SA: Expect to pay 14% to 20% more for power
Thématique :
sud afrique
By Olivia Spadavecchia, Engineering News, 25/01/2008
Another element of the power crisis currently plaguing South Africa was the reality that there would be further significant increases in electricity prices, Minister of Public Enterprises Alec Erwin said at a media briefing at the Union Buildings on Friday.
Erwin warned that after the latest confirmed increase of 14,2%, which would be implemented in April, South Africa could expect price hikes of between about 14% and 20% over the next few years.
He explained that the tariff increases, which are determined by the National Energy Regulator of South Africa, would be a permanent change.
The Minister said that the increases would be effected in a way that would soften the blow for the country's poor, essentially through the burden falling on those who could afford to pay, with larger consumers sheltering smaller ones.
"Despite the electricity price hikes, South Africa will remain the most competitive large energy system in the world," Erwin declared.
Supporting documents provided by government stated that the gap between South Africa and the next cheapest country, Canada, in terms of electricity prices, had increased to 74% in 2007, from 30% in 2006.
Current pricing was said to be one half the replacement value of a power plant, and therefore tariffs would need to increase substantially to fund the new capacity being built.
The current approved tariff by the energy regulator is 22,1c/kWh whereas the long-term average cost was significantly higher. Government noted that electricity prices would have to move in the direction of the long-term cost to be cost-reflective.
Another element of the power crisis currently plaguing South Africa was the reality that there would be further significant increases in electricity prices, Minister of Public Enterprises Alec Erwin said at a media briefing at the Union Buildings on Friday.
Erwin warned that after the latest confirmed increase of 14,2%, which would be implemented in April, South Africa could expect price hikes of between about 14% and 20% over the next few years.
He explained that the tariff increases, which are determined by the National Energy Regulator of South Africa, would be a permanent change.
The Minister said that the increases would be effected in a way that would soften the blow for the country's poor, essentially through the burden falling on those who could afford to pay, with larger consumers sheltering smaller ones.
"Despite the electricity price hikes, South Africa will remain the most competitive large energy system in the world," Erwin declared.
Supporting documents provided by government stated that the gap between South Africa and the next cheapest country, Canada, in terms of electricity prices, had increased to 74% in 2007, from 30% in 2006.
Current pricing was said to be one half the replacement value of a power plant, and therefore tariffs would need to increase substantially to fund the new capacity being built.
The current approved tariff by the energy regulator is 22,1c/kWh whereas the long-term average cost was significantly higher. Government noted that electricity prices would have to move in the direction of the long-term cost to be cost-reflective.
