Analysis: Brace yourself for a decade of big electricity price hikes

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Trying to get authoritative figures on what the future price of electricity in SA is no simple matter.

Finally I have found an authoritative source that verifies/proves the need for electricity prices to increase way above inflation for the next ten years. I highly recommend using these figures for financial modelling purposes in what ever context commercial, industrial, residential consumers and for business planning purposes.

Here are some highlights from this article:

“Shock though it would have been to consumers, the three-year power price hikes would, at least, have seen electricity prices eventually drop back to tracking inflation. Now it’s likely that the switch marked “Price Increases” will be left on – for the next 10 years at least. By MIKE RYCROFT, MARK BOTHA and CHRIS YELLAND”.

“…with the revised Eskom price trajectory now indicating increases of 27% ,31%, 35%, 35%, 35%, 13% and 13% for the years 2008 to 2014″

“Irrespective of which scenario is considered, the projected electricity prices in the draft IRP 2010 show annual increases well above inflation up to 2021, and it would appear that the golden era of Eskom price increases at or below inflation will only arrive thereafter”.

“It should also be noted that the current IRP 2010 draft document may still be subject to revision. Its projected price increases are based on several assumptions and there are many areas of uncertainty which could cause prices to increase even above those projected”.