Page 9 - Energize October 2022

INDUSTRY NEWS

• Increases in independent power • IPP cost increase of 9.05% (due to further energy being sourced from IPPs
producer (IPP) costs – mainly due to including emergency procurement)
increased emergency IPP procurement
• Slight increase in sales volumes The price increase for FY2025 being applied for is 9,74% with IPPs contributing 5,39% to this.
• Further reduction in average energy In addition, proposals are made for the recovery of part of the incorrectly
availability factor for Eskom power deducted equity support from FY 2020 to 2022 (under MYPD4) as well as the
stations of 59% regulatory account balance decision for FY 2020. These refer to prudent and
efficient expenditure being recovered four to six years later.
The following assumptions have The Supreme Court of Appeal has ordered that the remaining R59-billion of the
not changed from the original incorrectly deducted equity be added to the allowable revenue decisions for each
application year, starting on 1 April 2023.
• Operating costs R15-billion each in FY 2024 to FY 2026 and R14-billion in FY 2027: the proposal
• Depreciation is to allow these recovered amounts to be targeted towards the return on assets for
• Value of regulatory asset base the transmission and distribution network businesses. It also allows for the further
• Capital expenditure migration towards cost reflectivity for the Eskom network businesses. Focus can
then be shifted to the generation business in subsequent years.
The price increase being applied Eskom submitted proposals to Nersa to restructure tariffs during August 2022.
for is 32.02% for FY 2024, and the The translation from the allowable revenue to tariffs which would better reflect the
decision will be implemented on unbundled costs and fixed vs. variable costs is included. This ensures that customers
01 April 2023 are more aligned to the actual costs they impose on the system.
The key contributors include: This also addresses the key aspect of certain customers using the electricity
• Depreciation of 10.67% - due mainly system as a battery and back-up. Eskom says that it is critical that in making strides
to an incorrect regulatory asset base to cost reflective revenue levels, we don’t miss the opportunity to make similar step
valuation by NERSA in its FY2023 its changes in FY2023 relating to the tariff structures and unbundling.
decision, (substantially in the generation
business), More information on Eskom’s update of the FY 2024 and FY 2025 revenue
• Eskom primary energy of 7.85% (of application can be found on Eskom’s website: https://www.eskom.co.za/wp-
which the majority, 6.09% is due only to content/uploads/2022/09/14082022MYPD5Update_FY2425Addendum.pdf
increase in diesel and fuel oil prices as
well as volume increase in OCGT fuel) Send your comments to rogerl@nowmedia.co.za

Renewable energy jobs hit 12,7 million globally

Information from the International Renewable Energy Agency

New report confirms growth in renewable jobs despite multiple crises and calls for targeted industrial
strategies to create stable supply chains and ‘good jobs’

orldwide employment in along with labour and other costs. Solar energy was found to be the fastest-growing
renewable energy reached sector. In 2021 it provided 4,3 million jobs, more than a third of the current global
W12,7 million last year, a jump workforce in renewable energy.
of 700 000 new jobs in one year, despite The new report was published by the International Renewable Energy Agency
the lingering effects of Covid-19 and the (IRENA) in collaboration with the International Labour Organization (ILO), during the
growing energy crisis, according to a new Global Clean Energy Action Forum in Pittsburgh, USA.
report. With rising concerns about climate change, Covid-19 recovery and supply chain
Renewable Energy and Jobs: Annual disruption, national interest is growing in localising supply chains and creating jobs
Review 2022 identifies domestic market at home. The report describes how strong domestic markets are key to anchoring a
size as a major factor influencing drive toward clean energy industrialisation. Developing renewable technology export
employment generation in renewables, capabilities is also dependent on this, it adds.

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