Eskom 19.9% tariff hike will boost Renewable energy market
By : Antonio -
We are moving towards an era where every household will be fitted with solar energy.
Referring to the article in the Fin24, Renewable energy market will be boosted in 2018.
If the National Energy Regulator (Nersa) grants Eskom the 19.9% tariff hike it has applied for, it will simply enhance the utility death spiral it faces where users move to renewable energy alternatives.
This was the message from the Cape Chamber of Commerce and Industry at Nersa’s public hearings on the Eskom tariff hike application.
Figures from Eskom’s own annual reports show the utility’s average selling price has increased from 18 cents a unit in 2007 to 89c in 2017. The new increases would result in an average selling price of R1.07 a unit. This means that Eskom tariffs have increased nearly fivefold in 10 years, according to the chamber.
“Many electricity users – both for domestic and business use – will opt for alternatives like renewable energy. The decline in Eskom sales requires a simple understanding of the demand curve. When electricity prices go up, demand decreases, because the domestic user is already under immense financial pressure,” Sid Peimer, executive director of the chamber, explained to the Nersa panel.
To avoid the so-called utility death spiral, Peimer said Eskom should cut expenses, no matter how painful that process will be, including leading to job losses.