South Africa’s plan to pay R3 million for every megawatt saved — and add 3,800MW to the grid

Electricity minister Kgosientsho Ramokgopa says South Africa should be able to bring 3,800MW of additional generation capacity onto the grid in the near future, with 400MW expected to come online by the end of May 2023.

During a media briefing on the progress of the Energy Action Plan, the minister also announced incentives for companies and households that can reduce their electricity demands.

“Eskom has an open application for the Distribution Demand Management programme, which provides a financial incentive for demand reduction by commercial and residential customers,” said Ramokgopa.

He explained that this forms part of government’s commitment to make demand-side distribution a focal point in its Energy Action Plan.

“Demand-side interventions are going to be a focal point as we enter into December, because the initiatives at household level are cheaper and faster,” he said.

He explained that the programme provides a R3 million incentive for every megawatt saved through reduced demand.

“It’s aimed at ensuring that we are able to achieve the demand reduction during specified periods, and this will typically be during periods of peak [demand],” Ramokgopa stated.

He said this would help attenuate peak demand to better match generation.

“The amount of load-shedding that would be affected at that time will not be as severe,” Ramokgopa added.

The minister said the programme should bear fruit rapidly once government has “aggregated the number of households and companies that are participating”.

“We want to give you the degree of assurance to ensure that those that are deserving are the ones that are going to receive this incentive, so that we are able to minimise any form or opportunity of leakage,” he added.

The minister said the incentive would be granted based on the relative reduction in usage to a verified baseline. All applicants will be subject to an independent measurement against that baseline.

“So Eskom will be able to provide some degree of independent review to make sure that there’s no abuse of this system,” he added.

Ramokgopa said the National Energy Regulator of South Africa (Nersa) would, on 19 May, hold public hearings on the ministerial determination for three of the National Energy Crisis Comittee’s (Necom) initiatives.

“The last time we were here, we did indicate that, as part of the Necom initiative going into the winter period, there’s a number of programmes that are receiving elevated attention,” he said.

“I’m happy to announce that Nersa will be holding public hearings on the ministerial determination for three of Necom’s initiatives on the 19th of May.

“This is to ensure that there’s concurrence, because this ministerial determination must receive Nersa concurrence, and Nersa is engaging in the process to ensure that we are able to announce to the country these measures,” the minister added.

The three initiatives the minister referred to revolve around load-shedding reduction, cross-border power purchases, and emergency generation programmes.

“These three programmes, once we are able to obtain Nersa’s concurrence, should be able to give us a cumulative figure of 3,800[MW] of new generation capacity,” said Ramokgopa.

The minister also revealed that contracting had been finalised for 400MW of additional generation capacity through the Standard Offer programme, which will be online before the end of the month.

“We want to bring this 400MW online just in time for the winter period,” he added.


Now read: How Eskom is avoiding Stage 7 load-shedding

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South Africa’s plan to pay R3 million for every megawatt saved — and add 3,800MW to the grid