Concerns over powership electricity prices

Bradley Prior

Bradley Prior

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Concerns over powership electricity prices

While Eskom is currently slated to pay low tariffs for electricity from Karpowership's three vessels, this could fluctuate wildly over the course of the next 20 years - potentially resulting in a massive rise in the cost of electricity from these units.
 
E-tolls here we go again, 20 year contract eh?
 
Solitude said:
We all know that nobody in charge will listen to the experts or to advice of any kind.
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Correct. We will never have full transparency. So those in power will make decisions based on 'ANC first' as per the standard prevailing political protocol.
 
Seems like a classic case of "listen, we know the future and we planned and signed deals on that knowledge".
 
The current tariffs are anything but low as well. It's only low by consumer standards but then you have to add fuel costs as well. It's a lot more than wholesale tariffs or what Eskom pays to generate power.
 
Who is paying the docking fees for the ships?

That won't be cheap either.
 
Maybe i am miscalculating here, however it looks to me that based on the R218 billion cost, we will be paying R1.04 per Kwh over the next 20 years. Please let me know if i made a mistake in my calculations. 1200MW is 1200000Kwh. This is supplied 24/7. So there are 8760 hours in the year. This means 10,512,000,000 Kwh is produced per year. So 20 years come to 210,240,000,000Kwh. Divide 218 billion through the kwh and you come to R1.0369/Kwh. Obviously the R218B can change however just based on the values presented it seems somewhat palatable.

Did i miss something in my calculation?
 
While Eskom is currently slated to pay low tariffs
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Those tariffs are not low, as stated by Burny, they're at R1.04/kWh, Eskom sells at ~R1.11, so less than 7c for transmission and administration, they're going to permanently make a loss on it.
Burny1 said:
Maybe i am miscalculating here, however it looks to me that based on the R218 billion cost, we will be paying R1.04 per Kwh over the next 20 years. Please let me know if i made a mistake in my calculations. 1200MW is 1200000Kwh. This is supplied 24/7. So there are 8760 hours in the year. This means 10,512,000,000 Kwh is produced per year. So 20 years come to 210,240,000,000Kwh. Divide 218 billion through the kwh and you come to R1.0369/Kwh. Obviously the R218B can change however just based on the values presented it seems somewhat palatable.

Did i miss something in my calculation?
Click to expand...
Yes:
This is according economist Mike Schussler, who explained to the City Press that the price of electricity from these ships will change in accordance with the international price of liquefied natural gas and the rand/dollar exchange rate.
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Currently liquefied gas is still pretty "cheap", it's definitely going to rise, especially with Mozambique issues where RSA thought they would get cheap gas from. Rand is definitely also going to drop in that time compared to the dollar, price is not going to be at least partially tied to the economy in SA (e.g. someone working on a local power plant will earn and spend locally, so can usually get away with lower raises or at least only matching RSA inflation).

Renewables are also quite a bit cheaper, are still trending towards dropping in price, plus things like batteries are set to drop quite a bit in price over the next decade, especially as the entire world is trying to move to electric cars, which will lead to more "smart" grids that are decentralized.
 
Johnatan56 said:
Those tariffs are not low, as stated by Burny, they're at R1.04/kWh, Eskom sells at ~R1.11, so less than 7c for transmission and administration, they're going to permanently make a loss on it.

Yes:

Currently liquefied gas is still pretty "cheap", it's definitely going to rise, especially with Mozambique issues where RSA thought they would get cheap gas from. Rand is definitely also going to drop in that time compared to the dollar, price is not going to be at least partially tied to the economy in SA (e.g. someone working on a local power plant will earn and spend locally, so can usually get away with lower raises or at least only matching RSA inflation).

Renewables are also quite a bit cheaper, are still trending towards dropping in price, plus things like batteries are set to drop quite a bit in price over the next decade, especially as the entire world is trying to move to electric cars, which will lead to more "smart" grids that are decentralized.
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I assume you are referring to a wholesale price as we are paying R2.21/kwh and with the new increase this will go to R2.54/kwh.
 
Burny1 said:
I assume you are referring to a wholesale price as we are paying R2.21/kwh and with the new increase this will go to R2.54/kwh.
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A majority of the electricity sold is at wholesale or slightly above it, be it to large consumers like mines or indirectly to residential via municipalities.
That above R2 you're paying is probably to a municipality that uses it to subsidize a host of other things.
 
Bradley Prior said:
Concerns over powership electricity prices

While Eskom is currently slated to pay low tariffs for electricity from Karpowership's three vessels, this could fluctuate wildly over the course of the next 20 years - potentially resulting in a massive rise in the cost of electricity from these units.
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Lol..... Where are those peanuts who said this is a great idea and will be cheaper in the long run. This deal is mos gonna have no room for corruption.
 
Burny1 said:
Maybe i am miscalculating here, however it looks to me that based on the R218 billion cost, we will be paying R1.04 per Kwh over the next 20 years. Please let me know if i made a mistake in my calculations. 1200MW is 1200000Kwh. This is supplied 24/7. So there are 8760 hours in the year. This means 10,512,000,000 Kwh is produced per year. So 20 years come to 210,240,000,000Kwh. Divide 218 billion through the kwh and you come to R1.0369/Kwh. Obviously the R218B can change however just based on the values presented it seems somewhat palatable.

Did i miss something in my calculation?
Click to expand...

Nobody said the powerships will run 24/7. In fact it would be much better if they did not. Unfortunately we have no idea what the actual scenario will be.
 
Burny1 said:
Maybe i am miscalculating here, however it looks to me that based on the R218 billion cost, we will be paying R1.04 per Kwh over the next 20 years. Please let me know if i made a mistake in my calculations. 1200MW is 1200000Kwh. This is supplied 24/7. So there are 8760 hours in the year. This means 10,512,000,000 Kwh is produced per year. So 20 years come to 210,240,000,000Kwh. Divide 218 billion through the kwh and you come to R1.0369/Kwh. Obviously the R218B can change however just based on the values presented it seems somewhat palatable.

Did i miss something in my calculation?
Click to expand...
Yes, corruption.
 
damned if you do, damned if you don’t. Most of the remedial actions these days look like this.. vaccines, power.. if they didn’t we’d blame for inaction too.

if they went renewable with guaranteed purchase agreements .. we’d do the same and also question vs base load etc. just saying.
 
Swa said:
The current tariffs are anything but low as well. It's only low by consumer standards but then you have to add fuel costs as well. It's a lot more than wholesale tariffs or what Eskom pays to generate power.
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YOU FORGOT THE PRICE OF CORRUPTION!!!
 
krycor said:
damned if you do, damned if you don’t. Most of the remedial actions these days look like this.. vaccines, power.. if they didn’t we’d blame for inaction too.

if they went renewable with guaranteed purchase agreements .. we’d do the same and also question vs base load etc. just saying.
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Thing is the ANC does not have any idea how to do anything. Quite literally the only good thing they could ever do is step aside!
 
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