Eskom to charge solar users in South Africa to remain connected to the grid

[quovadis]

As an aside: These fees will literally not apply for those who are "off-grid", i.e. without a connection, by definition. It applies for everybody with a connection. Including those with hybrid inverters in their systems.

Of course not. I haven't argued that. I've argued that people retain them as back up regardless of their set up.

Two increases are being considered, using the same underlying issue as motivation.

You get it?

ESKOM (speaking as the holding company) says:
A: We are selling less, and so making less overall, because private solar - So give us a per unit tariff increase.
B: We are selling less on some connections, and so making less per connection, because private solar - So give us a connection fee increase.

Eskom's basis for increasing its tariffs has never been based on anything more than under-recovery (cost exceeds revenue). Their motivation for the reason for it has never made a dent. Whether it's load shedding selling less kwh as a result, inefficiencies or expensive mops - it's just noise. You're being disingenuous to pretend otherwise.

Eskom is saying that one subsidises the other (energy/infrastructure deliver) so they should be representative. The only way you can argue otherwise is if you believe that there's no cost involved in the infrastructure that supplies the user who makes zero use of their electrical connection and that the impact of that operating cost somehow doesn't get absorbed by the regular customers who are using their connection.

IF both truly are appropriate, then each with consideration only for the relevant component entity's budget.

The relevant component would be the distribution or low voltage side. The proposal is the retail tariff plan after all.

 

[Bundu]

Of course not. I haven't argued that. I've argued that people retain them as back up regardless of their set up.

Eskom's basis for increasing its tariffs has never been based on anything more than under-recovery (cost exceeds revenue). Their motivation for the reason for it has never made a dent. Whether it's load shedding selling less kwh as a result, inefficiencies or expensive mops - it's just noise. You're being disingenuous to pretend otherwise.

Eskom is saying that one subsidises the other (energy/infrastructure deliver) so they should be representative. The only way you can argue otherwise is if you believe that there's no cost involved in the infrastructure that supplies the user who makes zero use of their electrical connection and that the impact of that operating cost somehow doesn't get absorbed by the regular customers who are using their connection.


The relevant component would be the distribution or low voltage side. The proposal is the retail tariff plan after all.

I agree!
sometimes it can be handy to argue with an exaggerated example like:
Let's assume there are 3000 houses in an area, supplied by Eskom, who maintains the network to each house.
Now, suddenly 95% of these houses install solar and reduce their consumption to only 5% of previous consumption.
Will Eskom be able to maintain the network with existing kWh only charges?
No
Is Eskom trying to maintain their previous income? No, that would be naive to think, they however have to maintain the supplies to 3000 houses, which they can't with 95% hardly contributing

 

[The Trutherizer]

Of course not. I haven't argued that. I've argued that people retain them as back up regardless of their set up.

"Off-grid" users specifically do not have connections. It's in the definition. They have nothing to rely on as backup.

Eskom's basis for increasing its tariffs has never been based on anything more than under-recovery (cost exceeds revenue). Their motivation for the reason for it has never made a dent. Whether it's load shedding selling less kwh as a result, inefficiencies or expensive mops - it's just noise. You're being disingenuous to pretend otherwise.

Don't pretend like they haven't already hugely increased per unit tariffs. Ones not due to inflation at all.


Within the context of a long period of time where demand was mostly flat. Only really lowering when loadshedding went nuts in the 2020s.

And honestly I would speculate that the record will show increased demand for 2024, compared to 2023, since most of the year has seen no load shedding.

Eskom is saying that one subsidises the other (energy/infrastructure deliver) so they should be representative. The only way you can argue otherwise is if you believe that there's no cost involved in the infrastructure that supplies the user who makes zero use of their electrical connection and that the impact of that operating cost somehow doesn't get absorbed by the regular customers who are using their connection.

You're the one who said components shouldn't "subsidize" each other. I spoke in terms of passing on costs, their own costs, as passed on from further upstream.

The relevant component would be the distribution or low voltage side. The proposal is the retail tariff plan after all.

But what if I buy electricity from a perfectly profitable IPP, with lower per unit costs, which sells to NTCSA at a lower per unit rate, as the ERA bill clearly states is part of the intent to allow. Do I (we, everybody) then still pay BOTH a per unit cost increase AND a fixed connection fee increase. So that ESKOM generation can be operated profitably?

 

[quovadis]

"Off-grid" users specifically do not have connections. It's in the definition. They have nothing to rely on as backup.

It's irrelevant to the argument? We're talking about people retaining their Eskom connection but not using it. The backup can be a STS or cutover too?

