Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
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additional build projects that are required or might be allocated to Eskom in terms of IRP
2010.
Assumption 2: IPPs to be included
The application includes IPPs, which have already been contracted through short-term
energy purchases and the Medium Term Power Purchase Programme (MTPPP), the DoE‟s
peaker plants of 1020MW comprising of two open cycle gas turbine (OCGT) plants planned
to be constructed at Dedisa (near Port Elizabeth) and Avon (near Durban), and the
renewable energy IPP bid programme, which caters for a total of 3 725MW of renewable
capacity, pursuant to the determination by the Minister of Energy is also included. The
assumptions for the renewable costs and energy were based on information provided by
Department of Energy (DoE).
Assumption 3: Single-digit increases for primary energy costs
Primary energy increases will decline to single-digit percentages over the MYPD 3 period as
major coal producers support the stakeholder pact.
A stakeholder pact to ensure a sustainable electricity industry
Eskom believes South Africa needs a stakeholder pact to curb electricity demand and limit
increases in primary energy costs. Such a pact, as advocated by the President and the
Minister of Public Enterprises, would help Eskom to contain operating costs and remain a
sustainable entity over the long term. The pact would include:
A clear path to cost-reflective prices.
Measures such as the ECS to reduce electricity demand, particularly from large
industrial customers.
Single-digit increases in the price of coal over the medium term.
Such a pact would effectively ask South Africa to partner with Eskom and contribute to
achieving the goals of economic growth through ensuring security of supply. Implementing
such an agreement would require extensive public consultation and negotiation with major
customers.