Electricity users still reeling from the recent power cuts now face hefty tariff increases.

Eskom has confirmed on Friday that a definite hike in electricity prices above the inflation rate was looming.

Consumers will have to dig deep into their pockets to foot the bill for Eskom and the government's multi-billion rand solutions to the electricity crisis, including building more nuclear and coal power stations.

At least one new nuclear power station is planned for the vulnerable Western Cape to supplement Koeberg.

Above-inflation-rate increases can be expected
Eskom spokesperson Fani Zulu said that at present the price for electricity was unsustainably low. Various solutions to the electricity crisis would "certainly impact" on the cost of power supplies.

"Above-inflation-rate increases can be expected. These will have to be determined by the National Energy Regulator."

Zulu said that for the some years Eskom had supplied electricity at a low cost and South Africans had enjoyed low tariffs compared to the rest of the world.

But this would soon change.

Minerals and Energy Minister Lindiwe Hendricks said in written reply to a parliamentary question yesterday that Eskom had embarked on an R84 billion capital expenditure infrastructure plan over the next five years to address the electricity needs of South Africa.

Hendricks said the department had also embarked on an initiative to bring in additional power through independent power producers.

"Although South Africa has adequate coal reserves, it is important that fuel sources be diversified. Therefore, various fuel sources will be considered, including the use of combined cycle gas turbines, nuclear, renewables such as solar and wind power, as well as additional hydro imports from neighbouring countries."

Experts in the field confirmed that major price increases were on the cards. They are retired Eskom council member Christo Viljoen, independent energy researcher and former University of Cape Town academic Andrew Kenny, and director of UCT's Energy Research Centre Kevin Bennett.

They warned that cheap electricity would be a thing of the past and consumers must expect a hefty price hike.

The three agreed that renewable energy was not the answer. The most viable solution was to build more nuclear and coal power stations.

The crisis was predicted about 10 years ago when the government, assuming it could attract private partners to provide electricity, placed a moratorium on Eskom building more power stations.

Kenny said coal and nuclear power plants were the answer to the problem. "The price must go up to foot the bill of the new power stations. Without a shadow of a doubt electricity tariffs will increase."

Viljoen said the seven new gas turbines to top up the Western Cape - four in Atlantis and three in Mossel Bay - ran at very high generating costs. Therefore they could only be used during peak demand hours and could not be used to provide electricity continuously.

Viljoen said bringing the three mothballed coal power stations back to life would be costly. Eskom has calculated that this would cost R12-billion.

He warned that the three power stations were old and outdated, and it was doubtful if their redeployment could be technologically and economically successful.

A further concern was that Eskom's existing 24 power stations were old and coming to the end of their useful economic life. They would have to be replaced. Plans were needed for building new power stations.

He said the cost would inevitably have to be recovered from the consumers.

Viljoen said, in the long term, the prototype nuclear Pebble Bed Modular Reactor being developed held much promise and certainly was a viable solution. But the first commercial unit would only be available by 2013. While it was fail-safe, "this will clearly not solve Eskom's predicament for the immediate future".

He said renewable energy was not viable for large commercial use.

"Wind power is unfortunately not the holy grail of electricity supply for the future. Despite this energy source, wind, being free, the very high capital investment required and the high maintenance costs result in high generating costs."

He said solar heating water systems could help alleviate demand on mainstream electricity. But each unit costs R15 000. In Spain all new houses had to have one installed.

Bennett said coal was still a viable solution to the growing electricity demand in future decades.

"Its cost is relatively low and there are still a lot of coal reserves. But pollution remains a problem and the country could face increasing pressure for its gas emissions from the international world," said Bennett.

He said there was no coal in the Western Cape so the short-term solution would be to increase the number of gas turbines for electricity generation even though it was very costly.

Even so, costs were relative because the economic blow that industry suffered from power failures far outweighed the money it would be willing to fork out for uninterrupted electricity supply.

Bennett also foresaw an increase in the cost of electricity for consumers. "One way or the other we are going to pay more."

"Green power" was relatively expensive. But long-term power projects could be set up offering an environmentally friendly option.