[ad_1]
Andre de Ruyter, CEO of Eskom (DEON RATH)
- Load shedding is expected to have been “significantly reduced” but not completely eliminated by September 2021.
- Eskom expects the legislative changes to allow a “less antagonistic approach” to resolve tariff-related issues with energy price regulator Nersa.
- Lower sales volumes have led to a 1% annual decline for almost the last 10 years, exacerbating Eskom’s financial woes.
The effects of Eskom’s maintenance program, which is expected to alleviate the risk of loss of load, will be felt in April next year as the power company works to ensure the long-term sustainability of its infrastructure, its director said Thursday. executive, Andre de Ruyter.
“We anticipate that by April next year we will see the first benefits of improved maintenance,” De Ruyter said, adding that by September 2021, the power company will have significantly reduced the risk of loss of load.
“By September next year, we will have significantly reduced, but not eliminated, the risk of cargo shedding,” he added.
De Ruyter, who took over as Eskom’s CEO in January, spoke at Joburg Indaba, a gathering of business leaders and investors from the mining industry. He acknowledged that power outages had been a drag on SA’s economic recovery and that a stable power supply was critical to investor confidence.
Executives at the two-day event, which ended on Thursday, discussed the importance of an uninterrupted power supply for the mining sector, one of South Africa’s largest electricity users.
Eskom has been battling intermittent periods of loss of charge for 13 years and is currently implementing its latest five-point turnaround strategy, which focuses on ensuring stable power while improving the company’s bleak finances. The utility is struggling with a debt of about R480 billion and has not made enough profit from the sale of electricity to cover the interest on the debt.
De Ruyter said Eskom’s revenue challenges are the result of lower sales volumes of 1% per year for the last 10 years, as well as rate increases that do not reflect costs granted by the South African National Energy Regulator. (Nersa).
This week, the energy regulator received permission to appeal a higher court ruling that had overturned its 2019 decision on Eskom’s tariffs, likely to thwart the energy company’s revenue-raising efforts. This came after the Gauteng High Court in Johannesburg reviewed and annulled a decision by Nersa to deduct a capital injection of R69 billion from the government as part of the energy company’s allowed income for three years: 2019/20 , 2020/21 and 2021/22.
The initial ruling had ordered Nersa to restore the full amount of Eskom’s revenue over the next three years, which would have substantially increased the company’s revenue.
In his speech Thursday, De Ruyter said Eskom did not want to fight in court with the regulator and that he expected legislative changes to allow a “less antagonistic approach to resolving our differences.”
“Since we appeal to rates that reflect costs, we also have an obligation to manage our costs in an appropriate and disciplined manner. Therefore, we do not ask for rates to subsidize our inefficiencies, we ask for rates that reflect costs reasonably incurred.
