Page 6 - AfrElec Week 04 2021

AfrElec TARIFFS AfrElec

SA set for new capacity and tariff reforms

SOUTH AFRICA SOUTH Africa plans to procure 6,800 MW of coal, which some analysts said was an attempt to
renewable capacity over the next year through a placate lobbyists for the fuel.
total of three procurement rounds, in addition to
5,000 MW of new coal, gas and storage capacity. Tariffs
The ruling African National Congress (ANC) Meanwhile, Eskom presented to National
said that the government aimed to diversify the Energy Regulator of South Africa (NERSA) new
country’s generating mix away from coal, Reu- tariff plans that would split up power bills into
ters reported. one charge for energy usage and a fixed daily
The country is suffering from a series of network charge which is independent of usage.
power cuts, known as load-shedding, at the Eskom has also reiterated that its current tar-
present time, because state-owned Eskom has iffs do not reflect the costs required to run the
proved unable to meet demand, as up to 12,000 national grid and supply customers with power.
MW of generating capacity is offline for planned Eskom said the changes aimed to prevent the
and unplanned maintenance. loss of revenue from South Africans using solar
President Cyril Ramaphosa has pledged panels to generate their own electricity.
to invest in upgrading Eskom’s power plants, One of Eskom’s proposed measures is the
but power cuts have continued at the country’s splitting of energy tariffs into fixed and variable
elderly capacity. costs, which would make Eskom more attractive
The plans come as Eskom said this week that when compared to alternative energy sources
it aimed to restructure power tariffs in a bid to such as solar power, it said.
make them more cost-reflective and to increase A key change would be to change how fixed
revenues. network costs, which include transmission lines,
However, critics said that the new tar- distribution lines and transformer costs, are paid
iffs would make domestic solar panels more for.
expensive, and could give Eskom a competitive At present, these network costs are currently
advantage over the new generation of private calculated on a per customer or per watt basis.
generators. Eskom aims to replace this with a per day tariff.
The country’s solar industry said that this
Procurement round would lead to solar panel users paying more than
Reuters said that ANC officials intended to before, as they would need to pay daily fixed costs
launch the first renewables round in January or to Eskom to be connected to the grid even if they
February for 2,600 MW of wind and solar, with are using their own power.
another 2,600-MW round in August and a third Eskom said it was doing this as South Afri-
for 1,600 MW in January or February 2022. cans who use solar power systems generate most
A procurement round for roughly 500 MW of their electricity during the day, which Eskom
of energy storage would start around September, argues forces it to ramp up at a faster rate to meet
followed by rounds for 1,500 MW of coal and evening demand.
3,000 MW of gas around December. Eskom claimed that the current tariff struc-
The country’s continued reliance on coal is ture had caused South Africans to falsely believe
controversial, as the country is still a major pol- solar generation was much cheaper.
luter, and global banks and investors are now Eskom has argued that its tariffs have cre-
reluctant to lend to coal projects. ated a “falsely attractive business case for own
The ANC’s proposals are broadly in line with generation”.
the government’s existing Integrated Resource By splitting its tariffs into fixed and variable
Plan, which sets out plans for new capacity until costs for the consumer, solar power customers
2030. will still need to pay the fixed cost regardless of
A 2019 update of the plan contained big allo- their usage, and their solar power system will not
cations for wind and solar but also included new save them nearly as much money.

P6 www. NEWSBASE .com Week 04 29•January•2021