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

More documents

Recommendations

Info

Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) 4.7 Benefits of price increases Page 94 of 144 The money South Africa spends on electricity generates significant socioeconomic returns. Eskom is not just about megawatts; it plays a key role in developing local industry, broadening and deepening the country‟s skills pool, creating local jobs and transforming the economy through black economic empowerment. Its capacity expansion programme is a catalyst for economic growth and will leave a legacy for the country in terms of skills, local supplier industries and development, particularly in the communities where the projects are located. As a state-owned company, Eskom has a responsibility to promote social and economic development. Eskom‟s goal is to provide a reliable source of electricity in a way that helps uplift all South Africans, especially those who are the most economically vulnerable. Its ability to do so effectively hinges on its own financial health, which in turn is greatly influenced by the revenue it recovers from electricity sales. In addition to providing the electricity that allows South African companies and people to go about their business, Eskom contributes to South Africa‟s economy and development in a number of ways: Contribution to GDP – Through its sales of electricity, Eskom‟s economic value added at group level reached R54.9 billion in the financial year 2011/12. On a local level, expenditure on its capacity expansion programme contributed 95% to the gross regional domestic product of Lephalale (the town closest to where Medupi is being built), 27% to that of Delmas (near the new Kusile power plant) and 7% to that of Ladysmith (near Ingula hydro power plant). Local supplier development – Eskom has awarded R75.2 billion in contracts on its new build programme (63% of the total) to domestic suppliers, stimulating the expansion of local supplier industries. Employment – Eskom directly employs approximately 43 000 people, but there are over 130 000 people employed in the Eskom „cloud‟, through contractors, sub-contractors, suppliers and service providers, and over 500 000 people who are supported, directly or indirectly, by Eskom. Skills development – Eskom recruits and trains thousands of learners to increase South Africa‟s pool of skilled workers. Almost 12 000 engineers,
Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) Page 95 of 144 technicians and artisans are currently being trained through learnerships, bursaries and other training programmes. Eskom spent more than R1 billion on training in 2011/12. Empowerment spending – Eskom awards more than 50% of its total expenditure to B-BBEE-compliant suppliers. Technological research and development – Eskom invests more than R150 million a year into research and development. Eskom constantly seeks ways to increase overall energy/electricity efficiency across different sectors of the economy. Electrification – Eskom has provided access to electricity to more than 4.2 million households since the electrification programme began in the early 1990s, and continues to connect more than 150 000 new customers to the grid each year. Finally, as noted earlier, electricity price increases are a preferable alternative to taxes for funding Eskom‟s revenue requirement. 4.8 Conclusion The negative effects of electricity price increases in the short term must be weighed against the benefits of having an adequate, reliable electricity supply to enable long-term economic growth. Without electricity, South Africa‟s economy will stagnate. Ultimately, Eskom‟s financial sustainability – and its ability to meet the country‟s electricity needs – is linked to that of South Africa.
Page 1 and 2:
Part 1 Revenue Application: Multi-Y
Page 3 and 4:
Overview of Multi-Year Price Determ
Page 5 and 6:
EXECUTIVE SUMMARY Introduction Over
Page 7 and 8:
Page 9 and 10:
ESKOM PROFILE Overview of Multi-Yea
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
1.4.2 Independent power producers O
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Price path: Funding: Other: Overvie
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
2 THE MYPD PROCESS Key points Overv
Page 39 and 40:
Electricity Pricing Policy Overview
Page 41 and 42:
Accomplishments during MYPD 2 Overv
Page 43 and 44: Base case application Overview of M
Page 45 and 46: Overview of Multi-Year Price Determ
Page 59 and 60: Environmental levy Overview of Mult
Page 63 and 64: Table 17: IPP projects (costs and e
Page 67 and 68: Cost of cover Overview of Multi-Yea
Page 69 and 70: Operating efficiencies target Overv
Page 73 and 74: 3.5.2 Carbon tax Overview of Multi-
Page 75 and 76: Table 34: Eskom’s funding over th
Page 77 and 78: Weaknesses: Overview of Multi-Year
Page 83 and 84: Phasing in price increases over fiv
Page 93: Figure 9: Current cross-subsidies i
Page 115 and 116: INVESTMENT GRADE RATIOS CAPACITY AN
Page 119 and 120: INVESTMENT GRADE RATIOS CAPACITY AN
Page 127 and 128: Simplify tariff structures Modify s
Page 137 and 138: 7 CONCLUSION Overview of Multi-Year
Page 143 and 144: Transmission Overview of Multi-Year
show all

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?