In this article, we look at the rise in electricity costs, the immediate outlook into the future and the role of Renewable Energy.
Early in November, Eskom submitted an application to the Energy Regulator (NERSA) to retrieve unrecovered revenue for the 2013/2014 financial year from the Regulatory Clearing Account (RCA). The application was done to recover R22.8 billion applicable to this period.
If approved, this could potentially mean an increase in tariffs of up to 17% from the 1st of April 2016.
Eskom further indicates that there will be another submission to address the shortfall on the 2014/2015 year. This means that the impact of higher increases, will be felt beyond next years increase.
The percentage NERSA approved was 8% per year until the 2017/2018 financial year, however, NERSA already deviated from this by granting a 12.69% for the 2015/2016 year. This was on the merit of recovering R7.8 billion in costs.
As a quick comparison, if a R7.8 billion recovery led to a 12.69% increase, then it would be fair to make the assumption that a R22.8 billion recovery would lead to a greater increase than the 12.69% granted for the current financial year ending March 2016? Read More