Polity.org.za Frost and Sullivan 15 November 2012.
“In the light of the recent (postponed) financial close of the window one renewable energy projects, the question has been raised again as to South Africa’s future energy security issues. Fortunately, South Africa has local access to large coal deposits, providing the backbone for coal fired power stations on which the majority of industry has been built. However, with the recent 16% tariff hike announcements (over 5 years) to help strengthen Eskom’s financial position, and the level of push-back from stakeholders, alarm bells are ringing.
The question is seldom asked as to whether these 16% increases are not maybe too low. Eskom is currently in the position where the last coal fired power station was built more than 20 years ago, which, by international standards, makes a large majority of Eskom’s power stations due for decommissioning. Despite two new power stations being built (adding 4,800 MW each) there will, at some point in the not too distant future, be a scenario where we are minus roughly 10,000 – 11,000 MW with the decommissioning of older power plants where continuous refurbishment may be too costly…
(Editor’s note: IRP_2010_2030 As gazetted 6 May 2011 did take into account decommissioning up to 2030 which amounts to about 11 000 MW and the MYPD3 submission hopefully does take this into account. However, the argument to keep electricity tariffs cost-reflective with a bit of smoothing, does make sense to me.)