Question NW2292 to the Minister of Public Enterprises
03 December 2021 - NW2292
Buthelezi, Mr EM to ask the Minister of Public Enterprises
(1) Whether, with reference to the decision by the National Energy Regulator of South Africa to increase the electricity tariff by 15,3%, he has found that this decision will enable Eskom to avoid loadshedding, destabilisation of the national grid and defaulting on its borrowing costs; if not, what is the position in this regard; if so, what are the relevant details; (2) whether Eskom’s position can change on renewal producers, in light of Eskom’s position that providing generation facilities to renewable projects, comes at a cost of coal miners, their communities and potentially the economy as a whole; if not, what is the position in this regard; if so, what are the relevant details; (3) with reference to Eskom announcing its unbundling process, will this affect the new build program?
Reply:
According to the information received from ESKOM
1. With respect, the two issues are not linked.
The increased tariff contributes to the revenue of Eskom and its financial performance. Eskom has managed to meet its debt commitments and not defaulted on its debt commitments. There are various factors that contribute to this including the equity support that Eskom has received from Government. The increase in the tariff will improve cash from operations and will assist in strengthening Eskom’s financial position.
The load shedding minimization and impact on the national grid is not related to the price increase. Various other issues, from a technical operational point, need to be considered in this regard.
2. Eskom will work together with the private sector and IPPs to rollout renewables. Our plans and strategies are not mutually exclusive. An important part of our strategy is to ensure we deal with the socio-economic impacts of transition from coal. We are working on repowering and repurposing options, as well as plans to drive localisation, in collaboration with other industry players. This is meant to spur economic growth and grow local manufacture and industrialisation.
3. The unbundling process will not affect the completion of the new build programme.
- At Medupi, following the Commercial Operation (CO) of the last unit (Unit 1) on 31 July 2021, focus is now on completion of the remaining issues on the balance of plant (outside plant), including but not limited to the ash dump facility, ash silos, coal stockyards and building structures with their associated systems.
- At Kusile, the three remaining units (Units 4, 5 and 6) are under construction, with the last unit (Unit 6) targeted for completion in May 2024.