Answer to Question #95284 in Microeconomics for Tina

Question

with regards to the coal shortages and municipal debts, what forms of interventions do you think eskom can put in place in order to cover up for all the debts and continue operating . Incorporate relevant graphs in your answer.

Answer 1

To solve these problems Eskom is in contact with the National Energy Regulator of South Africa (Nersa) regarding the next steps. In the meantime, Eskom's action plan rests on three main prongs:

1) Bringing in extra coal as a relief measure. Some is being transported by truck, and there is also an agreement in place with Transnet to bring in extra coal reserves by rail.

2) Signing new contracts. While 14 new suppliers are on the horizon, some will only kick in next year. Phasiwe says six suppliers have been willing to start with immediate effect, with four starting this month or early next month.

3) Relying on diesel as an interim measure to supply power.

First two solution can be reflected on this grah:

The third solution can also be shown on the grah above, but as using disel will increase the cost, supply curve won't be able to be at the same possition.