\t\t\t<\/p>\n
Eskom\u2019s request for a 16% tariff increase from the National Energy Regulator of SA (Nersa) was a necessity, said Public Enterprises Minister Malusi Gigaba on Tuesday.<\/p>\n
Addressing a New Age \/ SABC breakfast briefing, Gigaba said although the power parastatal wished it could have kept its request to a single-digit figure, the double-digit tariff hike request was necessitated by the tough conditions prevailing in the economy.<\/p>\n
\u201cThe economic situation is biting, but we must balance that with future needs [with] our ability to ensure security of supply of electricity. This 16% [request] could have been \u2026 higher had Eskom continued to pursue a three-year Multi-Year Price Determination (MYPD).<\/p>\n
\u201cWe decided to stretch this over five years and said that in the fifth year, we wish to move towards single-digit figures. This is to ensure that we alleviate the burden of having to pay a high figure,\u201d explained Gigaba.<\/p>\n
Last month, the power parastatal asked Nersa for a total 16% tariff hike, with 13% of the hike going for Eskom\u2019s own needs and the other 3% going to support the introduction of independent power producers (IPPs) under a proposed five-year MYPD.<\/p>\n
The current three-year MYPD 2 comes to an end in March 2013. The power parastatal is proposing a five-year determination for MYPD 3, running from 1 April 2013 to 31 March 2018.<\/p>\n
The increase represents a total price increase from the current 61 cents per kilowatt hour in 2012\/13 to 128 cents per kilowatt hour in 2017\/18. This would include targeted savings in operating and primary energy costs.<\/p>\n
The request to the regulator, Gigaba said, did not consider the country\u2019s Integrated Resource Plan (IRP) 2010-2030, which states the country\u2019s intention to add 9 600 megawatts of nuclear energy as well as renewables to the country\u2019s energy mix by 2030. The IRP is South Africa\u2019s 20-year plan towards the balancing of the production of electricity and consumption.<\/p>\n
\u201cWe have not included the IRP2; the funding model must still be determined by government,\u201d he said.<\/p>\n
He called on South Africans to \u201cbear the collective pain\u201d of the tariffs, adding that the poor would continue to be shielded against the high tariffs. He called on municipalities to consider the poor when charging electricity tariffs.<\/p>\n
Gigaba said coal would continue to play a role in the production of electricity in South Africa, given that the country was coal rich and exported coal to other countries.<\/p>\n
Last week, the Energy Department held a signing ceremony with the preferred bidders of the first window of its Renewable Energy Independent Power Producer Programme (REIPPP). This was the first step in bringing renewable energy on a large scale into the country\u2019s energy mix. \u2013 SAnews.gov.za<\/p>\n
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