Watch the video: Dr. Kgosientsho Ramokgopa updates members of media on the implementation of Energy Action Plan
- Dr. Kgosientsho Ramokgopa, the Minister of Energy and Electricity, yesterday updated members of the media from Lethabo Power Station on the implementation of the Energy Action Plan (EAP) as Eskom marks 200 days of suspended load shedding in South Africa.
Also speaking at the briefing, Eskom CEO Dan Marokane said the idea was to pursue a “step change” in Eskom’s renewables generation by adding just over 2GW. He made the same announcement in June 2024, expressing that Eskom wants to build and own just over 2 GW of renewable energy projects alongside existing coal fired power stations. Read more
Marokane did not mention where the funding would come from to build the projects. To date, Eskom has issued tenders for a 75MW solar farm at the Lethabo Power Station and a 19.4MW solar project at their Sere Wind Farm.
Eskom has unsustainable debt of over R423 billion. Following broad consultation, government has provide a debt-relief arrangement to Eskom covering R254 billion of its debt (about R168 billion in capital and R86 billion in interest) over the next three years, with strict conditions to safeguard public money. This will takes the form of advances of R78 billion in 2023/24, R66 billion in 2024/25 and R40 billion in 2025/26. The money is not intended to fund new build generation capacity.
These amounts represent Eskom’s full debt settlement requirement over the next three years. They will be financed through the R66 billion medium- term expenditure framework (MTEF) baseline provision announced in the 2019 Budget, and R118billion in additional borrowing over the MTEF period. Additionally, in 2025/26, government will directly take over up to R70 billion of Eskom’s loan portfolio.
Eskom recently made a 36.15% tariff price increase application to the country’s national energy regulator, NERSA.
Eskom’s revenue application amounts to R446bn for the 2025/26 financial year, R495bn for the 2026/27 financial year and R537bn for the 2027/28 financial year. This means the proposed average price increases for Eskom direct customers are 36.15% (1 April 2025 to 31 March 2026), 11.81% (1 April 2026 to 31 March 2027) and 9.10% (1 April 2027 to 31 March 2028).
Eskom’s MYPD6 application will be processed in terms of the fourth Multi-Year Price Determination (MYPD4) Methodology. The main drivers of Eskom’s revenue application are primary energy, operating costs, independent power producers (IPPs), international purchases and depreciation – and not for new build generation capacity.
Ultimately, the decision rests with Treasury. Treasury will decide whether Marokane’s plan to added 2GW renewable energy to Eskom’s fleet of coal power stations will be implemented.
Author: Bryan Groenendaal
