Renewable energy will cost Eskom an estimated R210billion

Electricity Minister Kgosientsho Ramokgopa has revealed that Eskom cannot afford a move to renewable energy despite its commitment to shift from coal-powered electricity. In grid expansion alone,  it would cost the power utility an estimated R210 billion over the next decade.

Ramokgopa made the announcement following the ANC’s NEC meeting in Boksburg.

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ESKOM CANNOT AFFORD RENEWABLE ENERGY

In  the last decade Eskom, has expanded the national grid by adding 4500 kilometers of power line. However it would need to triple that if it seeks to expand into renewable energy.

“Eskom in the past ten years has extended the power line by about 4500km. In the next 10 years to achieve that we must extend the lines by 14 000km so it must be grown three and a half fold”, the minister says.

The move to green energy will over the next ten years cost the power utility more than R210billion- a figure Eskom simply cannot afford.

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“We know the balance sheet of Eskom cant accommodate that. We know their conditions with there fiscal support and there is an escape clause there , they can ask permission from the Minister of Finance to go and borrow.”

“But even if they’ve got the right to borrow the balance sheet still won’t be able to accommodate what needs to be done. We need an upward of R210billion for us to do with issues of grid expansion and grid strengthening.”

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RAMOKGOPA SAYS ELECTRICITY CONTROL REMAINS WITH THE STATE

With financing likely to come from the private sector, Ramokgopa says there are three factors that must be taken into consideration when entering a financing agreement.

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1. The State must at all time be in control of the grid.

2. We must be able to tap into the liquidity that is within the private sector without undermining the ownership of the grid.

3. The operation of the system of the grid remains with the system operator which is Eskom and will not be sub contracted.

The minister further added that the expansion and strengthening of the grid is long overdue.