Solar Triumphs Are Bad News For Eskom

According to a recent report, Eskom is expecting a drop in revenue due to recent changes to the amendment of section 2 of the Electricity Regulations Act published on 10 August.

By opening up the door to more independent energy, the door will also be opened for investment which the department of public enterprises estimates to be at about R120-billion, in addition to creating much needed jobs. While these changes will cut into Eskom’s revenue, the power utility aims to offset the potential loss of revenue posed by the new threshold using measures such as persuading investors to put capital into evacuated infrastructure, like the decommissioned coal-fired power stations, according to the chief executive André de Ruyter.

According to the report in Mail & Guardian, the Council for Scientific Industrial Research analysis, raising the licensing threshold to 50MW would unlock about 3 300MW to 7 400MW of new energy (likely estimate: 5 300MW). A higher threshold of 100MW is likely to unlock additional capacity, but result in fewer projects of a larger size. President Ramaphosa’s announcement in June regarding the regulation changes increase the licensing threshold to double that.

The energy department has set up a 2 000MW emergency energy procurement programme because of an anticipated shortfall of between 4 000MW and 6 000MW over the next few years at Eskom.

With the implementation of the new threshold for independent power generation which allows Eskom’s biggest customer to turn to self-generation up to 100 megawatts of power for their own operations without licensing, it is expected that the demand pressure will be taken off Eskom’s already strained supply which will reduce the need for scheduled power cuts or load shedding which have affected the economy since 2008.