Don't pretend like they haven't already hugely increased per unit tariffs. Ones not due to inflation at all.

I never said they didn't. I argued that their motivation is simply they're not making enough.

Within the context of a long period of time where demand was mostly flat. Only really lowering when loadshedding went nuts in the 2020s.

Arguing demand and then showing supply?

And honestly I would speculate that the record will show increased demand for 2024, compared to 2023, since most of the year has seen no load shedding.

You'll have a hard time measuring it if people are resorting to backup power or alternative sources.

You're the one who said components shouldn't "subsidize" each other. I spoke in terms of passing on costs, their own costs, as passed on from further upstream.

We're talking distribution infrastructure. That's the stuff that keeps on exploding, being stolen, having their cables stolen etc. Transmission infrastructure is not included.

But what if I buy electricity from a perfectly profitable IPP, with lower per unit costs, which sells to NTCSA at a lower per unit rate, as the ERA bill clearly states is part of the intent to allow. Do I (we, everybody) then still pay BOTH a per unit cost increase AND a fixed connection fee increase. So that ESKOM generation can be operated profitably?

If you procure energy from an IPP they sell it to you. NTCSA just facilitate the grid to be used as transmission for the energy to transit over. You pay for the usage of the grid, not the energy itself. Same on the distribution side you'll have an agreement for them to facilitate it but it's for the use not the energy.

 

[The Trutherizer]

It's irrelevant to the argument? We're talking about people retaining their Eskom connection but not using it. The backup can be a STS or cutover too?

You said "off-grid". And it's as irrelevant. I will accept that you meant "hybrid users".

I never said they didn't. I argued that their motivation is simply they're not making enough.

Their motivation has to pass legal consideration. Or they won't get the increases.

Arguing demand and then showing supply?

Supply has to match demand closely. Otherwise the grid pops. I've only found graphs showing sales up to 2016, but the same trend is shown up to that period.

You'll have a hard time measuring it if people are resorting to backup power or alternative sources.

The records will show their sales.

We're talking distribution infrastructure. That's the stuff that keeps on exploding, being stolen, having their cables stolen etc. Transmission infrastructure is not included.

NTCSA – National Transmission Company South Africa

www.ntcsa.co.za

What are the parts are exploding again? Was it transformers maybe?
The reality is that NTCSA operates the entire grid. Who gets connected to sell onto it. And who gets connected to buy on it. They are the grid TSO (Transmission System Operator). You can look up what that means. Including connections. Even onsite meter readings are in their wheelhouse.

If you procure energy from an IPP they sell it to you. NTCSA just facilitate the grid to be used as transmission for the energy to transit over. You pay for the usage of the grid, not the energy itself. Same on the distribution side you'll have an agreement for them to facilitate it but it's for the use not the energy.

Pff... Apart from being the TSO (Transmission System Operator), the other prominent aspect of their mandate is to serve as the CPA (Central Purchasing Authority). In context of the open and competitive electricity marketplace they must establish.

https://www.stateofthenation.gov.za/assets/downloads/Fact_Sheet_Electricity_Regulation_FAQ_V2-17Nov.pdf

Central Purchasing Agency (CPA): The CPA willmanage the shift towards a competitive market.It is responsible for ensuring that there is areliable supply of electricity by buying power fromdifferent companies as the need arises. The CPAwill buy and trade power from existing and newindependent power producers (IPPs). It will finalisepower purchase agreements with Eskom electricityproducers to cover the remaining life of each plant.This will provide a mechanism to ensure a reliable

If you think the NTCSA is just a company that has the long wires... To maybe hold and look at. You're wrong.

I generally feel you're approach to the matter has two problems:

1. You're sucking it out of your thumb.
2. You maybe have a preference for the type of simplistic, quick fix, "less ringfences, more big cookie jar, please" thinking that got SA's electricity sector, an many others, in the current predicament we find them in.

 

[quovadis]

You said "off-grid". And it's as irrelevant. I will accept that you meant "hybrid users".

No because it's irrelevant. Off-grid still have AC chargers or transfer switches?!

Their motivation has to pass legal consideration. Or they won't get the increases.

Supply has to match demand closely. Otherwise the grid pops. I've only found graphs showing sales up to 2016, but the same trend is shown up to that period.

The records will show their sales.

Omg you're just arguing for the sake of arguing now. The basis is still the distribution network has cost.

What are the parts are exploding again? Was it transformers maybe?
The reality is that NTCSA operates the entire grid. Who gets connected to sell onto it. And who gets connected to buy on it. They are the grid TSO (Transmission System Operator). You can look up what that means. Including connections. Even onsite meter readings are in their wheelhouse.

