Guiding consumers since 2009

Eskom: Who flipped the switch?

By Staff Writer
This is no April fool’s joke: Eskom has confirmed in a statement that there will be a price increase on April 1, 2015.

The power supplier confirmed that direct customers will see a 12.69% increase, and that individuals who are supplied by municipalities will pay 14.25% more for their power.

This is in line with what was approved by the National Energy Regulator of South Africa (Nersa) in November 2014.

Eskom added that their current financial situation does not allow them to buy short-term power from independent power suppliers.

Though, the problems with Eskom run back a lot further than many would suspect.  

The added costs appear never-ending. The parastatal’s power stations infrastructure is years behind schedule. Taxpayers also have to foot the bill for Eskom’s new nuclear ventures, and this has left a sour taste in many a South African’s mouth.

The South African Institute for Race Relations (IRR) released a report on the history, and nature of the problems Eskom is facing today, to try and shed some light on the dark Eskom has left us in.

The main problem

The report looks at the beginning of the Eskom, and what lead to the problems the power utility is having today.

The report highlighted that the early warning signs of a problem were there long ago, and that it could have been a lot worse, a lot sooner.

“The fundamental problem that is crippling us now is that we didn’t build power stations when it was glaringly obvious that we had to,” said the IRR.

The report went on to say that if South Africa’s economy had grown as much as was hoped, then we would have run out of electricity a long time ago.

“If we had increased growth to 6% a year, we would have run out of electricity in 2001,” highlighted the report.

However, South Africa has only managed a growth rate of about 3%, said the report. This effectively pushed the problem out by six years, with South Africa running out of power in 2007.

Is solar the answer?

South Africa enjoys a large amount of sun most of the year, which would beg the question: is solar not the answer to our energy problems?

According to the report, the answer is both yes, and no. The report highlights that solar energy has a range of wonderful small-scale applications.

These could be solar water heating; wind-powered pumps on Karoo farms; small solar or wind electricity generators powering remote schools, clinics and households; solar panels on the decks of yachts, providing limited but very useful power.

However, solar energy is useless, and very expensive when it comes to grid use. Grid electricity is the electricity that is sent to our homes, from Eskom.

“They [solar and wind power] are very expensive, hopelessly unreliable, usually unpredictable, and environmentally blighting,” said the report.

However, where solar power has failed other countries, like Germany, South Africa is a different matter.

“We have some of the world’s best solar conditions, especially in the Northern Cape, where high levels of solar energy reach the ground and cloud cover is limited. Even so, however, solar power for grid electricity would generally be far too expensive, subject to one exception,” said the report.

The report went on to explain that if we use concentrated solar power (CSP), which is effectively using the heat of the solar power, rather than converting it into power, it could work. (Read the full explanation on page 19, here.)

A fix for now?

“South Africa faces five years of blackouts. The only permanent solution is to build sufficient power stations to cope with our electricity demand, but it will take years for Medupi and Kusile to meet present demand let alone future demand,” said the report.

But, is there something that can be done to help alleviate the problem?

Those who produced the report don’t appear to believe that there are any quick fixes, or anything that can be done immediately. Because Eskom has the “keep the lights on” policy, it means that it is essentially not doing the required maintenance.

“It would probably be better if Eskom did all the necessary maintenance, which would mean more blackouts, and scheduled the blackouts so that consumers could plan for them. It might even make financial sense for Eskom on occasions not to run the gas turbines and accept even more blackouts,” said the report.

It was suggested in the report that Eskom be depoliticised, while allowing any company to compete against it for the generation and sale of electricity.

But with winter approaching and the electricity demand increasing, time will only tell if Eskom can fix the problem, and keep the lights on.

*At the time of publication Eskom had not responded with comment to questions posed by Justmoney. 

Recent Articles

Featured Raise a deposit for your house in 5 steps

If you’re a first-time home buyer, you could be lucky enough to be  approved for a 100% bond, but if you aren’t, a 10% deposit might be required. This  could be a daunting prospect.  However, a few financial tweaks to your lifestyle and spending habits could get you a foot in the property door and, once you’ve purchased a property, significantly reduce your long-term bond repayments.

Get personal with your finances – and tie the knot

As time passes, your financial products may not live up to your needs. Therefore, it’s important to take stock of what you’re paying for and adjust where necessary. We got in touch with financial advisers to find out how you can get your finances in order, and what you should do to ensure you’re financially stable.

Personal loan or business loan? The best way to finance your business

When starting your own business, you may have to rely on external funding. Perhaps you qualify for a personal loan, but would it be better to take out a business loan instead? We got in touch with a specialist to find out whether it’s best to take out a business loan or a personal loan to assist you with your ongoing business or start-up.

What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?


Cash Rewards up to 20% when you swipe your Absa Card at Spar

Price: Available on request
When: Daily
Where: Nationwide

The Royal Elephant Hotel Valentine's Day Special

Price: Available on request
When: 14 February 2020
Where: Centurion

Premier Hotels Vegan Dinner Special

Price: R225 per person
When: Monthly
Where: Nationwide