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Eskom has yet another headache

An R11.5bn annual carbon tax bill.

Troubled state-owned power utility has yet another thing to worry about — a big carbon tax bill expected to kick in from 2023.

Eskom which has been forced to turn to the government for bailouts to meet its obligations, mostly burns coal to generate power and is one of the country’s biggest polluters.

The company will benefit from exemptions in the first phase of the tax that took effect from June 1. However, a second phase that starts in 2023 may mean an annual carbon-tax bill of about R11.5 billion, Gina Downes, chief adviser for environmental economics at the utility, said Tuesday in a presentation in Johannesburg.

Read:

Eskom is killing people with its China-level pollution

These charts show how much trouble Eskom is in

“There’s likely to be a significant additional revenue requirement,” Downes said. The utility said earlier that “substantial” costs were anticipated in the second phase of the tax, without giving an estimate.

Eskom, which produces more than 90% of South Africa’s electricity, accounts for about 42% of the country’s greenhouse gas emissions, Downes said.

As part of efforts to revive Eskom’s finances, South Africa is considering plans to increase the amount of renewable-energy generation and shut some coal plants early in exchange for getting better terms on the utility’s debt, a person familiar with the matter said last month.

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They have tried cadre deployment, different ministerial task teams, different CEO’s, a team of foreign specialists, a team of local specialists, in desperation they even consulted the labour unions, they also threw tons of taxpayer money at the problem without any success.

The local Veterinarian can offer an out-of-the-box solution to Eskom’s problems. Many of us have heard this advice: “Do you want “a” dog, or do you want “this” dog? This dog is old and dying and it will cost you a lot of money to keep it alive for only 30 days. Let’s euthanize it and I will give you a lovely puppy for free.”

That is the solution to our problems with Eskom. Put it out of its misery and nurture the new puppies called sun and wind. We are getting them for free.

Sadly Sensei Eskom is not as easy as a new dog methinks. Having dabbled in power generation with the benefit of a tough old artisan or three I think government should put the existing “fleet” up for sale; but open sale; no bs BEE etc. It could be SA’s only chance actually.

Yeah, I know, it will never happen; many corrupt reasons.

Sale better happen soon, or we wont be able to use the lever, as assets wont cover the debt and people wont overpay for large RSA assets…

Paul, sadly there are too many that have drunk the renewables kool aid. The issue with renewables is that nowhere in the world can they provide the right amount of power at the right time for the right price, consistently. South Australia is a classic case in point. South Australia, renewables Mecca, produces more energy than it uses, however, it cannot store this energy. It consequently has to import power for times when the wind does not blow or the sun does not shine. South Australia has the most expensive electricity in the world. It also has the highest unemployment rate in Australia. It is absolutely imperative that Eskom is sold to non BEE buyers and various sources of power be allowed to compete with one another.

@RichardtheGreat
” The issue with renewables is that nowhere in the world can they provide the right amount of power at the right time for the right price, consistently.”

Nowhere in the world is a pretty dangerous term to use:
Iceland 100% – (Hydro 85% Geothermal 13%)
Paraguay 100% – (Hydro 100% , They also export to Brazil and Argentina)
Norway 99% (98% Hydro rest is Wind)
Costa Rica 98% (70% Hydro Geothermal 15% Wind 10%)

The common thread here is, they used the cheapest form of renewables : Hydro and Geothermal.

The sun and wind guys bring their own money, erect, maintain and sell to Eskom. The Eskom smoke screen about the higher cost is BS, put out there to confuse and reinforce the Nuclear issue.

obviously the cadres won’t see that, as long as there is a faint possibility of more looting the show goes on.

Not quite methinks. The big REIPP (sic) projects had lucrative contracts with Eskom at fat profit margins based on costs I knew of at the time. Financiers, shady BEE partners and a host of others did very, very well out of the tariffs. No one I have seen has yet produced an analysis of power supplied vs power assumed at time of tender.

I’m going against the flow. Well organised and controlled coal (or gas from Moz) power still has a place for reliable base load. Not ANC Eskom and its BEE and AA freeloaders.

Considering… After this we have to choose a best solution and then implement. Thinking and pondering, a better word, we do very well but unfortunately this takes too long.The correct choice seems a major hindrance, and well cost effective implementation an impossibility.
Now lets ponder about this conundrum.

