Eskom asked to limit hikes

President Jacob Zuma has asked Eskom to find ways to reduce its electricity price increases over the next few years.

In his State of the Nation address yesterday, Zuma acknowledged concerns expressed by business and communities about high electricity costs.

"I have asked Eskom to find ways to reduce its price increase expectations in the next few years, to support economic growth and job creation, and to give me proposals for consideration," Zuma said.

Zuma said the country needed an electricity price path that would ensure Eskom remained financially viable and sustainable, but which ensured power remained affordable, especially for the poor.

"To achieve sustainability, a pact will be required with all South Africans - business, labour, municipalities, communities and all customers and suppliers," he said.

Zuma said everyone needed to save electricity for the next two years, until the Medupi and Kusile power plants were up and running, and that all must play their part to avoid load-shedding.

"To increase energy capacity we will continue searching for renewable energy sources, especially solar electricity and biofuels, as we implement the Green Economy Accord with economic stakeholders," Zuma said.

But, Zuma's promise of reduced electricity tariffs comes as Eskom CEO Brian Dames has warned - not for the first time - that load-shedding might become a feature in South Africa again.

South Africa's energy problems have resulted in severe blackouts that, in 2008, cost the country an estimated R50-billion.

As early as last year, Dames warned of the risks associated with keeping the lights on across the country.

In an interview then with the Financial Mail, Dames cautioned about a peak shortfall in 2012.

"The energy gap for 2012 is quite frightening. Are the mechanisms that are in place enough to avoid catastrophe?

"Even if we were to use all the mechanisms we currently have, there will still be an energy gap," Dames said.

The reasons for Eskom's dwindling power supply are historical - ageing power plants that increasingly need maintenance, new plants that are in the construction phase and a lack of foresight regarding infrastructure development at Eskom. - I-Net Bridge and staff reporter