BUSINESS NEWS - Eskom hopes its proposed retail tariffs for 2021 will help solve a looming problem triggered by increased solar generation across the country.
It cites a research study that projects between R3.5 billion and R4 billion in revenue will be lost to photovoltaic (PV) solar generation by the end of this year. Many would argue these numbers are on the low side.
The shift to solar generation by business and households has resulted in two major problems for Eskom.
First, it says “customers using PV systems during the day results in drop in the demand for electricity during the day – with the highest drop in system demand in the middle of the day. This midday demand drop (called the ‘duck curve’) affects the power system negatively, as it means that the generators have to ramp up at an even faster rate than before to meet the evening peak demand”.
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As solar usage increases, so demand during the day will continue to decline, including a flattening of the morning peak. This causes an ever-increasing ramp up to the evening peak.
Second, because existing tariffs are largely variable-usage based (charged per kilowatt-hour), Eskom argues that they do not adequately “reflect the fixed costs and also the demand a customer imposes on the network”.
As customers move to solar, Eskom contends they could become a “zero net or very low net” consumer as they feed excess power back into the grid during the day. Because they still use the network, this resultant “loss of revenue” will not be commensurate with a reduction in costs.
Eskom says “it also results in customers with PV being subsidised by customers without PV”.
The utility argues that its current tariff structure has caused this.
