HomeSouthern AfricaTime of use tariffs for South Africa?

Time of use tariffs for South Africa?

8 March 2008 – The department of minerals and energy and Eskom are working on a new pricing policy, based on quantity and time of consumption, rather than a flat rate.

electricityIt is hoped that the new policy would be effective from as early as July 2008 and would determine tariff increase decisions of the National Energy Regulator, said minerals and energy director of electricity, Ompi Aphane.

Together with public enterprises director general, Portia Molefe and Eskom Enterprises cluster CEO, Brian Dames, Aphane briefed parliament’s minerals and energy portfolio committee on the electricity crisis.

The new pricing policy was a "rebalancing exercise", which would adjust amounts paid by different user categories, but not necessarily mean an increase in tariffs. A graduated tariff is proposed, based on consumption and time of use. This tariff would allow domestic customers to save electricity.

"We are not necessarily saying that the tariff escalation for domestic consumers would be to the same extent as key customers," he said.

The main thrust of the policy would be to recover as much of the full cost of generation as possible, and align wholesale prices with the cost of generation. Key customers often did not pay cost reflective tariffs and this was a way of addressing this issue. Poverty tariffs would also be provided for in the new policy.

Key customers – mines, smelters and other big industry – were "ready to play ball" according to Aphane, although municipal buy-in would also be needed, as electricity income was an important source of municipal revenue.

Portia Molefe said day light saving was being considered as an option, especially since "alternative nodes of intense electricity consumption outside Gauteng had developed." Up to 200MW could be saved by instituting day light saving, but the logistics of two time zones would have to be carefully considered.

By 2010, all electric geysers would have to incorporate solar heating in all new houses valued at US$100 000, or larger than 300m, Aphane said. This would also apply to commercial buildings, hostels, resorts and shopping centres. In addition, all geysers would be fitted for ripple control.