I don’t believe it will just affect ESKOM. Other “employers” are going to have a problem as well. Most of them don’t have exemption so the effect will be more immediate.

This is a cost to company not previously budgeted for and will make them a little less competitive. I think guys in the steel industry and some of the miners are already sweating blood so this could affect them quite bad.

Any tax always have some sort of consequence.

SENS from Arcelor Mittal. To restructure and pay off over 2000 people.

Typical SA problems.

I thought the energy user pays the carbon tax. Eskom generates – the carbon tax cannot be calculated on them and end-users?

Johan we do probably pay the carbon tax but it gets diverted to something else, like municipalities that get paid for electricity they supply to customers.

And this tax will help Eskom and it’s consumers….how exactly?

In a perfect world Eskom sees the tax coming and shifts to cleaner energy and scrubs more pollution off its smokestacks. This costs its consumers more, but they’re happy to pay up because they’ve all got jobs and welcome the clean air, etc

In case of Eskom, the tax is just another revenue stream for a ravenous government. Eskom sees it coming, doesn’t have the cash to do anything, bleats to nersa, gets another special increase, puts up its prices and kills a few thousand more jobs in the economy. Consumers can’t really pay so a big chunk of the tax is not collectible anyway, Eskom goes further into the red and the government must borrow more to prop it up.

This bailout must then be footed by a declining base of taxpayers who’ve just lost their jobs from the last price increase.

Government bemoans the widening inequality and poverty that this produces, so they embark on a wealth tax causing another exodus of skilled people and another reduction of the tax base.

Rinse and repeat. And then double down on BEE, charters and new smart cities.

100% – THE ANC CAN NOT / DO NOT WANT TO / IS NOT CAPABLE TO SEE THAT THIS ONCE MASSIVE ELECTRICITY PROVIDER WAS ACTUALLY CHANGED INTO A COLOSSAL USELESS MONSTER DIRECTLY BY THE ANC’S CADRE PALS JOBS AND BEE – EMPLOYEES WITH NO JOB DESCRIPTION, NO PERFORMANCE MEASUREMENTS BUT EARNING FAT SALARIES FOR DOING NOTHING. THE QUICKER WE CAN CHANGE TO OTHER ELECTRICITY SOURCES THE BETTER – IT ALREADY EXISTS IN OTHER PARTS OF THE WORLD, WHY NOT HERE – ANC IS S–T SCARED FOR THEIR CADRE UNFRUITFUL JOB LOSSES. TO ME PERSONALLY THE LAST STRAW FOR ESKOM’S MANAGEMENT / EXISTENCE WERE 3 THINGS: JUST MENTIONING MARIA RAMOS(THE OVERNIGHT CONNECTED EXPERT IN ALL BUSINESS FIELDS THAT EXIST IN SOUTH AFRICA) IN SPLITTING ESKOM INTO 3 DIFFERENT UNITS(AS IF THAT IS GOING TO SOLVE THE MASSIVE DEBT PROBLEM); THE CARBON TAX SIGNED BY THE ANC IS NOTHING ELSE THAN JUST AN INCREASE ELECTRICITY WITH ANOTHER NAME AND 3RDLY: OUR CURRENT PRESIDENT GIVE THUMBS UP FOR ZIMBABWE “ESKOM WILL STILL PROVIDE YOU WITH ELECTRICITY, DOESN’T MATTER THEY CAN NOT EVEN PAY THEIR CURRENT ACCOUNT – NO WORRY, THE SOUTH AFRICAN TAXPAYER / ELECTRICITY PAYER WILL PROVIDE / PAY ON AN IMPLODED SPONGING ZIMBABWE’S BEHALF TO KEEP THEIR LIGHTS ON. SOMEBODY HAS TO WORK OUT THE FINE BALANCING ACT AS PUT BY THE PRESIDENT

Me thinks Sensei are the visionary here, can i borrow your crystal ball plse
Regards
TT fan ( the four ring type for em sexist accusers, drive it dont feel it )

The best way to solve the carbon emission problem is to install 5 Amp trip switches in the residences of all these carbon doomsday profits and let them build their own sun and wind electrical converter systems and give them bicycles instead of the terrible motor vehicles.

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