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High power prices or power cuts, says Brian Molefe

| Economic factors

South Africans can choose between the pain of higher electricity prices to pay for Eskom’s diesel, or power cuts and damage to the economy.

Acting Eskom CEO Brian Molefe argued on Wednesday that the pain of people paying more was far less than the damage power cuts would cause to the economy.

“If we don’t have the diesel, then we go into load shedding sooner and it will be more severe,” he said, following a briefing on the state of the country’s power system.

The power utility was spending about R1.5bn a month on diesel to power its open cycle gas turbines, and needed billions more to keep them running.

Included in its latest request to the National Energy Regulator of South Africa for a 24.7% electricity tariff hike was the need for R10.9bn to buy diesel for the gas turbines. The diesel purchases made up 6.4% of the proposed 24.7% increase.

Running the open-cycle gas turbines added 2 000 MW to the grid and without it the country would move into stage 2 load shedding, he said.

The 24.7% also included a 4.7% clawback.

“It’s money that should have been given to us in the previous year,” he said. He criticised analysts for their “unwelcome utterances in the media” in not pointing this out. 

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