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Stygende elektrisiteitstariewe is grootste hindernis vir landbou en die breër ekonomie | Rising electricity tariffs are a major constraint for agriculture and the overall economy

English to follow:

21 Mei 2020

Nersa het sy besluit oor Eskom se regulatoriese aansuiweringsrekeningaansoek (RCA) vir die 2018/19-finansiële jaar bekendgemaak. Nersa het die RCA-balans van R13,3 miljard in Eskom se guns goedgekeur. Eskom het aansoek gedoen vir R27.323 miljard. Agri SA het skriftelik kommentaar aan Nersa gelewer en ‘n voorlegging gedoen tydens die openbare verhoor in Februarie 2020. Ons insette het die belangrikheid van die landbousektor vir voedselsekerheid, asook die nadelige impak van stygende elektrisiteitstariewe, uitgelig. Nersa se redes vir sy besluit en ‘n implementeringsplan vir die 2018/19 RCA-balans moet nog vrygestel word. Hierdie RCA-balans sal dan verhaal word deur middel van verdere elektrisiteitstariefverhogings.

Om in bedryf te bly, moet Eskom al hoe hoër tariewe instel. Swak ekonomiese toestande en prys-sensitiewe verbruikers manifesteer egter in laer elektrisiteitsverkope. As gevolg van die nasionale inperking en beperkte ekonomiese aktiwiteite, is daar ‘n verdere afname in aanvraag en verkope. In reaksie hierop, sal Eskom weereens hoër tariewe moet instel, wat die kragvoorsiener dus verder in ‘n ‘dodelike spiraal’ sal afdruk. Die huidige trajek van stygende elektrisiteitstariewe is nie volhoubaar nie.

Die landbousektor speel ‘n kritieke rol om te verseker dat daar aan nasionale voedselsekerheidsvereistes voldoen word. In die konteks van COVID-19 is dit selfs belangriker vir die landbousektor om voldoende, bekostigbare voedsel te voorsien. Meer as 25% van die land se voedsel word deur besproeiing-afhanklike en energie-intensiewe bedrywe geproduseer, insluitend tuinbou, suiwel, pluimvee, graan en agro-verwerking.

Boere is prysnemers, dit wil sê hulle kan nie van verbruikers verwag om die verhoogde kostes te absorbeer nie. Volgens DALRRD se amptelike syfers, beweeg die pryse van landbouprodukte sywaarts vir die afgelope twee jaar (2017/18 – 2018/19). Elektrisiteit is ‘n sleutel produksie-inset en gevolglik sal verhoogde tariewe ‘n ernstige impak op die landbou hê.  Landboubesteding aan elektrisiteit in 2019 het ongeveer R7,4 miljard beloop. Die komende verhoging in elektrisiteitskoste sal geweldige druk uitoefen op landbou-ondernemings se likiditeit, aangesien elektrisiteit ‘n aansienlike persentasie van hul veranderlike kostes uitmaak.

Alternatiewe oplossings, as deel van die hervorming van die energiesektor, moet voorsiening maak vir groter privaatsektor-deelname en -mededinging in die opwekking van elektrisiteit ten einde dit meer bekostigbaar te maak.

Die Sentrum van Uitnemendheid: Ekonomie en Handel is aktief op verskeie fronte ter ondersteuning van die uitbreiding en volhoubaarheid van die landbousektor. Wat elektrisiteit betref, doen ons voorspraak om elektrisiteit- en vaste-koste tariefverhogings te beperk, terwyl ons reeds aansienlike sukses behaal het met die daarstelling van ‘n meer gunstige bedeling vir hernubare energie in die landbousektor

Tariefverhogings word geïmplementeer volgens die ERTSA-metodiek waar vaste-koste tariewe verhoog word met dieselfde persentasie as elektrisiteitstariewe. Agri SA het onderneem om verskeie aksies te loods om hierdie aangeleentheid met Nersa en Eskom op te neem.

Eskom se inkomste-aansoek by Nersa en die goedgekeurde persentasie verhoging in elektrisiteitstariewe is gegrond op vooruitsigte vir elektrisiteitsverkope. Om hierdie rede was ons nog altyd van mening dat vaste-koste tariewe nie verhoog moet word op dieselfde basis of met dieselfde persentasie nie. Ons sal voortgaan met ons pogings om ‘n volhoubare oplossing te steun ten einde elektrisiteit meer bekostigbaar te maak vir die sektor as geheel.

Navrae:

Nicol Jansen

Voorsitter: Agri SA Sentrum van Uitnemendheid: Ekonomie en Handel

Dr Requier Wait

Hoof: Agri SA Sentrum van Uitnemendheid: Ekonomie en Handel

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 21 May 2020

NERSA has announced its decision regarding Eskom’s Regulatory Clearing Account (RCA) application for the 2018/19 financial year. NERSA approved an RCA balance of R13,3 billion in Eskom’s favour. Eskom’s application was for R27.323 billion. Agri SA provided written commentary to NERSA and presented at the public hearing that took place in February 2020. Our inputs highlighted the importance of agriculture for food security and the negative impact of rising electricity tariffs for the sector. NERSA’s Reasons for Decision (RfD) and an implementation plan for the 2018/19 RCA balance must still be released. This RCA balance will be recouped by even further electricity tariff increases.

To stay afloat, Eskom requires higher and higher electricity tariffs. However, weak economic conditions and price sensitive consumers translates to lower electricity sales. The national lockdown and limited economic activity weaken electricity demand and sales even further. In reaction to this, Eskom will again need higher electricity tariffs that push Eskom further into a utility “death spiral”. The current trajectory of rising electricity tariffs is unsustainable.

The agriculture sector plays a crucial role to ensure that national food security requirements are fulfilled. In the context of COVID-19, it is even more crucial for agriculture to be able to provide sufficient and affordable food. Over 25% of the country’s food is produced by irrigation-reliant and energy-intensive industries, including horticulture, dairy, poultry, grains, and agro-processing.

Farmers are price takers, meaning that they cannot easily pass on rising costs to the consumer.

According to official figures from DALRRD, prices of agricultural products moved sideways for the last two years (2017/18 – 2018/19). Electricity is a key production input and accordingly, increased tariffs will have a severe impact on agriculture. Agricultural expenditure on electricity in 2019 amounted to approximately R7.4 billion. The forthcoming increases in the costs of electricity will place tremendous liquidity pressure on agricultural enterprises, given that electricity constitutes a significant proportion of their variable costs.

Alternative solutions, as part of energy sector reform, should allow for greater private sector participation and competition in the generation of electricity to make it more affordable.

The Centre of Excellence Economics & Trade is active on various fronts to support agriculture’s growth and sustainability. In terms of electricity, we lobby to mitigate electricity and fixed cost tariff increases, whilst we have made significant strides in opening-up regulations for the use of renewable energy in agriculture.

Tariff increases are implemented according to the ERTSA methodology whereby fixed cost tariffs are increased by the same percentage as electricity tariffs. Agri SA has undertaken several actions to raise this issue with NERSA and Eskom.

Eskom’s revenue application to NERSA and the approved percentage increase for electricity tariffs are based on projections of electricity sales. Accordingly, we have always maintained that fixed cost tariffs should not be increased on the same basis or by the same percentage. We will continue our engagements to support a sustainable solution to make electricity more affordable for the whole sector.

Enquiries:

Nicol Jansen

Agri SA Chairman: Economics and Trade Centre of Excellence

Dr Requier Wait

Agri SA Head: Economics and Trade Centre of Excellence