000-odd Tupperware agents are angry about the counterfeit products being sold as the real McCoy.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
Johannesburg - South Africa's power utility Eskom is keen to have private players participate in its expansion projects, but tariffs would still need to rise substantially to encourage that investment, an official said.
The utility is battling to raise parts of the R385bn it needs to pay for new plants to power Africa's biggest economy and said it would rely on an increase in tariffs, borrowings and government loans for support.
Eskom has been criticised for fuelling inflation fears by raising tariffs by as much as 31.3% this year and 27% last year. The utility has another application pending with the regulator, asking for rises of up to 146%.
"We are in such an urgent need of money - we would be delighted with anybody who comes in with a chequebook. (But) I can't see why someone would come into a business that is selling its product at currently between half and two-thirds of the cost," Eskom chair Bobby Godsell told an industry gathering on Friday.
Due to a government policy of underpricing power to attract industry into the country, South Africa has been cushioned by one of the world's cheapest tariffs, with a kilowatt hour produced by the utility costing on average 33 cents.
Godsell said independent power producers (IPPs) have so far proposed to generate electricity at a cost of between 75-120 cents, without taking the cost of distribution and transmission into account.
"We have the cheapest electricity in the world, but we just happen today to be out of stock," he said.
Eskom's new projects will add some 18 000 megwatts (MW) to the country's capacity of around 40 000 MW.
Godsell said the utility plans to expand capacity by a total of 52 000 MW to meet rising demand, but that figure may change depending on how growth in demand pans out.
Eskom has been rationing power since early 2008 when the country's grid nearly collapsed, forcing mines and smelters to shut for days and costing South Africa billions of dollars.
Godsell said the country needs to invest in diversifying the energy mix to nuclear and solar away from coal, now supplying some 90% of the country's power.
"Could we aspire to (produce) 10 000 MW from renewables? We should," he said.
- Reuters