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12 January 2025
My Broadband
Warning To People With Solar
Original Article By Daily Investor
South Africans with solar installations must update their insurance policies to protect their investments and manage risks. Solar panels, inverters, and batteries add significant value to properties, requiring updated insurance to avoid underinsurance. Using qualified installers ensures compliance, aiding claims in case of issues. With solar systems increasingly targeted by criminals, anti-theft measures and insurance against theft and malfunctions are essential.
Power surges from load-shedding or grid issues also pose risks. Many policies now require additional premiums for surge protection, making it crucial to consult with insurance advisers. Proper coverage safeguards against costly repairs and damage to appliances. While alternative energy offers long-term savings, ensuring installations are correctly insured is vital to protect these investments.
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10 January 2025
My Broadband
Legal Fight Threatens Return of Load-Shedding
Original Article By Myles Illidge
GroundWork Trust and Earthlife Africa are suing the South African government for allowing Eskom to delay compliance with air pollution standards at eight coal-fired power stations until 2030. The environmental groups argue that adherence to the minimum emissions standards (MES) could save $41.7 billion (R790 billion) by reducing health and environmental costs. They claim Eskom has failed to provide mandatory decommissioning schedules, making it impossible to assess risks or ensure proper mitigation.
Eskom warns that complying with MES would require either shutting down non-compliant power stations or spending R300 billion to retrofit them with flue-gas desulphurisation technology, leading to potential Stage 8 or higher load-shedding and steep tariff increases. Former CEO André de Ruyter estimated compliance could raise electricity costs by 30%, while failing to secure exemptions could intensify the energy crisis. Environmental advocates, however, argue that the financial and health benefits of compliance outweigh the potential economic disruptions.
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2 January 2025
BusinessTech
Social Unrest Warning Over Electricity Prices
Original Article By Seth Thorne
Energy and Electricity Minister Dr. Kgosientsho Ramokgopa has raised alarm over South Africa’s escalating municipal debt and unaffordable electricity prices, calling them a “ticking time bomb” that threatens national stability. Speaking at an Energy Action Plan briefing, he highlighted the progress in Eskom’s operations, including over 200 days without load-shedding and efforts to reach a 70% energy availability factor. However, the minister underscored that the R92 billion owed to Eskom by 75 municipalities—up R19 billion since March 2024—poses a critical challenge. He noted that steep electricity tariffs leave many South Africans, particularly pensioners and low-income households, unable to afford basic energy needs, exacerbating poverty and risking social unrest.
Read full article here
2 January 2025
BusinessTech
Eskom Getting Replaced
Original Article By BusinessTech
Eskom’s annual financial results for 2024 highlight a worsening crisis as electricity sales plummet and costs soar. Sales dropped from 198 GWh in 2022 to 183 GWh in 2024, while expenses like diesel reached R33.9 billion. With a staggering after-tax loss of R55 billion and municipal debt forecast to hit R110 billion by 2025, Eskom faces immense financial strain. CEO Dan Marokane emphasized the need for cost-reflective tariffs to sustain operations and attract investment. However, such price hikes risk accelerating customer migration to cheaper, renewable energy solutions like solar power.
Experts, including former Eskom CEO André de Ruyter, warn that Eskom is in a “death spiral,” with paying customers turning to alternatives, leaving the utility with non-paying clients. Renowned economist Dawie Roodt predicts Eskom’s growing irrelevance, likening its trajectory to South African Airways. The shift toward private energy suppliers suggests a gradual privatization of electricity generation in South Africa, reducing reliance on Eskom in the future.
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December 2024
News Archives
President Cyril Ramaphosa has set 1 January 2025 as the official start date for the Electricity Regulation Amendment (ERA) Act, which aims to reform South Africa’s electricity market. The Act introduces a competitive energy market, breaking Eskom’s longstanding monopoly over electricity production, transmission, and distribution. A key feature is the establishment of an independent system and market operator (TSO) to oversee fair electricity wheeling between Eskom and private producers. While most provisions are proceeding, Ramaphosa has delayed the implementation of a contentious clause defining “reticulation,” which municipalities argue could undermine their constitutional authority to distribute electricity.
Municipalities, represented by Salga, fear the clause will threaten their revenue streams, as electricity sales fund essential services. They have expressed their intent to challenge the bill, citing potential financial instability for municipalities. Despite these concerns, energy experts and business leaders broadly support the bill, which is seen as vital for reducing Eskom’s dominance and enabling diverse energy production. Nersa’s expanded licensing role will allow more entities to enter the market, with producers competing on pricing, fostering investment and innovation in South Africa’s energy sector.
