OUTSOURCING ELECTRICITY SUPPLY IMPERATIVE MOVE

MBABANE - The contract for Eswatini Electricity Company (EEC) to supply electricity to the entire country expires in 2025 and experts say this is an opportunity for government to outsource the supply.

Expert electrical engineers and lecturers at Eswatini College of Technology (ECOT) on Friday said outsourcing the supply of electricity would create competition within local companies thus reducing charges. They said if the contract to supply electricity was to be distributed among companies it would affect the rate at which units tariffs are charged locally. They said once companies compete to supply electricity, they submit different prices for units and the regulator would have to accept the cheapest.

Electricity

“If two companies were to supply electricity locally, their price range would differ as one would be expensive than the other,” they said. They said this would allow businesses and individuals to choose rates they can afford depending on the service offered by each company. The engineers mentioned that having one company contracted to supply electricity is a challenge, especially to businesses as they would not be able to contain the continuous hike in the price of unit. They said this also allows the company to decide on prices without the consideration of the performance of business and individuals.“When there is competition among businesses for the similar service output, the prices charged tend to decrease allowing consumer flexibility,” they said. They also mentioned that if government decides to renew EEC supply contract, electricity hikes are predicted to continue to escalate as they have no competitor. They said this might further influence EEC to supply electricity at a lower rate and decrease the room for more innovative ideas. “EEC is expected to come up with methods that would assist businesses and individuals decrease the use of electricity and increase their biomass knowledge,” they said. An EEC official who preferred to comment anonymously said it was not yet clear if their contract would be renewed, but biomass is imperative to the country.

Abroad

He said it is impossible for the price of electricity to be reduced as almost 80 per cent of the country’s electricity is sourced abroad. He said the high cost of electricity experienced by businesses locally was due to the fact that the country does not generate enough electricity to supply itself.
“We outsource electricity from South Africa and Mozambique, which comes at a cost and if our suppliers decide to increase, we are also forced to do the same,” he said. The EEC employee added that with the recent hike in petrol amongst other things, there is a possibility of a hike in electricity in the coming months.Business Eswatini and Eswatini Energy Regulatory Authority (ESERA) held energy talks on Wednesday with other stakeholders.
BE Chief Executive Officer Nathi Dlamini said one of the major objectives of the Indaba was to discuss the issues around the availability and sustainability of energy supply in the country, especially post 2025.

“It was felt that it is important to have an open conversation on this matter especially around the guarantee of future supplies of electricity as well as on the migration from fossil fuels to the more desirable and sustainable green energies,” he said. Dlamini mentioned that with the widespread reports of energy shortages which might necessitate load-shedding, it was felt that all stakeholders need to come together to look for ingenious ways to avert this threat. He said as the country seeks alternative sources of energy, which the private sector has already begun doing, the gathering felt that there was a need to be mindful and sensitive to the price-points at which these alternatives would be offered.

Consider

“Another issue which the gathering felt strongly about was the need for BE to consider matters of climate change as these require urgent attention,” he said. The CEO added that the energy regulator mentioned that they were in the midst of a regional energy crisis which he said could be overcome by Eswatini as the country is well endowed with biomass which can make it possible for the country to move towards renewable energy at a faster speed.
Dlamini said the regulator also alluded to the fact that energy was a key driver of economic development. ESERA CEO Sikhumbuzo Tsabedze said the supply of electricity was a serious challenge that needs to be addressed. He said since fossil fuel was no longer acceptable in the market, biomass was not an option but a necessity to drive the country forward.“Our mandate is to make sure we capacitate new procurement of energy and we will continue to do that,” he said. Tsabedze also mentioned that working with business community was necessary as innovative ideas could be shared.

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