Here is what you should know about the massive electricity price hike

Here is what you should know about the massive electricity price hike Photos: Stock

Here is what you should know about the massive electricity price hike

National Energy Regulator of South Africa has agreed to an increase in electricity tariffs. Here is what you need to know.

Here is what you should know about the massive electricity price hike

Here is what you should know about the massive electricity price hike Photos: Stock

The National Energy Regulator of South Africa (Nersa) has agreed to increase electricity tariffs. 

HERE IS EVERYTHING YOU SHOULD KNOW ABOUT THE INCREASE

Here is what you need to know about the increase. 

  • (Nersa) has agreed to an 18.65% increase in electricity tariffs
  • The increase is effective from 1 April this year.
  • Eskom had applied for a 32% tariff increase for the 2023/24 year, which starts in April. 
  • In the same tariff application, the cash-strapped power utility applied for a further 22.52% increase for 2024/25. Nersa has granted Eskom a 12.74% tariff increase.

This comes after a court order required Nersa to make a final decision on the tariff by 24 December. 

THE INCREASE WAS APPROVED ON THURSDAY

However, the regulator was granted an extension to Thursday, 12 January, after its Electricity Subcommittee required more time to deliberate on 14 areas of concern.

Eskom motivated the significant tariff hikes on the back of rising diesel costs.

The power utility spent R15 billion on diesel in the 2021/22 financial year – some R9 billion more than what Nersa would allow it to recover through electricity tariffs for that year.

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THIS COMES AMID ESKOM IMPLEMENTING CONTINUOUS STAGE 6 LOAD SHEDDING

The massive tariff hikes were approved in the same week Eskom implemented continuous Stage 6 load shedding. 

According to reports, Eskom is hunting for diesel reserves to ease severe load shedding, but Nersa said the group is becoming too reliant on the fuel.

Eskom has been looking for more affordable diesel to power its open-cycle gas turbines (OCGTs) that kick in whenever the energy demand reaches a point unmanageable by the traditional coal stations.

Eskom has, however, reached a point where it is overly dependent on the open cycle gas turbines – and without diesel to fire them, widespread system failure is likely.

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ESKOM MOTIVATED THE INCREASE ON THE BACK OF RISING DIESEL COSTS

Late last year, Eskom confirmed that diesel tanks at its OCGTs run have physically run out and are empty.

According to reports, the power utility added that the tanks will not be replenished until 1 April 2023 as its spending overrun on diesel to date is twice the budget for the current financial year. It means that Eskom OCGTs will be unavailable until at least 1 April 2023.

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