Uncertain power price path heightening grid-defection risk, EIUG warns

Energy Intensive Users Group of Southern Africa’s (EIUG’s) Piet Van Staden has expressed serious anxiety about the near-term sustainability of South Africa’s electricity industry in light of the prospect of yet more tariffs hikes, which would further damage industrial demand and, in turn, trigger yet higher tariffs for remaining consumers. Speaking at a South African National Energy Association conference in Johannesburg on Thursday, Van Staden warned that a price tipping point had been breached and that electricity intensive firms could be forced to defect from the grid should further double-digit increases be approved. Such defection could take the form of firms installing cheaper own- or co-generation plants, or result in operations being moved to jurisdictions where power prices and the price path were more attractive.