Despite the current respite, all South Africans have first-hand knowledge of Eskom’s struggles to keep the lights on, and the dire consequences of that, especially for businesses.
While the country’s largest power consumers, such as mining companies and manufacturers, are exploring alternative sources, these are very small-scale and do not present a viable solution for their general dependence on the national grid. They also tend to buy directly from Eskom. Already municipal electricity departments are seeing profit margins erode, and some have already become loss-making. This is just the tip of the proverbial iceberg.
In other parts of the world, municipal business models are dramatically changing. In the US, for example, revenues have been unhinged from power sales and tariffs reflect both the cost of power generation as well as a fixed fee for the power grid services provided by a municipality.
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