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SA electricity compared to other countries

Dec 12 2014 21:15
Emma Thelwell

Johannesburg - More than a century after the light bulb was invented, South Africans are being plunged into darkness amid rolling blackouts.

Even with a cash injection from the government and permission to keep hiking electricity tariffs, Eskom said its financial health is “under strain”.

A spokesperson for Eskom told Fin24: “Eskom needs to keep the lights on and this has a cost. For historical reasons, electricity is currently charged at below cost-reflective levels and is not sustainable.”

But having already stomached price rises, many households suffering blackouts across the country have little sympathy as they face a further 12.69% rise in electricity prices next year - double the rate of inflation.

Almost 40 000 people have joined a Facebook protest page promising to “bring power back to the people, one household at a time”.

So how do South African electricity prices and performance measure up? Fin24 finds out.

READ: No power cuts until January - Eskom

Cheaper in Nigeria

Across the globe, residential electricity in Africa is among the most expensive in the world, according to the World Bank.

This is mainly down to the cost of the technology needed to generate power, and the small
scale of most African power generation systems.

African households spend up to 150% more on power than those in Latin America, Eastern
Europe or East Asia.

In sub-Saharan Africa meanwhile, the average price of power is double that of other developing regions.

That said, the range is huge - from the cheapest in Zambia at 2.9 cents per 100 kw/hour, to the most expensive in Chad - at 30 cents per 100 kw/hour. And South Africa ranks as the fourth cheapest, after Zambia, Madagascar and Nigeria.

These findings, included in a World Bank power tariff report in 2011, are the most heavily relied on as they take into account all charges - variable and fixed, and are based on a specific level of energy use.

READ: Power to be tight until March

Affordable for most

In terms of affordability, the World Bank finds that South Africans are also more able to afford electricity than neighbouring sub-Saharan Africans.

Data shows 100% of South Africans who pay for electricity can currently afford 50 kw/hour at
the average tariff without spending more than 5% of their household budget.

Though the Bank points out that this doesn’t take into account the spending power of households who do not have electricity. Since 1994, South Africans’ access to electricity has jumped from around 30% of the country to 70%. For most sub-Saharan African nations, access remains below 30%.

(Source: AICD Power Taris Database/World Bank 2011)

Generating game

Despite the current crisis, South Africa has the capacity to generate vast amounts more power than the region as a whole.

We can generate 10 times as much power as Nigeria for example, despite having a far smaller
population, according to the report.

But Africa overall delivers a tiny amount of electricity compared to the rest of the world.
The World Bank states that the whole sub-Saharan region of 48 countries - with a population of 800 million - generates roughly the same amount of power as Spain - which has a population of 45 million.

Efficiency fails

Though South Africa generates more power at an affordable level than other sub-Saharan
nations, it falls behind the average rating for efficiency.

Power outages and rising costs have pushed many individuals and companies alike to buy their
own generators.

South African firms without generators lose $1 140 (about RR13 000) an hour, according to the World Bank, while those with generators lose a far smaller $66 an hour.

South Africa scores 72% for efficiency, significantly below the regional average of 82%, World Bank statistics show.

What’s more, even though South Africa has put up prices, Eskom has not been able to fully
cover the costs of producing our electricity - it covers 84% of its costs.

Western Cape Premier Helen Zille pointed this out last week: “Dramatically increased electricity prices for other consumers have not compensated for the so-called ‘industrial savings’”.

She went further, claiming that the cost of electricity “only encourages people to use even less”, which threatens to pull down Eskom’s revenues further.

Indeed, the World Bank report states that the high charges consumers must pay to connect to
an electricity network are a “major obstacle” to lighting up sub-Saharan Africa.

So rather than getting better, our access to electricity could get worse.

ALSO READ: Govt's 5-point plan for Eskom

eskom  |  load shedding  |  business  |  sa economy  |  energy


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