South Africa Power to Feel Long Term
by South Africa’s national energy regulator has the nersa to increase power prices, but negative impact is expected to be long term and shocking….
Eskom power price hike is sure to impact long-term cost positions of mining companies in South Africa, industry analysts said.
Rising power bill costs in South Africa will press operating margins and cash flow of these companies. They are challenged by higher than inflation power tariff increases during the next 3-4 years. South Africa’s National Energy Regulator of SA (NERSA) gave Eskom the green light to raise its tariffs.
24.8% for 2010-11
25.8% for 2011-12
25.9% for 2012-13
SMELL OF TROUBLE
South African trade unions have called members to protest against the latest tariff hikes as these are way above the average inflation, while about 25% of the population are officially unemployed.
The government will have to come up with shock therapy for the millions of needy families whose monthly income does not exceed ZAR 3,000 the equivalent of GBP 300.
Eskom is constantly interrupting television programs, including the infamous presidential state of the nation address, with its warnings that power levels are critical and that residents should turn of boilers and other electrical appliances.
In 2007-2008-2009 there were several major blackout in what the state referred to as “power shedding.”Residents of certain areas had power between say 9am-12 Noon, and then were switched of the grid to allow other areas to also enjoy the benefits 0of electricity for about three hours long.
Since the democratic change of regime there has been little or not investments or developments for new power generators and distributors.
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