SA Needs To Invest In Renewable Energy Despite Eskom Price Increases

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If South Africa’s power utility has their way, the cost of electricity in the country will leave many of its citizens in the dark. 


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If South Africa’s power utility has their way, the cost of electricity in the country will leave many of its citizens in the dark.

Eskom has approached the National Energy Regulator of South Africa (NERSA) with plans to increase tariffs on the purchase of electricity by 20.5%. The cost of electricity will impact everybody and will also impact the price of goods and services as power is an inflationary pressure.

Energy expert Clyde Mallinson says it seems as if South Africa has reached an impossible situation where the increase to prices need to be implemented.

He attributed policies and regulations at the power utility over the last five to ten years have led to the current position.

Mallinson said, “there's been a lack of decisive policy making to move us to take advantage of the disruption that's taking place globally in the energy supply industry and that disruption is the rapid reduction in cost in renewable energy and storage and in South Africa we have some of the best resources to take advantage of this disruption”.

He believes that National Treasury should put an equity injection to reduce the debt on Eskom loans. He adds that if the correct policies are introduced after this, the state could get around R400 billion that it needs over the next ten years.

Malinson says his idea is not like the bailouts the power utility has received in the past. He says his solution would get Eskom out of its debt and would allow South Africa to build a new energy supply sector. His solution includes 10 million South Africans investing in green bonds which will fund the construction of a new energy fleet.

“That new fleet would then be owned basically by the citizens of South Africa and it would be Eskom's job, together with competent private sector, companies and operation and management companies to run that fleet to ensure that we get good reliable electricity and that those who have invested in those green bonds get a good return on the investment” concluded Malinson.

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