Supplementary Budget 2020

Nene: Eskom still needs to connect 3 million to grid

Electricity pylons in Beaufort West. Nersa is holding public hearings on Eskom's proposed revenue price determination. (Picture: Chris Kirchhoff/MCSA)
Electricity pylons in Beaufort West. Nersa is holding public hearings on Eskom's proposed revenue price determination. (Picture: Chris Kirchhoff/MCSA)

Cape Town – The government needed to keep Eskom in its current form to fulfill its mandate to South Africans who have no access to electricity, Finance Minister Nhlanhla Nene said on Thursday.

“We are looking carefully at where the state should be to allow the private sector to play its part,” he said. “Some people call it privatisation.”

He said if the government broke up the monopoly of Eskom, then it couldn’t regulate the sector.

“Here you have an ailing state entity responsible for providing electricity,” he said. “There are still three million South Africans who are not connected. If you left that in the private sector, you would not get that. We can still open it up for the private sector.”

Changing behaviour

Raising the electricity tariff was as much about bringing in more revenues for the ailing power utility Eskom as it was about changing behaviour towards a more efficient use of energy, he said.

Nene proposed a number of tax measures to promote energy efficiency, which would be discussed further with industry, the electricity regulator, Eskom, and other interested parties during his budget speech on Wednesday.

Read: Some taxes, fuel, electricity levies to rise

These included a temporary increase in the electricity levy, from 3.5c/kWh to 5.5c/kWh, to assist in demand management.

“It is not only about raising energy revenues,” Nene told the New Age breakfast briefing. “It is also about changing behaviours to encourage a more efficient use of energy.”

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