November 7, 2024 - Silas Zimu, special adviser to South Africa's energy and electricity minister, has asked the country's coal producers to sell to state-owned utility Eskom at a reduced price for the next three years as a way of offsetting Eskom's proposed electricity price increase of 36pc.

In return for a "special price", Eskom would extend its coal agreements with suppliers, Zimu told a recent coal industry event in Mpumalanga.

Eskom recently proposed a 36pc tariff increase from April next year to energy regulator Nersa, with increased energy costs associated with coal procurement the most significant contributor to the hike.

While the tariff application has yet to be subject to public hearings, electricity minister Kgosientsho Ramokgopa has called the proposed hike "untenable".

Eskom says it also needs the tariff increase because of the government's inability to make defaulting municipalities pay their debts.

The beleaguered utility's debt stands at 400bn rand ($23bn) and it is owed R78bn by the country's municipalities. It says the tariff rise would help it become more self-sufficient and not have to rely on government finances.

Sums owed to Eskom are to be reinvested in infrastructure and maintenance of its power fleet. Eskom has 15 coal-fired power plants with installed capacity of 35.5GW, responsible for about 80pc of the country's electricity generation.

As of 18 October, Eskom had gone 206 days without load-shedding.