Eskom has outlined its electricity price hikes for the next 15 years and it is an ugly picture! The Financial Director of Eskom, Paul O’Flaherty, outlined Eskom’s longer term plans and assumptions to parliament this week.
Here is a quote from the BusinessDay article referred to:
During its briefing to the MPs, Eskom said it was at least 15 years out from instituting inflation cost tariff increases as it needed 16% increases for the next five years, then followed by a similar period of 20% increases, with a final five years of 9% hikes.
For businesses, farms, schools and households alike, this should ring major alarm bells. For us as a winery, electricity is our 2nd biggest monthly expense (behind salaries & wages). Our electricity costs increased by 140% over the past 4 years. Apart from the direct electricity expenses, we have seen bottle costs rocket as the glass producers claim it is one of their major cost components.
In a tough economy, it has been very difficult to pass these cost increases on to the consumer. Wineries have thus seen significant margin pressure. The only way we can prevent this from happening to us in future, is by installing our own solar energy plant, which will basically fix our energy costs for the next 25 years.
We are well underway with our 220 KWp solar installation and very happy we took the plunge when we did! If you don’t take control over your own destiny, the graph below shows should give you a wake up call! This is what that translates to in terms of electricity prices over the next 15 years:
Going green has never looked better from a bottom line perspective!