South African Reserve Bank governor Lesetja Kganyago. Credit: MoneyWeb

The South African Reserve Bank governor Lesetja Kganyago says many South African businesses, and high-income households, could defect from the electricity grid if Eskom’s 2018/19 revenue application gets approval.

The governor’s concerns come just ahead of the National Energy Regulator of South Africa (Nersa) announcing its decision on the revenue application next Wednesday, 13 December 2017. Read more…

According to Mining Weekly, Kganyago warned that grid defection would not only be negative for Eskom’s financial viability, but could also undermine the sustainability of those municipalities that rely on electricity revenues.

The media highlighted that the impact could be particularly severe for those large metropolitan councils that were currently tapping the bond markets for funding.

Falling renewable energy costs

Kganyago indicated that commercial buildings and households might soon be in a position to defect, owing to the sharp decline in renewable energy costs.

Mining Weekly further reported that the Reserve Bank has been approached to defect, and was seriously considering, a self-generation solution for its office building in the Pretoria.

At a constant tariff, the hydrogen fuel-cell generation solution being proposed had a five-year payback and the payback period would be reduced to three years should Eskom prevail in its latest application, media stated.

 

Featured image: Stock