Eskom and the balance of power

People will soon leave Eskom’s grid, not because of load-shedding, but because it is becoming too expensive. And that is not necessarily a good thing, says Alwie Lester, the Western Cape premier’s energy adviser who heads the province’s energy council. Municipalities are part of it.

The council was established by the provincial cabinet to focus on energy resilience. In the medium term, says Lester, it was to examine more sustainable sources of energy for the province. Tariff increases have also been part of the council’s agenda. “We are not in support of these high tariffs,” he says.

These range from 36.5% to almost 44%. The National Energy Regulator of South Africa recently approved the consultative process for the 2025/2026, 2026/2027 and 2027/2028 financial years. Public hearings on the increases begin next month.

Lester says it’s not only a problem of affordability. “It’s going to incentivise people to move off the grid because ... it’s just far too expensive.

“We don’t want to encourage that because that big shift ... creates a problem for those who can’t afford to move off the grid, which typically are the poorest of the poor.”

Lester says that over the past 10 years, the cumulative increase has been more than 500%.

“If all of the Western Cape, for instance, went off Eskom energy completely and we had our own generation in the province, we would still have a balancing problem in the rest of the country.”

He says the energy availability factor is higher than it’s been in the past two years and it has been sustainable over the past few months at an average of about 68% availability.

“We must also just understand that, though this is great, this is actually what’s expected when you pay these tariffs.

“One of the things that has changed significantly is that it [Eskom] seems to have done critical maintenance on some of the generation plants, but it’s managed to be a sustainable solution. I think it’s having the right effect.”

He says the Western Cape’s energy council programme is rooted in renewable energy. “The technology we’re quite agnostic to. Whether it’s wind, solar or hydro, it really isn’t important. The critical thing for us is that we are not going to support any fossil fuel development.”

Lester emphasises that if the country doesn’t move towards greener energy, there will be more implications in the next few years.

“The higher your fossil-fuel energy use, the higher the [carbon] tax is going to be. At this point, close to 85% of our energy in the country is fossil-fuel based.

“What we’re trying to do is also to protect the economies of the provinces, not just the Western Cape,” he says. “If you’re in a position where you can have a hybrid solution, that’s ideal. You can have five [sources of energy] plus a portion that still sits with Eskom, then we’ve reached a very good point.

“We don’t want to create instability in the national network and that will happen if we take 100% away; the cost of 100% renewable is quite expensive,” says Lester.

He says the City of Cape Town leads the way in renewable energy. It also has the required funding. He says the province has taken lessons from the city to guide other municipalities.

“There are municipalities where we find that they’re quite progressive in their thinking and then we have other municipalities that are far more conservative, and it’s normally influenced by the leadership that you have in that municipality.”

On South Africa’s only nuclear power station, he says he is confident in the safety measures implemented at Koeberg. “We’ve not had a nuclear incident in the 40-year life of Koeberg. Even when Eskom was going through very difficult times in terms of budgets and funding, the one thing it didn’t skimp on was Koeberg. The national nuclear regulator is very clear, if you don’t perform these activities, they will withdraw your licence. They’re very strict [about] how you can do things.”

Lester says because of huge input costs, SMMEs will have some tough decisions to make in the near future. “They are going to have to make decisions of [finding] alternative energy sources, or closing shop.

“Eskom has made applications for double-digit figures and I don’t see that changing. Eskom applied for a 44% maximum [tariff increase] now. I think that we are probably going to find ourselves somewhere between an 18% and 20% [approved increase].”