Featured Post

Ancient Teachings

Genesis 1, 28 says that we should "go forth and multiply, and replenish the earth." Not all Bibles have this "replenish the e...

Monday, September 9, 2013

High electricity prices and cross-subsidisation are hurting the poor. 2012-11-03

What's better? A sustainable economy with great low cost sustainable electricity supply and massive job creation leading to higher overall corporate and personal taxation? Or weak electricity supply with high costs, low security of supply, but where grants are given so that the poor can have electricity?

Potential 20% price increases from Eskom over the next 5 years and 9% per annum after that!!

"Eskom calculated that it needed 13% annual increases over the next five years to meet its own needs, and another 3% annually to support the introduction of Independent Power Producers (IPPs), bringing its request to 16% annual increases for the next five years. However, later on, it was explained that if further demands were made of Eskom after Kusile completion, with Eskom needing to supply 65%, its request would be 20% over the next five years, and 9% over the next five after that. These figures excluded municipal increases. In order to contain and create a safety net to manage the demand, within the assumed demand growth, Eskom had suggested an energy conservation scheme, coupled with a legislative framework if necessary. Block tariffs were to be revised to cushion the poor, using a simpler, two-block formula. Energy saving programmes such as solar energy, CFC bulbs and solar geysers, would continue." From Eskom's Multi Year Price Determination Document submitted to Parliament on 30th October 2012.

If you are paying R1000 per month now, you will be paying R3000 per month in 5 years time and R5000 per month in 10 years. And your bill has increased at least 150% over the past 5 years from perhaps R400 per month.
This is purely a tax for the rich (and the truly suffering middle class who are living off their bonds and credit and which is truly unsustainable) to pay for the poor's electricity, with Eskom taking its massive profitably cut in the middle.

Yet it is negative for the economy. So many more people could be employed; so much more business could be done; done much more corporate tax could be paid; so much more PAYE and UIF could be paid: IF ONLY WE HAD ELECTRICITY. And how do we get this electricity? By creating the competitive environment as envisaged in the Electricity White Paper (policy document) of 1998 and the Renewable Energy White Paper of 2003. These are great documents.

But the South African government is doing everything in its power to prevent competition and thus prevent Renewable Energy. For example, to install a rebated RE system in South Africa, one needs to follow 15 laws, 10 standards and fill in 10 documents. In the USA there are 2 laws, 3 standards and 1 document. In Germany the process takes 8 working days. In South Africa it can take months or even years as government delays and delays again.

And if you are watching the news and seeing strikes and unemployment rising in Italy, whilst Germany is the power house of Europe, then you can see the similarity with South Africa. Italy has a monopoly, Enel. South Africa has a monopoly, Eskom. Enel put huge rules in place that prevented RE adoption. Eskom put huge rules in place that prevents RE adoption. This myopia damaged the Italian economy in the long term. Does this need to happen in South Africa as well?

Rules (laws) are changed in 3 ways. Government changes them whilst people are asleep, except for Fracking!!! Big Business gets the rules changed using lobbying. Private people get the rules changed by mass action, peaceful or strikes. Unfortunately strikes damage the economy, but in some cases strikes have led to better working conditions and better economies.

The power is truly in our hands. But will we use it?

No comments:

Post a Comment