Read full article by My Broadband here
Eskom’s initial investigation into the explosion at Matla Power Station Unit 6 on 12 December 2024 points to a ruptured high-pressure steam steel pipe as the cause. The explosion led to a loud bang, power loss in the Unit 6 area, and a dust cloud that delayed assessment until the next morning. Nine employees suffered burn injuries, with one in critical condition and two semi-critical, though all are stable. The incident also prompted counselling for affected staff and their families. Unit 6 remains offline, while Unit 5 was pre-emptively shut down ahead of scheduled maintenance.
Matla is a key focus of Eskom’s Generation Recovery Plan, and disciplined investigations will guide the restoration of Unit 6.
Read full article by My Broadband here
Eskom has declared all unregistered grid-tied solar power systems “illegal,” even if they do not feed electricity back into the grid. The utility has begun requiring homeowners with such systems to install additional equipment and register their systems at significant cost. Compliance includes updating the Certificate of Compliance (CoC) to meet Eskom’s stringent criteria, conducting structural assessments, and installing isolation points near Eskom meters. Customers are also required to switch to the mandatory Homeflex time-of-use tariff. Costs for these upgrades range from R27,000 to R50,000, creating a financial burden for many solar users.
For households unwilling or unable to meet these requirements, going entirely off-grid might be a cheaper alternative. Upgrading inverters, batteries, and panels—or adding a backup generator—could allow users to disconnect from Eskom and avoid compliance fees. This push for stricter enforcement may drive more South Africans to invest in self-sufficient energy systems, reducing their reliance on the grid while exacerbating Eskom’s revenue challenges
Read full article by My Broadband here
Eskom’s proposed tariff changes could significantly increase electricity bills for households with low to moderate consumption, potentially exceeding a 50% rise. Its 2025/2026 Retail Tariff Plan (RTP) and a 36.15% tariff hike application will disproportionately impact smaller users, with costs for 200kWh users doubling and 450kWh users seeing a 67% increase. These changes stem from Eskom’s push for “cost-reflective” tariffs, restructuring fixed and variable charges to recover operating costs.
Critics argue that the changes unfairly penalize lower-income households and solar users who rely less on grid power. The proposed fixed charges mean households consuming below 764kWh monthly will pay more, contradicting Eskom’s claim of average savings. Public feedback on the RTP is open until 17 December 2024, with decisions expected by early 2025. If approved, these adjustments could create significant financial burdens for many South Africans.
Read full article by My Broadband here
November 2024
News Archives
Eskom faced criticism after its late push to update 11 million prepaid meters to Key Revision Number 2 (KRN 2) caused chaos, long queues, and tragic outcomes. The update, needed to prevent meters from becoming inoperable due to token expiration on 24 November 2024, was poorly communicated, with many customers receiving notifications just days before the deadline.
While updates can still be completed after the deadline, misinformation and insufficient preparation sparked unnecessary panic. Criticism arose over Eskom’s handling of illegal electricity users, who were granted an extension. As of the deadline, nearly 2 million meters remained un-updated, exposing planning and communication failures.
Eskom’s proposed Retail Tariff Plan (RTP) will disproportionately increase electricity costs for small and medium-sized households, while those using over R2,793 worth of power per month will see reductions. Eskom plans to scrap the Incline Block Tariff (IBT), which currently penalizes high usage, and introduce higher fixed charges regardless of consumption. This approach has been criticized for burdening low- and moderate-consumption users, including many who installed solar power due to Eskom’s unreliable supply. Eskom claims the changes aim to rebalance tariffs, but critics argue they unfairly target smaller households and fail to reflect South Africa’s average household electricity use, which independent estimates suggest is far below Eskom’s 900kWh claim.
The proposed plan could raise bills for households consuming 450kWh per month by 22.3% and those using 600kWh by 16.1%, while users consuming 764kWh or more will pay less. Indigent households reliant on free basic electricity may also face challenges due to outdated allocations and poor municipal registration.
Eskom is urging prepaid electricity users to update their meters before 24 November 2024 to avoid losing power. Meters still using Key Revision Number 1 (KRN1) will stop accepting electricity tokens after this date. Once current credits are used up, these meters will become inoperable unless updated, potentially requiring replacements costing up to R12,000.
Users must buy tokens from authorised vendors before the deadline to ensure continued service. This will generate two 20-digit codes required to update the meter. Community support teams are available to assist with the recoding process.
Independent Power Producers (IPPs) now offer electricity far cheaper than Eskom, with solar and wind prices dropping to around R0.56 per kWh in recent bid windows, compared to Eskom’s R1.50 per kWh in 2023. Rising costs from corruption, inefficiency, and bloated staffing have pushed Eskom’s prices well above inflation.
With South Africa’s energy market opening to private providers under the new Electricity Regulation Act, IPPs are becoming more attractive to households, businesses, and municipalities. As customers switch to cheaper alternatives, Eskom faces shrinking revenues, escalating tariffs, and the risk of a worsening financial “death spiral.”
