SE Briefing 18: Eskom Costs and Tariffs
September 20, 2009
Press Release: Earthlife Africa Welcomes End to Rio Tinto Smelter
October 16, 2009

Published by earthlife at

SENSE 57 Sept 2009

Number 57: Sept. 2009
Welcome! SENSE is a service of the Sustainable Energy and Climate Change Project (SECCP) of Earthlife Africa Johannesburg (ELA Jhb).

SENSE is a regular publication, edited by Tristen Taylor. We welcome any feedback and submissions. Also, let us know if you wish to get more information from ELA Jhb, or know someone else who should be receiving SENSE. Please note that the material in SENSE does not necessarily reflect the positions or policies of Earthlife Africa Jhb and/or the SECCP.

Tel:        +27 11 339-3662

To download a PDF copy of this SENSE edition, go to:



1. Editorial
2. SECCP News: Press Releases, SIA on PBMR, REFIT II Submission
3. SA Sustainable Energy News: Nelson Mandela Bay Thinks OCGT is Green, No R&D for SA Green Energy, Refit Mark II, Where’s the Wind?, Millions in Equipping RE
4. SA Unsustainable Energy: Nukes Still on the Agenda, Mining for Eskom, Eskom’s Broke, Maroga Gets a Hefty Pay Rise, Hogan Admits to Having a Problem, Gigajoule Wants a Monopoly
5. Energy Policy & Analysis: CSP 24/7 Baseload, Autoposy of PMBR, Sustainable Energy Future
6. African Energy News: Inga & BHP Billiton, East Africa Tariffs, USA Seeks African Energy, Ivory Coast & CDM, Nigerian Oil Exports, Southern African Power Corridor


1. Editorial

Well, wasn’t Eskom’s 2009 Annual Report a shocker? Big losses on sales, primary energy costs doing a pretty good impression of a Titan rocket, and massive losses on its, yes, you guessed, those long-term supply contracts to industrial users. Nice guys like BHP Billition, the kind of folks with the kind of contracts that SENSE has been banging on about for the last three years. Literally been screaming, jumping up and down, waving fists, and other similar acts of self-righteous impotence.

Told you so.

There, that said and following the philosophy of putting the boot in, the SECCP has analysised Eskom’s cost/revenue equation for the past two years. Guess what? As a monopoly with complete control over distribution and production, Eskom has managed to defy all economic logic and sell significant quantities of electricity to industrial customers (in particular, international end users) at below actual cost of production. If the average cost of production is taken into account–which it should, as one of the advantages of a state utility is that it can levelise costs–the situation is even worse, mining and industrial concerns are paying tariffs below average cost of production while domestic users are forking out on rates well above cost.

Both Adam Smith and Karl Marx must be weeping in their graves.

After much contemplation and discussions with bright young things, Minister Hogan has declared that we have a problem.

To view this research, please go to:

SE Briefing 18: Eskom Costs and Tariffs

So, does Eskom fall on its sword, does Jacob Maroga cry mea culpa in a Japanese-style public apology? Does Eskom invite the Catholic Church to come in and hear confessions from thousands of guilt-stricken Eskom employees? Not in this universe, or in any parallel universe. Instead, Jacob gets a 27% pay hike.


Perhaps it could be due to the rising costs of luxury cars; the rush on the luxury car market by ministers has pushed up the prices so much that poor Jacob couldn’t afford to purchase his own petrol-guzzling, rolling carbon-fibre chassis of environmental destruction without a pay hike. Heaven forbid, that Jacob would have to set his sights on something not representative of his statue. No fuzzy, bunny-hugging, leftist Toyota Prius for him.

Which pretty much sums up the attitude to renewable energy. In an article entitled “2bn investment for Bay green power projects” (see below), Nelson’s Mandela Bay’s plan for green power has, at its centre, an OCGT at Coega, fuelled no doubt by PetroSA. Somewhere between the reporter and the Municipality, the use of diseal and natural gas has become green. That’s some serious greenwash, on par with Sasol’s periodic annoucements. The latest from that front is that Sasol seems to think it should qualify for CDM credits for co-generation at Secunda, despite continuing on with its plans to build a new planet-killing CTL plant in Limpopo. With planning logic like this, invest in sunscreen and air conditioning stock, as its gonna get real hot around here.

As for the rest of SENSE, we’ve got the usual story. No serious money being spent on RE, nuclear ambitions that defy economic logic (spot the trend), BHP Billition seeking a sweetheart deal at Inga, Gigajoule looking for a monopoly on natural gas sales, the PBMR is a waste of money, US wants African oil, and so on. For those who care, technological advances are moving CSP towards 24-hour baseload production, making a sustainable energy future even more of a possibility.

Goodnight and good luck, you’re going to need it.

Tristen Taylor
Energy Policy Officer
Earthlife Africa Jhb
30th of Sept. 2009

SE Briefing 18: Eskom Costs and Tariffs
September 20, 2009
Press Release: Earthlife Africa Welcomes End to Rio Tinto Smelter
October 16, 2009

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