SA is continuing its slide down the rankings of countries with cheap electricity, and the next round of increases will affect the competitiveness of key industries.
After losing its place to Canada as the cheapest power provider last year, SA dropped further in international energy consultant NUS Consulting Group’s survey of 16 major electricity markets, released yesterday.
SA ranked 11th and Canada retained its position as the country with the cheapest power.
With a 23,1 percent increase this year, SA had the second highest "one-year percentage change", NUS found. Australia had the highest increase in prices, with 27,8 percent.
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Eskom is on the verge of making its submission to the National Energy Regulator of SA for the next round of annual price increases. It wants electricity prices to rise from 50,3c/kWh to 97,51c/kWh by 2017.
Anton Eberhard, a member of the National Planning Commission and professor at the University of Cape Town’s Graduate School of Business, said electricity prices were allowed to fall below cost-effective levels in the 1990s and early 2000s, but the long-term viability of the electricity industry depended on price rises.
"However, there are concerns about the extent and rate of current price increases," said Prof Eberhard. "Electricity is no longer cheap and, if projected price increases materialise, SA will certainly not be internationally competitive in terms of energy costs. Already we see the impact on some of the minerals beneficiation industries."
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