South African electricity tariffs are set to increase on average by 12.69% on 1 April 2015 for consumers who purchase directly from the state-owned power utility, Eskom.


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Eskom is in trouble – with seemingly nowhere to turn. The utility is in a funding crisis but government will no longer foot the bill.

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I've been wondering what all the fuss is about re our president's chateau? After all it is "only" R250 million. But our two new power stations, Kusile and Medupi were quoted at R79 billion each, and are currently R50 billion over budget each. R100 billion is 400 Nkandlas!

And Eskom have said that these new power stations won't even include the environmental requirements as per their Environmental Impact Assessments. So the costs are even higher. And South African's have already paid for this electricity with higher electricity prices, and therefore every other price increase in South Africa over the past 6 years! Everything we do depends on electricity. If electricity prices go up then so do water, transport, food, inflation; everything!

According to Eskom's Fact Sheet on Medupi published in 2010, the first 800 MW should have been online in June 2012, with units coming on stream at 8 month intervals. This means that 2,400 MW should already be on-stream and we should be half way at Medupi. 2.4 GW is about 6% of South Africa's current electricity capacity, therefore Medupi should grow SA's GDP by 6%. This equates to R210 billion; and assuming Kusile was also on target, with its first unit coming on stream at the end of 2013, we could assume the additional GDP would equate to R280 billion! Our economy needs to grow faster to create jobs. With 8.5 million employed people in South Africa this R280 billion of additional turnover might already equate to an additional 680,000 permanent jobs.

South Africa is growing slowly because our government cannot deliver on its electricity promises, and it has cleverly diverted the public's attention away from 400 Nkandlas, to one particular Nkandla. A modern economy relies on electricity to grow. If this money had been spent on people power, i.e. on decentralised renewable energy grids backed up with micro-hydro, localised battery and sewerage to gas systems, local coal power stations, local water supply and purification, about 2 million houses would already be being made into power stations thus freeing up this electricity to be used for industry, thus growing the economy even faster, with at least 35,000 people employed in the alternative energy system build, which would last at least another 20 years. So about 715,000 more people would already have jobs in this alternative scenario.

Why hasn't the public protector investigated this waste of public resources? And why isn't alternative people power really being investigated? We have 1 month till our democratic elections. Who can answer these questions? Which party truly stands with the people, with a decentralised people powered electricity system powering South Africa?

Yours faithfully,

David Lipschitz

ANOTHER failed attempt to restructure Eskom will make it more difficult for private investors to build independent power plants (IPPs), and South Africa will face years of constrained electricity supply.

It has become apparent that the proposed Independent System and Market Operator Bill will not be voted on by Parliament anytime soon. The bill sought to remove electricity market functions — such as planning, procurement and contracting of new power — from Eskom and place these under an independent state-owned utility, subject to determinations by the energy minister.

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Eskom chairperson Zola Tsotsi reports that the utility’s board is pursuing an open process to select a successor to CEO Brian Dames, who made the surprise announcement in December that he will be stepping down on March 31, 2014.

In an interview with Engineering News Online Tsotsi also confirmed that Public Enterprises MinisterMalusi Gigaba, who has the prerogative to appoint the CEO, has mandated the board to oversee the selection process, which would be facilitated by executive search agencies. Gigaba would still have the final word on the selection and his spokesperson Mayihlome Tshwete confirmed that a Cabinet endorsement would also be sought.

A board committee, led by Tsotsi and comprising the chairpersons of the various board subcommittees, had been assembled and would both select and brief an executive search agency in the coming few days. Internal and external candidates will be considered and Tsotsi also confirmed that the search agencies would be mandated to propose South African and foreign candidates.

Both Tsotsi and Gigaba had indicated their preference for a handover period from Dames to the new CEO. But Tsotsi acknowledged that the timeframe was such that such a handover might not be possible. He also acknowledged that it might not even be possible to appoint a new CEO by the time Dames is scheduled to leave.


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