Eskom would be sustainable with yearly tariff rises of 25%

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Drunkard #1

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South Africa's State-owned power utility Eskom could lop a further ten percentage points annually off its application for tariff increases of 35% a year between April 1, 2010, and March 31, 2013, and still emerge as a sustainable organisation able to fund its operations and its capital programmes, new research by consultancy Genesis Analytics asserts.

The analysis, which has been completed on behalf of several mining and industrial clients, including the Chemical and Allied Industries Association and AngloGold Ashanti, would be presented to the National Energy Regulator of South Africa (Nersa), which is scheduled to host public hearings into Eskom's tariff application between January 11 and January 22.

Genesis Analytics chairman Stephan Malherbe told Engineering News Online on Friday that the outcome of a 25% a year price path, which could be "frontloaded if necessary", would be an electricity price of 62c/kWh, rather than the 81c/kWh (by March 2013) outlined by Eskom. Nevertheless, Eskom would remain "sustainable" and would also be earning an acceptable rate of return by the end of the period.
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I wonder if their study made sufficient allowances for bribes and kickbacks. Why should a power station in SA cost double what it would cost to build in the States?
 
Eish, so if you pay R500 a month for electricity, in 4 years time you will pay R1220! That's gonna hurt inflation bigtime.
 
Drunkard #1 said:
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I wonder if their study made sufficient allowances for bribes and kickbacks. Why should a power station in SA cost double what it would cost to build in the States?
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Err...I'm guessing between proudly SA lazy local arses and imported talent. Seriously though, we can't afford 10% annual increases let alone 35%. The writing was already on the wall way back in 2003. One more reason to get outa here.
 
Get rid of uber high salaries and bonuses for lack of accomplishing anything whatsoever and /repeat calculation.
 
Praeses said:
Get rid of uber high salaries and bonuses for lack of accomplishing anything whatsoever and /repeat calculation.
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Eskom's total employee benefit bill was R15.17 billion in 2009. Let's say executive remuneration is 30% of that (which would be utterly ridiculous, but I couldn't find real figures). That implies that executives were paid R4.55 billion in 2009.

This R4.55 billion is 1.18% of the R385 billion that Eskom is going to spend building new power stations. So even if we reduce executive salaries to R0 then we would still have to pony up for huge increases. Hell, we could pay the entire staff of Eskom (about 35 000 people) nothing for four years and it will still only reduce the total bill for the new build program by 15.8%.
 
Just a quick question, would increasing the electricity price translate into a better financial statement?

Would that then translate into fat management bonuses?

If it does, then once again the stupid fat cats get the big bonus because of their own incompetence :/
 
Considering that the consumer is only using 9% of the total electricity production, I don't see why we should be footing the bill.
 
Imo it should be raised the same ammount as was inflation that year.

Only drawback is bafoons can not then line their pockets as senior management. :rolleyes:
 
Rkootknir said:
Eskom's total employee benefit bill was R15.17 billion in 2009. Let's say executive remuneration is 30% of that (which would be utterly ridiculous, but I couldn't find real figures). That implies that executives were paid R4.55 billion in 2009.

This R4.55 billion is 1.18% of the R385 billion that Eskom is going to spend building new power stations. So even if we reduce executive salaries to R0 then we would still have to pony up for huge increases. Hell, we could pay the entire staff of Eskom (about 35 000 people) nothing for four years and it will still only reduce the total bill for the new build program by 15.8%.
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I understand your point, but just remember, they aren't even cutting back on anything such as the salaries to even TRY to reduce the inflation. Also remember that the Gov supports Eskom financially for the power plant projects, and Eskom also makes a profit from current electricity sales.

If they showed that they even CARE whether the nation needs to pay inflated prices (for a fault they didn't cause), it would make a difference. Instead, they leave salaries as high as the blue sky and just don't care about the 1% we could've paid less.
 
Why do state owned enterprises have to make profits in any case?
Shouldn't they be operating like a non-profit, and only to the advantage of the citizens of this country?
 
Rkootknir said:
R385 billion that Eskom is going to spend building new power stations.
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I see no logical reasoning why that sort of money, shouldnt rather go towards encouraging the growth of small wind turbine power generators in the 1 - 5 kw range for domestic use.
Farmers with land not suited to grazing or development should be encouraged to plant these turbines, drawing off what they need for consumption, and feeding the rest back into the national grid for some form of remuneration.
Country towns could easily reduce their consumption and also contribute depending on how many turbines are installed.
There are a number of products available in the small turbine range:
http://www.allwindenergy.com/5000W_Wind_Generator.htm
http://www.hywindgenerator.com/1KW-wind-turbine-generator.asp

This will not only help reduce energy requirements by the state, but also help encourage alternate energy development, and be a leap towards greener energy development and consumption in S.A.
Added to that is the reduction of infrastructure needed to supply energy to outlying rural areas.
 
I think the money we are giving paying off people who keep having kids would be better of subsidising Eskom.
 
Nanfeishen said:
I see no logical reasoning why that sort of money, shouldnt rather go towards encouraging the growth of small wind turbine power generators in the 1 - 5 kw range for domestic use.
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As far as I know wind power is in the pipeline for Eskom. However, more in the scale of 2MW per wind turbine. However, what SA needs at the moment is base load capacity and wind power just can't provide that - wind's highest capacity factor is in the rance from 20% - 25% IIRC.

If you spread the turbines around the country that will obviously increase - it shouldn't be windstill across the entire country for long periods of time, but you will never be able to get to the 90%-95% average capacity factor of a coal, nuclear or hydro power station.
 
I think you are stuffed. They have let the grid get so bad, that either you pay up or go without electricity. Whoever you ask to sort this out is going to want mega-bucks. They have the country by the short-and-curlies
 
Kickbacks, anyone?

Another article on why Eskom doesn't need the tariff increases it's asking for.

The problem is simple. Kusile costs too much. The projected costs are wrong. In general, coal-fired plants cost about $1 600 for each kilowatt of installed capacity. This should put Kusile at about R58-billion. But it is, in fact, being costed at more than double this - at $3 800 for each kilowatt of installed capacity.
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For $3 800/kWh the Russians would build us a nuclear plant! It's about time the public starts asking, "Where's the money going?"
 
Drunkard #1 said:
Another article on why Eskom doesn't need the tariff increases it's asking for.



For $3 800/kWh the Russians would build us a nuclear plant! It's about time the public starts asking, "Where's the money going?"
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We all know where it's going...into some previously disadvantaged person's extremely black-hole-deep pockets. :sick:
 
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