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A direct competitor of Eskom will push electricity prices down – Mantashe

The minister on Monday announced that a separate entity would be allowed to start producing power.

Minister of Mineral Resources and Energy Gwede Mantashe addressing the annual Investing in Africa Mining Indaba on 3 February 2020 at the Cape Town International Convention Centre. Picture: @GwedeMantashe1/Twitter

CAPE TOWN - Minister of Mineral Resources and Energy Gwede Mantashe said rolling out a second power generating entity, besides Eskom, was a step in the right direction to address the high cost of electricity in the country.

Mantashe on Monday announced that a separate entity would be allowed to start producing power. He opened the 26th annual Investing in Africa Mining Indaba at the Cape Town International Convention Centre.

The minister emphasised that, besides load shedding, another Eskom-headache was the high price of electricity.

He said electricity tariffs could be lowered by rolling out another power producer as well as supporting more competition in the market.

“That is what we are having in mind, the Dutch model, where you can buy electricity from Joburg from a generator in Cape Town. It is through the transmission and you pay the price that you agree with the seller. We think that will push the price of electricity down,” he said.

He said nothing prohibited Eskom from venturing into renewables themselves.

“If you read the IRP properly, you will notice that we’ve given space to Eskom to get into renewables. They are not restricted to coal, they can expand their scope,” Mantashe said.

Mantashe stressed that government was making progress in creating a conducive environment for mining.