Pff... Apart from being the TSO (Transmission System Operator), the other prominent aspect of their mandate is to serve as the CPA (Central Purchasing Authority).
https://www.stateofthenation.gov.za...Sheet_Electricity_Regulation_FAQ_V2-17Nov.pdf

Low voltage transformers are distribution not transmission. Distribution is everything that accepts high voltage onwards.
No, NTCSA operates the part of the grid responsible for transmission. They are responsible for ensuring a market but they're not purchasing energy and reselling it for wheeling agreements. Eskoms own energy is separate.

 

[quovadis]

1. You're sucking it out of your thumb.

Google electricity wheeling.

 

[quovadis]

@The Trutherizer

Here you go.

Wheeling - Distribution

Wheeling is the delivery of energy from a generator to an end-user located in another area through the use of an existing distribution or transmission

www.eskom.co.za

 

[The Trutherizer]

Low voltage transformers are distribution not transmission. Distribution is everything that accepts high voltage onwards.
No, NTCSA operates the part of the grid responsible for transmission. They are responsible for ensuring a market but they're not purchasing energy and reselling it for wheeling agreements. Eskoms own energy is separate.

Read the information. They are literally mandated to purchase and resell, wheeling deals aside (I'm not privy to how wheeling deals are arranged, nor will most people ever be). **** wheeling deals. Few residential users will make wheeling deals. That'll always be larger purchase agreements, by large consumers, otherwise the juice will not be worth the squeeze. Not even the legal fees. We're talking small to large industrial and commercial concerns, data centers, hospitals, schools, what have you.

Who the hell cares about wheeling deals in a discussion about residential connection fees?

And if not NTCSA [is responsible for connections], then NEDCSA when that is finalized. Likely some time in 2025. My argument will remain the same.

Once unbundling is complete, all current Eskom assets and responsibilities will be distributed between Generation, Transmission and Distribution. Falling, publicly under NewCo (or whatever the name ends up being, but as Independent companies for regulatory and financial purposes.

 

[quovadis]

Read the information. They are literally mandated to purchase and resell, wheeling deals aside (I'm not privy to how wheeling deals are arranged, nor will most people ever be). **** wheeling deals. Few residential users will make wheeling deals. That'll always be larger purchase agreements, but large consumers, otherwise the juice will not be worth the squeeze. Not even the legal fees.

And if not NTCSA [is responsible for connections], then NEDCSA when that is finalized. Likely some time in 2025. My argument will remain the same.

Once unbundling is complete, all current Eskom assets and responsibilities will be distributed between Generation, Transmission and Distribution. Falling, publicly under NewCo (or whatever the name ends up being, but as Independent companies for regulatory and financial purposes.

All IPP -> Customer or IPP -> Distribution or even Customer->Customer relationships are going to be wheeling. The fact that Eskom's transmission can purchase energy for their own purposes is separate. They have to maintain a baseload and synchronized grid after all and they're reselling it via Eskom distribution / Municipalities.

The rest has nothing to do with the argument that distribution (the part that Eskom direct and municipalities provide) has capital and operational costs. That cost cannot be subsidized by energy costs. CoJ have already adjusted their postpaid and prepaid service charges.

 

[The Trutherizer]

All IPP -> Customer or IPP -> Distribution or even Customer->Customer relationships are going to be wheeling. The fact that Eskom's transmission can purchase energy for their own purposes is separate. They have to maintain a baseload and synchronized grid after all and they're reselling it via Eskom distribution / Municipalities.

So you fixated on my question about "what if I buy from an IPP?".
Q: What is Discovery Green? CBi Electric Apollo? Green Electron Market? Africa GreenCo?

Obviously Eskom is pushing back against such operations, but it's not settled at all.

The rest has nothing to do with the argument that distribution (the part that Eskom direct and municipalities provide) has capital and operational costs. That cost cannot be subsidized by energy costs. CoJ have already adjusted their postpaid and prepaid service charges.

In response to pushback from residents. If not from where the costs are, then from where? The RAF??? Would make about as much sense.

 

[quovadis]

So you fixated on my question about "what if I buy from an IPP?".
Q: What is Discovery Green? CBi Electric Apollo? Green Electron Market? Africa GreenCo?

I'll just cover Discovery Green which is essentially procuring/trading energy and wheeling it to customers unless of course it's embedded on-site.

In response to pushback from residents. If not from where the costs are, then from where? The RAF??? Would make about as much sense.

Once again, they have their distribution network - it's not free.

 

[The Trutherizer]

Once again, they have their distribution network - it's not free.

