Public Enterprises Minister Malusi Gigaba (left) and President Jacob Zuma.

Delivering his State of the Nation Address on Thursday, Zuma said he has asked electricity supply company Eskom on how price increases may be reduced over the next few years.

“I have asked Eskom to seek options on how the price increase requirement may be reduced over the next few years, in support of economic growth and job creation and give me proposals for consideration,” he said.

Zuma said the country needed an electricity price path that would ensure that Eskom and the industry remain financially viable and sustainable, but which remains affordable especially for the poor.

“However to achieve sustainability, a pact will be required with all South Africans – including business, labour, municipalities, communities and all customers and suppliers,” he said.

Gigaba said: “The anticipated reduction in the electricity would be funded out of the balance sheet of Eskom, but it would contingent on the people of SA using and saving electricity and on industry, especially the coal mining companies making certain over a period of five years the supply of coal to Eskom. We have done a lot of back ground work on this.”

Lance Greyling, Independent Democrats shadow energy minister said: “They (government and Eskom) have recognized that the kind of price path they have put the country on is clearly unsustainable. We are now in the process of building Medupi and Kusile and they are way over budget and they are delayed. This is a major problem we are now going to be facing.”

Greyling said that Zuma never talked about those trade-offs.

“When he talked about infrastructure build he never talked about the problems we are having with Medupi and Kusile. He never talked about the detail and the trade offs,” he said.

Gigaba also said: “The first unit of Medupi would be only commission in 2013 and we will be in an extremely tight place until then. Bring back on to the base load 10% of the electricity that they consume.”

Western Cape Premier and leader of the Democratic Alliance Helen Zille said: “Asking Eskom to lower price rises is going to a very crucial thing, but then we are going to have to free up that monopoly by create more competition for Eskom. Every household should generate its own electricity.”

Zuma said that everybody must save electricity for the next two years and all should play a part to avoid load shedding.

“To increase energy capacity we will continue searching for renewable energy sources, especially solar electricity and biofuels as we implement the Green Economy Accord with economic stakeholders,” Zuma said.

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