Eskom’s municipal debt has skyrocketed from R2.6 billion in 2014 to nearly R90 billion, severely threatening its financial stability. The debt continues to grow by roughly R2 billion monthly, with forecasts indicating it may reach R200 billion by 2028. Eskom CFO Calib Cassim warns that this trend could nullify the government’s R254 billion debt relief and force Eskom to seek further bailouts.
Despite government incentives, only a fraction of municipalities have met debt relief requirements, with many unable to cover their current electricity costs. Recently, Eskom threatened to cut power to the City of Johannesburg over an unpaid debt of R4.9 billion. The standoff eased only after intervention by the Electricity and Energy Minister, highlighting Eskom’s ongoing challenges with non-payment from municipalities despite numerous debt management efforts.
Eskom has proposed a new Retail Tariff Plan with significant changes to its electricity pricing structure. Among the key adjustments are the removal of the Inclining Block Tariff (IBT) for residential customers, new tariff rules for households with solar panels, and reduced charges for municipal distributors and large commercial users. The aim, according to Eskom, is to align tariffs with the actual costs of electricity generation, transmission, and distribution, ensuring that customers only pay for the services they use.
For solar users, the new plan means those who rely on Eskom as a backup source will still pay network usage fees but can now earn credits for excess energy fed back into the grid. Municipalities will see a simplified tariff structure with three options instead of the previous fifteen, making costs more predictable.
The City of Cape Town (CoCT) has faced criticism over the high costs associated with installing bidirectional meters for its cash-for-power programme, which allows consumers to sell excess solar power back to the grid. While the city introduced a more affordable single-phase meter at R6,043 in 2024, participants have found that additional costs, such as “meter accommodation” and underground cabling, have inflated the overall price. Some residents reported quotes ranging from R10,000 to R30,000 for the required electrical work, making the financial benefits of selling excess power less attractive.
Kadri Nassiep, CoCT’s executive director of energy, urged consumers to shop around for better prices, stating that labour costs drove up the expenses rather than the materials. However, the added financial burden has made it harder for many households to justify joining the initiative.
Critics like public policy expert Alex van den Heever argue that Eskom’s approach of repeatedly raising tariffs to solve its financial woes, with real increases of 300% since 2007, is unsustainable. Eskom’s justifications, including rising coal prices, diesel costs, and maintenance expenses, have not addressed its deeper organizational inefficiencies or inability to collect revenue. Van den Heever emphasized that while a policy change might help, a more sustainable economic model for Eskom is essential to avoid further financial decline and social unrest, especially among poorer communities already burdened by escalating costs.
October 2024
News Archives
Eskom faces a financial crisis as major customers reduce their reliance on its grid power, forcing the utility to compensate for lost sales through substantial tariff hikes. This trend has led to a “death spiral” of dwindling paying customers, as more South African households and companies turn to solar to avoid price increases and load-shedding.
Compounded by an escalating debt burden from municipalities—now at R85 billion and expected to reach R200 billion by 2028—Eskom’s financial sustainability is at risk. CFO Calib Cassim warned that without solutions to stem rising municipal debt, government debt relief will have a limited impact on Eskom’s long-term viability.
Energy expert Chris Yelland believes Eskom should focus on transmission and exit its generation and distribution businesses. With growing competition from independent power producers (IPPs) offering cheaper, renewable energy, Eskom’s rising tariffs, including a proposed 36.15% hike in 2025, make it less competitive.
Yelland warns Eskom’s strategy of increasing tariffs will lead to a “death spiral” of reduced sales and rising debt. He suggests that Eskom should leave the generation to private players and focus on its transmission division, which has been spun off as the National Transmission Company of South Africa (NTCSA).
Recent data shows that Eskom’s claim of 30kWh daily electricity consumption per household is significantly inflated. Independent sources, such as the US Energy Information Administration (EIA) and solar companies, estimate South African households consume between 6kWh to 15kWh per day. This lower consumption challenges Eskom’s justification for its proposed cost-reflective tariffs, which include higher fixed costs and lower variable charges.
Eskom’s tariff changes would disproportionately affect low-consumption households, increasing their bills by up to 82%, while high-consumption users would benefit. This pricing model could worsen the financial burden on lower-income families, raising concerns about fairness as Eskom continues advocating for its tariff structure under Nersa’s review.
Recent data shows that Eskom’s claim of 30kWh daily electricity consumption per household is significantly inflated. Independent sources, such as the US Energy Information Administration (EIA) and solar companies, estimate South African households consume between 6kWh to 15kWh per day. This lower consumption challenges Eskom’s justification for its proposed cost-reflective tariffs, which include higher fixed costs and lower variable charges.
