The latest Energy Market Survey by NUS Conslulting shows how South Africa’s energy prices compare to other global markets.
According to the report, South Africa is still riding the middle wave of 18 countries surveyed for electricity and gas prices.
Between 2014 and 2015, South Africa’s power prices increased 8.2% to 8.46 US cents per kilo-Watt hour (kWh) – the second biggest jump, behind Belgium’s 9.9% increase.
This is likely to be the last single-digit increase for the country, NUS said, as a 12.69% jump in prices has been approved in the coming year, with more increases likely to follow.
According to NUS’ data – which is based on fixed, 12-month contract prices starting 1 June 2015 for the supply of 1,000 kW with 450 hours use- South Africa now has the 10th most expensive power prices out of 18 countries – up from 15th in 2014.
Italy (R2.19 per kWh), Germany (R2.12 per kWh) and the UK (R1.98 per kWh) remain the top three most expensive – while Sweden (R0.75 per kWh) remains the cheapest.
Highest global electricity prices 2015
|#||Country||Electricity price (USD c/kWh)||Electricity price (ZAR c/kWh)||Change from 2014 (%)|
All conversions done at USD 1 = ZAR 13.96
It must be noted that the increase measured by NUS does not include other increases often implemented by resellers – such as municipalities.
Speaking to BusinessTech, NUS warned against using averages and average tariff increases as reported by Nersa to determine true costs and plan forward budgets, as each customer profile would be different.
“It is imperative for individual households and businesses to fully investigate and understand their energy billing, in order to make the most effective cost-saving decisions,” the group said.
More price increases coming
During the course of the year, Eskom applied to increase electricity tariffs by a further 12.61%, but this was rejected by South African energy regulator, Nersa.
“Price increases for 2015/2016 are still possible, and if Eskom gets its way, South Africa could find itself ranking in the top half of the 18 countries surveyed,” NUS said.
“This trend is not good news for South Africa’s mining, manufacturing and commercial industries. Rising power prices could present a slippery slope for South Africa.”
“Further price increases coupled with unemployment and economic hardship could dampen the country’s ability to stay competitive globally,” the energy consulting firm said.
Currently, Eskom’s system reserve capacity stands at approximately 8% – internationally the norm for power companies is to have a 15% margin in excess capacity.
This lead to Eskom re-initiating its load shedding program since late 2014, which caused widespread disruptions throughout 2015.
For the past two months, the power utility has managed to largely avoid load shedding; however the national grid remains in a state of constant vulnerability, and will remain so until new power generation programs are completed over the next three years.