Johannesburg, South Africa — ESI-AFRICA.COM — 15 September 2011 – Despite the fact that South Africa is the only developing country in the world’s top 15 states in terms of electricity pricing, national power utility Eskom’s customer services head Tsholofelo Molefe claims its tariffs are still low.
Business Day reports that, according to Molefe’s presentation at an Agricultural Outlook Conference , South Africa ranked 15th in electricity pricing, at US$0.0855/kWh “’ US$0.0093 less than the US at number 14 and US$0.1115 less than Italy, which is the most expensive country. She was speaking to farmers and agribusiness representatives on the expected effect of electricity problems on the country’s agricultural sector over the next three years.
The sector is under pressure because of rising input costs and shrinking margins. Farmers have complained that electricity price increases have affected their sustainability and expansion plans.
The National Marketing Council reported in February that labour costs in agriculture had increased by between 64.4% and 102.4% because of rises in the price of water, electricity and fuel, and in toll road fees, over the past six years.
However, Molefe said South Africa’s power prices were competitive. “We still believe we are moving towards cost-effective tariffs after taking two decades of below- inflation tariff increases.”
She said that by 2030, up to 30% of power generation capacity in South Africa was likely to be provided by independent producers other than Eskom.
“It cost an average of 76c/kWh for non-Eskom generation (compared with 53c/kWh for Eskom), which indicated the real price of generating electricity,” she contended.