Eskom’s tariff changes would disproportionately affect low-consumption households, increasing their bills by up to 82%, while high-consumption users would benefit. This pricing model could worsen the financial burden on lower-income families, raising concerns about fairness as Eskom continues advocating for its tariff structure under Nersa’s review.
Eskom will implement significant electricity price hikes in 2025 due to rising operational costs, particularly in coal procurement and diesel usage for peak demand periods. The utility has already committed to paying contracted coal amounts, leaving it with little flexibility despite concerns about affordability and potential non-payment from consumers. Eskom’s COO, Calib Cassim, explained that even if the regulator disallows some costs in the revenue application, the utility must still cover these expenses, further complicated by restrictions on borrowing for operational costs due to its debt relief from the National Treasury.
The proposed price hikes include a 36.15% increase for direct customers starting in April 2025, and a 43.55% increase for municipal customers from June 2025.
September 2024
News Archives
August 2024
News Archives
Recent legal challenges have highlighted the flaws in Nersa’s approach, with courts ruling that tariff hikes implemented without proper cost-of-supply studies are unlawful. AfriForum’s successful litigation against Nersa’s approval of municipal price increases exposed administrative failures and non-compliance, as many municipalities lacked the necessary studies to justify hikes. These issues have contributed to significant municipal debt to Eskom, exceeding R78 billion, and have created operational and financial challenges across the energy sector. Reforming Nersa’s regulatory framework is essential to ensuring fair and sustainable electricity pricing in South Africa.
To address these issues, Eskom is focusing on both training new engineers and bringing back experienced professionals through a partnership with the private sector, initiated by President Cyril Ramaphosa. This collaboration aims to redeploy experts to key power stations to improve reliability and increase power output. The initiative is part of broader efforts to stabilize South Africa’s energy sector and stimulate economic growth by addressing critical energy, transport, and infrastructure challenges.
The National Energy Regulator of South Africa (Nersa) has rejected Eskom’s application to reserve grid capacity for renewable energy projects under the public procurement program. This decision has raised concerns within the South African Wind Energy Association (SAWEA), which fears it could jeopardize the future of renewable energy in the country.
SAWEA is calling on Eskom and Nersa to address the grid allocation issues that are undermining the development of renewable energy and the open electricity market envisioned by the Electricity Regulation Act Amendment Bill. The association stresses the importance of collaboration between the industry and the Department of Electricity and Energy to ensure a sustainable and economically viable energy future for South Africa.
Read the full article by My Broadband here
South Africa holds the highest potential for job creation in Africa within the solar and wind energy value chains, according to the Forecasting Green Jobs in Africa report. The study, conducted by Shortlist, FSD Africa, and Boston Consulting Group, highlights that South Africa, Kenya, and Nigeria collectively represent 16% of the continent’s job creation potential, driven by factors such as population size, GDP, and industry maturity.
The report anticipates the creation of up to 3.3 million new green jobs across Africa, with the majority concentrated in the renewable energy sector, particularly solar power. Specifically, 85,000 to 275,000 new green jobs in South Africa are forecasted by 2030, primarily in energy and power production, agriculture and nature. Of these, 140,000 jobs are expected to be in the solar sector alone.
Read the full article by IT Web here
The Democratic Alliance (DA) is calling for an urgent parliamentary debate regarding the rising cost of electricity in South Africa. This comes after the National Energy Regulator of South Africa (NERSA) approved Eskom’s request to recoup R8 billion from consumers for the 2021/22 financial year, which will result in a 4% increase in electricity costs.
DA’s Kevin Mileham points out that this increase is in addition to a proposed 36.15% tariff hike that Eskom is expected to request for 2025. Mileham has written to Speaker Thoko Didiza urging for immediate discussion, emphasizing the need for swift government intervention in response to the energy price crisis, which he attributes to Eskom’s inefficiency.
Read the full article by iAfrica here.
Eskom recently announced that it has pre-coded the majority of its prepaid electricity meters, a move that could expedite the updating process and serves as a warning to those buying electricity illegally. South African municipalities and Eskom are racing to update 11.53 million prepaid meters before 24 November 2024. On this date, prepaid meters that haven’t been recoded with two key revision numbers (KRNs) will no longer accept tokens, due to a timer-linked security mechanism in the tokens.
Eskom’s pre-coding prepares meters for the issuing of recoding tokens, but customers must still manually enter the codes to keep their meters functional. As of 1 August 2024, about 4.01 million Eskom customers had updated their meters, leaving 2.89 million still needing updates. The daily update rate has decreased significantly, suggesting a need for a substantial increase to meet the deadline.
Read the full article by My Broadband here
Read the full article by My Broadband here
July 2024
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