I'm well aware it's not free. So why the insistence that the cost cannot be reflected in the energy prices, i.e. the product traded over said distribution network? Why should Eskom generation, or Eskom at all, see their tariffs, both per unit and connections fee, increase in cases where the distribution is not strictly theirs?

 

[quovadis]

I'm well aware it's not free. So why the insistence that the cost cannot be reflected in the energy prices, i.e. the product traded over said distribution network? Why should Eskom generation, or Eskom at all, see their tariffs, both per unit and connections fee, increase in cases where the distribution is not strictly theirs?

Because energy is a commodity and infrastructure is not. The retail price proposal is an increase in connection costs and decrease in energy cost. It’s not both.


Ok let’s simplify this.

The electrical cable linking your street to the local distribution box is stolen. It’s 150m and cost R380,000 for the cable, not including Labour and equipment and sundries. It gets stolen 3 times.

Add that cost to the kWh or should it be in the connection costs?

 

[The Trutherizer]

Because energy is a commodity and infrastructure is not. The retail price proposal is an increase in connection costs and decrease in energy cost. It’s not both.

My man... They're proposing 65% increases over 3 years to kWh price as well. On top of increasing the fixed connection fee. Where's the decrease in energy costs in that? What do you think I was talking about?

Ok let’s simplify this.

The electrical cable linking your street to the local distribution box is stolen. It’s 150m and cost R380,000 for the cable, not including Labour and equipment and sundries. It gets stolen 3 times.

Add that cost to the kWh or should it be in the connection costs?

Whoever incurs the cost should be able to recoup it. Some other entity shouldn't recoup the cost after whoever incurred the cost incurred it. The network operator. Through what means is available to them. That's how a business works. Income-Expenses. Budget. If their fees are how they make money, then through fees. Their fees. Not some other entity's fees. If their fees structure is determined by regulators, they should then be able to apply for an increase.

 

[SauRoNZA]

Many studies have been done on the total amount of solar installed in SA, does anyone know of any studies focuses on the BESS part of it in relation to the solar?

The what?

 

[quovadis]

My man... They're proposing 65% increases over 3 years to kWh price as well. On top of increasing the fixed connection fee. Where's the decrease in energy costs in that? What do you think I was talking about?

Whoever incurs the cost should be able to recoup it. Some other entity shouldn't recoup the cost after whoever incurred the cost incurred it. The network operator. Through what means is available to them. That's how a business works. Income-Expenses. Budget. If their fees are how they make money, then through fees. Their fees. Not some other entity's fees. If their fees structure is determined by regulators, they should then be able to apply for an increase.

The current proposed tariffs for retail pricing are available. Already posted.

Some other entity but whoever lol

Nice chat.

 

[TheChamp]

The what?

Battery energy storage systems.

 

[Swa]

Well the reality is that there's reasonable indication that distribution must fall under NTCSA currently. It's designated lawfully as "the buyer". From Eskom Generation, as well as section 34 IPP energy projects. i.e. Then also the reseller to consumers.

For Eskom's budget to come into the story at the point of connection again, makes little sense. The reasoning for the increases thus far is a lowering in demand from consumers. i.e. For Eskom generation's product (supply). Though NTCSA is wholly owned by Eskom, it is also fully separate. Has it's own board. And one must assume, it's own budget.

NERSA shouldn't be looking at Eskom's budget to determine price increases. NERSA should be looking at NTCSA's budget.

The major problem with this is that it's still the same entity controlling it. It's premature to talk about cost components until Eskom is fully separate otherwise it's just the wolf guarding the sheep. Once it's fully unbundled and the cost is determined, whether through a capacity charge or usage or something else, the entity buying and selling can determine how the cost is to be recouped.

The argument that there shouldn't be cross-subsidising has no rationale or explanation behind it. It looks like a made-up ideal. The reality is that almost all services have fixed costs worked into the price, it's not a subsidy. All goods have fixed costs worked into the price. It would be irrational to say that someone who makes one call a month should pay their mobile operator R200 before even using the network.

Oh and for Quovadis wanting to know how a private entity can reduce the cost to R1/kWh, would a private entity pay R240,000 for a broom?

 

[Bundu]

.....All goods have fixed costs worked into the price. It would be irrational to say that someone who makes one call a month should pay their mobile operator R200 before even using the network.

Oh and for Quovadis wanting to know how a private entity can reduce the cost to R1/kWh, would a private entity pay R240,000 for a broom?

yip, I can't wait for like-minded companies to install and maintain electricity networks to new developments and only rely on consumption... even when the consumption drops to zero - great business model