South Africa: Eskom Can No Longer Be Allowed to Be Both Poacher and Game-Keeper of the Migration to Renewable Energy


The cost of renewable energy has declined by up to 80% since 2008, but Eskom is still not fully sold on the idea of ditching coal for power generation. Eskom's website makes the case for coal and nuclear as 'the most economical' and viable ways to generate electricity in South Africa and complains that harnessing sunlight 'is difficult and expensive', while wind power is 'not reliable'.

Eskom's money problems and power generation challenges look set to continue long term and if South Africa is serious about ditching its coal power fleet in favour of renewables - guaranteed to give the country stability, create jobs and reduce carbon footprint - then the time has come to give independent power producers (IPPs) a bigger role in the economy.

Last week, ratings agency Fitch downgraded Eskom to two levels below junk status. This came on the heels of the country's downgrade by both Fitch (BB to BB-) and Moody's (Ba1 to Ba2) on 20 November.

Although Fitch noted in its decision that Eskom's unbundling of generation, transmission and distribution activities as well as its carbon-reduction efforts were progressing well, it based part of its downgrade decision on the fact that "there is no...

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