Energy policies undermine Eskom’s viability, says Lynne Brown
But the public enterprises minister says the power utility is expected to post a full-year profit despite the pressures it has faced
Government policies in the energy and transport sectors are undermining the financial viability of Eskom and Transnet, Public Enterprises Minister Lynne Brown said on Wednesday. However, despite the pressures, Eskom was projected to post a profit for the financial year to end-March 2017. The utility made a net profit of R4.6bn in the 2015-16 financial year, Brown said in a briefing to Parliament’s public enterprises committee. She said the policy of independent power producers of renewable energy had a potentially adverse effect on Eskom’s balance sheet especially in the current context of an electricity surplus. Eskom has excess capacity of 4000MW at present. "There is a risk of excess capacity; take or pay agreement commits government to long-term agreements even if the power is not required, as is the case currently. Excess capacity could lead to stranded assets, which would result in rising costs of energy, which will affect long-term growth," said Brown. "It is therefore critic...
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