Eskom’s interim results to September 2020 revealed that 3,513GWh was stolen from the power utility in six months, which is equivalent to 3% of the total energy supplied.
At R1.41 per kWh – the typical rate paid in areas with widespread electricity theft – it translates into R4.95 billion in lost revenue for Eskom.
Illegal connections have been a problem for years in South Africa. Apart from hurting Eskom financially, it causes serious damage to the country’s power infrastructure.
Last year Eskom revealed that there was a backlog of 455 transformers and mini substations that must be replaced, all damaged by overloading caused by illegal connections.
The average price of a transformer is around R80,000, while a mini substation costs over R300,000.
The power utility suffered losses of R1 billion in equipment failures in Gauteng alone during 2019/20.
Illegal connections became so overwhelming that Eskom had to start implementing load reduction to protect electrical infrastructure against damage due to overloading.
Load reduction typically lasts four hours in peak usage times and typically runs between 05:00 and 09:00, or 17:00 to 21:00 in the evening.
It differs from load-shedding as it targets specific areas which are prone to superfluous illegal connections, instead of being implemented on a national scale.
This strategy is working. Since load reduction was introduced, Eskom has seen a drop of more than 60% in equipment failures.
This means the power utility has saved millions by not having to regularly replace equipment damaged by overloading.
In South Africa there are different prices for different areas. Regions where load reduction are implemented generate significantly less revenue.
Eskom said it generates around half the revenue for the same consumption in these areas when compared to affluent suburbs like Sandton.
The average Homelight 20A / 60A tariff for low consuming supplies in townships is R1.41/kWh. Most township consumers also receive limited free basic electricity units.
The average Homepower tariff for residential customers in urban areas with notified demand up to 100kVA, is R2.38/kWh.
“In a nutshell, consumers in places like Sandton pay significantly more per unit than the average township areas,” Eskom said.
Apart from the lower price and free electricity, far fewer households in areas where load-reduction are implemented are paying for electricity because of illegal connections.
The overall revenue generated per kWh delivered in these areas is therefore much lower than in other areas.
Add to that the destruction of infrastructure and hostility towards Eskom technicians, and it is easy to see why load reduction is needed.