Big problem with Eskom's electricity price hikes


Jul 29, 2021
Big Eskom electricity price mistake

Eskom is basing its substantial price increases on the rising cost of producing electricity, but the notion of cost-reflective tariffs is an economic fallacy.

In March 2023, the National Energy Regulator of South Africa (Nersa) approved tariff increases of 18.65% for 2023/24 and 12.74% for 2024/25.
The issues faced by Eskom in South Africa, such as inefficiencies, mismanagement, corruption, and the challenge of setting appropriate electricity tariffs, are not unique. Several other countries have faced similar challenges with their state-owned utility companies or in their energy sectors. Here are a few examples:

1. Venezuela: The country's state-owned electricity company, Corpoelec, has faced issues with corruption, lack of investment, and poor management. These factors have contributed to frequent blackouts and electricity shortages.

2. Nigeria: The Nigerian power sector has long been plagued by corruption, underinvestment, and inefficiencies. Despite efforts to privatize and reform the sector, problems with electricity supply and financial sustainability persist.

3. India: While India has made significant progress in its energy sector, it still faces challenges with some state-owned power companies. Issues include financial distress due to unpaid bills, power theft, and inefficiencies in distribution.

4. Brazil: Brazil has faced challenges with its state-controlled electricity companies. Issues such as political interference, corruption, and operational inefficiencies have affected the sector's performance.

5. Greece: The Public Power Corporation (PPC), Greece's largest electric utility, has faced financial struggles, which have been attributed to a combination of mismanagement, a bloated workforce, and market conditions.

6. Lebanon: The state-owned electricity company in Lebanon, Electricité du Liban, has been emblematic of the broader issues in the country's public sector, including corruption, lack of investment, and political interference, leading to frequent power outages.

These examples illustrate that the challenges faced by Eskom are not unique and are indicative of broader issues that can affect state-owned utilities in various countries. The common themes include corruption, inefficiencies, financial mismanagement, and the difficulty of balancing tariff setting with operational sustainability.

Chatgpt 4.
Countries that used to face these issues and how they resolved them. There are many other examples of countries that overcame the issues Eskom is facing. Here are but 3 examples.

Chile: Chile was one of the first countries to privatize its national electricity company in the early 1980s. The country implemented a framework that separated generation, transmission, and distribution, and introduced competition. These changes led to increased investment, improved efficiency, and reduced government subsidies.

New Zealand: New Zealand undertook significant reforms in its electricity sector in the 1980s and 1990s, including unbundling its state-owned monopoly into separate generation, transmission, and distribution companies and introducing market mechanisms. These reforms have been credited with increasing efficiency and promoting renewable energy.

United Kingdom: In the 1980s and 1990s, the UK privatized its previously state-owned electricity and gas companies. This move, along with the introduction of regulatory frameworks and market competition, transformed the sector, leading to increased efficiency, investment, and consumer choice.
Countries that used to face these issues and how they resolved them. There are many other examples of countries that overcame the issues Eskom is facing. Here are but 3 examples.
So what this is telling us is that SA is 30+ years behind the curve?

I mean the concept of separating distribution, generation and transmission is a good start but I think we'll completely fluff the part that matters and just end up with more expenses without the benefits.
This is not a problem, the ANC will simply take money elsewhere if people stop buying from Eskom. Remember to pay your "grid availability" levy even if have gone 100% solar.
This is not a problem, the ANC will simply take money elsewhere if people stop buying from Eskom. Remember to pay your "grid availability" levy even if have gone 100% solar.
I loathe that levy, but the fact is you will not easily be 100% solar. It can be done, but most are not.
it will be back at Treasury’s door in three to four years with a begging bowl, asking for more money
So like every single year since the 1920s then…

Eskom should just make money off connecting solar plants to the grid and we just need a energy market where prices are dynamic and we can sign up with private electricity companies just like in many other countries. Lower prices for all
The more they charge the more people that is still currently paying will be incentivized to become self sufficient. It will become more and more viable to go solar. Our entire office building that we moved out of late last year pretty much ran on solar alone during the day. Only things that did not work during load shedding was the aircon...fck that was terrible.

But ja....go ahead, increase prices, chase paying customers away and soon you will be left with only non paying people that bliksems you stukkend when you try and disconnect them.
Pretty much the problem with all of our services, including the size of the Cabinet. No attention at all seems to given to efficiencies or benchmarking against similar global services. Just recovering costs is going to keep making services more inefficient and expensive.
Price of solar and batteries has decreased a fair bit in last 5 years . The people that can afford it most likely have it and now with reduced cost many will put it on their bond or finance with more loan type things . Once you gone solar you will rely less and less on eskom and municipal revenue from electricity will decrease and so it will continue
At the rate solar is being installed after a few years Eskom will mainly have only "free" customers.
The ANC is not concerned or capable of planning for the future.

The only thing they care about is how much they can enrich themselves by whatever means possible no matter the effect on the rest of the country or it's people.

The ones thinking they will remain in power will find other ways to continue looting once Eskom becomes yet another ANC success story - the ones that know their time is running out are all increasing their looting to as much as possible to get what they can while they can.

Either way the tax / eskom payers are going to suffer more still before the ANC is ousted.

Once we have a different government there will be trillions required to rebuild everything the ANC destroyed so even then the tax payers will still be paying for the failure that is the ANC for generations to come.

The ANC has ****ed us all!