No guarantee energy transformation will lower electricity prices, says Ramokgopa
The minister says several factors control electricity prices.
Dr. Kgosientsho Ramokgopa, South Africa's Minister of Electricity and Energy, has stated that transforming the nation's energy sector does not guarantee lower electricity prices for households. This comes as the government accepts public input on the Revised Electricity Pricing Policy, which aims to provide relief for South Africans.
President Cyril Ramaphosa, alongside National Treasury and the Department of Electricity and Energy, advocates for the unbundling of Eskom, claiming it will end the company's historical monopoly, promote market competition, and bring private investment to address the energy crisis. However, Ramokgopa cannot guarantee that the energy sector transformation will benefit low-income households.
He was asked by EFF MP Lorato Florence Tito about guarantees for lower costs and greater reliability, but Ramokgopa cited several factors influencing electricity prices and stated that there is no responsible guarantee of immediate price reductions. Ramokgopa emphasized that the transformation is not merely an institutional restructuring exercise but aims to address structural weaknesses causing unreliable electricity, insufficient investment, constrained grid capacity, and rising system costs.
The Electricity Regulation Amendment Act of 2024 provides the legal framework for a more competitive and transparent electricity supply industry, enabling measures such as non-discriminatory access to the transmission network, an independent transmission system operator, improved system planning and operation, and the development of a wholesale electricity market.
Ramokgopa noted that these measures expect to increase investment in new generation capacity, improve grid efficiency, strengthen supply security, and introduce transparent market mechanisms, which could gradually lower electricity costs. He reiterated that the government's efforts to improve affordability and protect vulnerable households include measures like Free Basic Electricity, indigent support, distribution sector improvements, and sustainable approaches to universal energy access.
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