- South Africa’s state owned energy utility, Eskom, has launched the Renewable Energy Tariff pilot programme to assist many businesses who have corporate renewable energy commitments.
- This enables customers to source a blended electricity supply with up to 100% of their electricity from one of the utility’s renewable sources.
The Renewable Energy Tariff pilot programme gives customers a mechanism to achieve their renewable energy commitments to purchase this energy from Eskom, without the initial capital investment of having to own a renewable energy generator or to enter into long term Power Purchase Agreements (PPAs). The offer allows customers to have a 24-hour blended renewable supply to their facility, and allows them flexibility to relocate premises without needing to move renewable energy assets.
Eskom generates green power from some of its renewable electricity plants such as the Sere Wind Farm and run-of-river hydro facilities. The Renewable Energy Tariff pilot programme is initially limited to renewable electricity generated from the Sere Wind Farm and only available to Eskom’s customers. During the period of the pilot programme, Eskom offers a maximum of 300GWh per annum to customers supplied directly by Eskom, on a first-come-first-served basis.
Monde Bala, Group Executive Eskom Distribution Division explains, “The Renewable Energy Tariff is designed to provide a cost-effective and flexible option for Eskom customers to consume renewable power.It further provides flexible, convenient and short-term power purchases for when you move your facilities. It will be available to Eskom supplied customers whose electricity accounts are up to date.”
Bala says the tariff will be available to Eskom business customers who have green targets and who would like to use renewable power in their facility or production processes. All participating customers will have an option to select any percentage of their current electricity usage to be green. The Renewable Energy Tariff can also supplement wheeled electricity from a third party or own renewable electricity generated on site to help customers achieve their clean energy target.
The tariff is designed as a declining block tariff. This means that the more green energy a customer purchases (as a percentage of total consumption), the lower the rate. More detail on the tariff pilot is available from the Eskom website HERE
Eskom customers therefore have an option to select an affordable contract, which is charged monthly, based on the percentage of renewable energy they consume, and this percentage will be charged monthly as specified in the contract. At the end of 12 consecutive months, Eskom will evaluate the amount of renewable energy in kWh consumed against the contracted percentage, and if the actual capacity is less than the contracted capacity, Eskom will adjust the Renewable Energy Tariff based on the actual percentage. The renewable energy charge payable by the customer will be adjusted accordingly. The customer’s next electricity account will be adjusted to reflect the difference.
Eskom’s Renewable Energy Tariff pilot programme will last for a two-year period ending 31 March 2023, after which the company will make a decision whether to take the tariff for formal approval.
Author: Bryan Groenendaal