Energy minister Mmamoloko Kubayi shocked the private power industry by announcing that all previously-negotiated power tariffs must be lowered to 77c per kWh, and has left companies reeling, reported the City Press.
The minister acceded to Eskom’s decision to only accept contracts where the cost of energy was below 77c per kWh, affecting 27 energy projects representing over R60 billion.
Mark Pickering, managing director of solar industry lobby group Sapvia, told the City Press there is no legal basis for the decision and attempts to reach out to the minister have failed due to her schedule.
“The minister drops this massive bombshell, then promptly leaves for China. After that, we are told, she is on leave for two weeks,” Pickering told the City Press.
Pickering said Eskom is clearly attempting to squash the renewable energy Independent Power Producer programme and the minister has bought Eskom’s story “hook, line, and sinker”.
The announcement of the tariff requirement follows recent news that many municipalities owe Eskom up to R12 billion, which has resulted in the provider threatening power cuts – due to unmet payment agreements.
Eskom has also been plagued by multiple scandals, including its executives being accused of corruption and mismanagement.