KEY POINTS
- Eskom plans to protect revenue through higher network and fixed charges.
- Solar users could pay significant monthly fees even when buying little Eskom electricity.
- Homepower 4 customers could face a R670 monthly charge from April 2027.
South Africa’s power utility Eskom is moving towards a tariff model designed to protect its revenue even as more customers generate their own electricity or purchase power from alternative suppliers.
The state-owned utility has indicated that customers who reduce or stop buying electricity directly from Eskom could still be required to pay significant charges for access to its electricity network.
During Eskom’s annual results presentation, one of the company’s slides stated that the utility would continue to retain revenue even when customers self-generate electricity or purchase power elsewhere.
The utility said this would be achieved through network charges, customer wheeling arrangements and revised tariff structures that separate the cost of electricity consumed from the fixed costs associated with maintaining the electricity network.
The development comes after years of rising electricity prices and load-shedding encouraged households and businesses to reduce their dependence on Eskom.
Declining electricity sales put pressure on Eskom
Eskom’s strategy comes against the backdrop of a prolonged decline in electricity sales.
The utility reported a 6.2% reduction in sales volumes, contributing to a situation in which it had more generation capacity and contracted coal than it immediately needed.
Eskom chief financial officer Calib Cassim said improved plant availability had, for the first time in more than a decade, created an estimated 2GW to 3GW surplus in generation capacity.
Rather than allowing the additional capacity and pre-committed coal supplies to remain unused, Eskom has been looking for ways to convert them into revenue.
Cassim said the utility was therefore able to offer preferential electricity tariffs to large industrial customers such as smelters, helping Eskom monetise spare capacity while using coal that it had already committed to purchasing.
One of Eskom’s responses has been to offer smelters electricity at a preferential tariff of about R0.62 per unit.
That price is substantially lower than the average electricity tariff paid by residential customers.
According to Eskom, the arrangement allows it to generate revenue from excess capacity and coal supplies instead of allowing the fuel to accumulate in stockpiles.
The utility is also exploring other measures to stimulate electricity demand, including customer wheeling optimisation and a pilot project involving Bitcoin mining.
