Eskom’s lower diesel bill could lead to better electricity prices, says electricity minister

South Africa has managed to keep the lights on for 208 consecutive days, marking a significant turnaround from last year’s frequent power cuts.

However, the Minister of Electricity and Energy Dr Kgosientsho Ramokgopa is not ready to celebrate just yet.

During Monday’s update on the country’s electricity situation, he said it was “an anomaly for us to celebrate the fact that there are 208 days of no load shedding,” adding that having a consistent power supply should be the standard.

“We want to get to a point where we don’t even count the number of days without load shedding because the expectation is that there shouldn’t be load shedding,” he said.

Load shedding: Eskom using less diesel

According to Ramokgopa, the improvement is particularly noteworthy when compared to 2023, which saw the worst power cuts in the country’s history.

He said power plants were performing better, with fewer unexpected breakdowns, and the amount of unavailable power decreased significantly.

The minister added that one of the biggest achievements was cutting down on expensive diesel usage to keep the lights on.

The country has spent R12 billion less on diesel compared to the same period last year, a reduction of 66%.

“There’s less and less reliance on diesel, which means that Eskom will make [fewer] tariff applications to the National Energy Regulator of South Africa (Nersa) because they’re becoming more and more efficient and the regulator and the legislation expect that the Eskom must be an efficient generator so we are getting to that stage.

“We are taking small steps but significant in the context of where we coming from so I thought it’s important to do that reality check,” said Ramokgopa.

This means a more reliable electricity supply for South African homes and businesses.

This substantial saving should eventually lead to better electricity prices for consumers, according to Ramokgopa.

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International investment in renewable energy

Ramokgopa also noted that South Africa’s renewable energy programme, which started in 2011, was gaining momentum.

The programme brings in private companies to build and operate solar and wind farms, adding much-needed power to the national grid.

So far, 95 projects are up and running, with more under construction.

Ramokgopa said the initiative garnered the attention of international companies, including Germany, France, Japan and Saudi Arabia.

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However, what’s particularly encouraging is that 82% of the total R272 billion investment has come from South African banks and financial institutions.

The cost of renewable energy has also dropped dramatically over the years.

Solar power is now 88% cheaper than when the programme started, while wind power costs have fallen by 70%.

“The benefits extend beyond just keeping the lights on. The renewable energy programme has created about 85 000 jobs during construction periods and has made significant strides in economic transformation.

“Black South Africans own 37.7% of these projects, while local communities have a 9% stake.

“The programme has also generated R76.6 billion in local spending and contributed R3.8 billion to community development projects,” Ramokgopa said.

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Power plans

Looking ahead, Ramokgopa outlined plans to make the programme even better.

These include speeding up approval processes, expanding into new areas and finding ways to bring more renewable energy projects online faster.

He said the government could set up dedicated solar and wind energy parks to generate power more efficiently.

“The measures we’ve been taking over some time, as codified in the energy action plan, are yielding the kind of results that are required,” Ramokgopa concluded.

While South Africa still faces energy challenges, Ramokgopa said these improvements showed that the country is moving in the right direction.

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Watch: Minister of Electricity and Energy Kgosientsho Ramokgopa on IPP programme