Energy

South Africa, known for its diverse energy mix, is currently undergoing significant changes in its energy pricing. The National Energy Regulator of South Africa (Nersa) has authorized the national power utility, Eskom, to raise electricity prices by 19% in 2023-2024. This decision comes after Eskom's request for a more than 32% increase in tariffs, citing higher fuel costs and procurement from independent power producers (IPPs).

Eskom's Tariff Increase

Eskom, under pressure to improve its energy availability factor to above 65%, has implemented power cuts on more than 200 days in 2022. The tariff increase includes revenues that the High Court of South Africa found to be due to Eskom, including the phased recovery of a ZAR69bn (US$4.1bn) equity injection. This decision covers the second and third years of the fifth multiyear price determination (MYPD5).

Renewable Energy in South Africa

While the country grapples with these changes, it's worth noting that South Africa holds significant potential for renewable energy. Primary sources of renewable energy in the country include solar, wind, hydroelectric, and biomass. Due to the country's geographic location, it receives large amounts of solar energy. Wind energy is also a major potential source of renewable energy, with Cape Town implementing multiple wind farms.

Fuel Prices

In addition to electricity, fuel prices are also a significant part of the energy cost in South Africa. The Minister of Mineral Resources and Energy, Mr Gwede Mantashe, announced the adjustment of fuel prices based on current local and international factors with effect from the 3rd of January 2024. The fuel prices for January 2024 were adjusted as follows:
  • Petrol (93 ULP & LRP): Sixty-two cents per litre (62.00 c/l) decrease.
  • Petrol (95 ULP & LRP): Seventy-six cents per litre (76.00 c/l) decrease.
  • Diesel (0.05% sulphur): One hundred and eighteen point three two cents per litre (118.32 c/l) decrease.
  • Diesel (0.005% sulphur): One hundred and twenty-six point three two cents per litre (126.32 c/l) decrease.

Conclusion

In conclusion, the energy price in South Africa in 2024 is influenced by a variety of factors, including decisions by the National Energy Regulator, the performance of the national power utility Eskom, and the potential of renewable energy sources. While there are increases in electricity tariffs, there are also decreases in fuel prices. As South Africa continues to diversify its energy mix and explore renewable energy sources, it's likely that the energy landscape will continue to evolve.

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