Coal suppliers & IPPs influence Eskom’s request for tariff increase

Eskom focused on coal and independent power producers (IPPs) in its presentation at the National Energy Regulator of South Africa’s (NERSA) public hearings in Durban, on Thursday.

A series of public hearings are being held across the country, allowing the power utility to explain reasons for its Regulatory Clearing Account (RCA) application for year 5 of the third multi-year price determination (MYPD3) as well as the fourth multi-year price determination (MYPD4) application. The latest presentations talked to the cost related issues associated with coal and IPPs.

“The environment in which Eskom is operating is quite dynamic. Whilst Eskom for instance is regulated, the coal market is not regulated and we have to compete with the export market for Eskom grade coal. At the same time deal with the growth of the disruptive renewable energy sector in the low demand growth era,” said acting senior general manager for primary energy, Dan Mashigo.

Mashigo added: “It was clarified that the reality is that the cost of mining coal consistently increases above inflation and more and more influence of export price on the domestic market is being experienced.”

Source: ESI Africa

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