Eskom is piloting the renewable energy pricing program
Eskom CEO André de Ruyter.
Electricity company Eskom has launched the Renewable Energy Tariff pilot program, aimed at helping companies that have made renewable energy commitments.
In a statement released today, Eskom says the move enables organizations to source mixed electricity, with up to 100% of their electricity coming from one of the utility’s renewable sources.
Today’s announcement comes after the power company yesterday released its results for the fiscal year ended March 2021.
Eskom’s performance during the period has been difficult under difficult circumstances, the state-owned company said.
The utility reduced its gross debt by R81.9 billion, a reduction of 16.9%, to an outstanding amount of R401.8 billion. The organization’s debt has remained unsustainable, attracting a net finance cost of R31.5 billion, turning an operating profit of R5.8 billion into a loss of R18.9 billion after tax, according to the society.
The Renewable Energy Tariff pilot program provides organizations with a mechanism to meet their renewable energy commitments to purchase that energy from Eskom, without the initial capital investment of having to own a renewable energy generator. or enter into long-term power purchase agreements.
According to the company, this offering allows organizations to have a 24-hour mixed renewable supply in their facilities and allows them to relocate premises without having to relocate renewable energy assets.
Short-term electricity purchases
Eskom produces green electricity from some of its renewable power plants, such as the Sere wind farm and run-of-river hydroelectric facilities.
It notes that the pilot renewable energy tariff program is initially limited to renewable electricity produced from the Sere wind farm and only available to Eskom customers.
During the pilot program period, Eskom offers a maximum of 300 GWh per year to customers supplied directly by Eskom, on a first come, first served basis, he notes.
Monde Bala, Group Director of Eskom Distribution Division, explains: “The Renewable Energy Tariff is designed to provide a cost effective and flexible option for Eskom customers to consume renewable energy.
“It also offers flexible, convenient and short-term electricity purchases when you move your facilities. It will be available to customers supplied by Eskom with up-to-date electricity accounts.
Bala says the tariff will be available to Eskom’s business customers who have green goals and want to use renewable energy in their facilities or production processes.
All participating customers will have the option to select any percentage of their current electricity use as green, the parastatal said.
He notes that the renewable energy tariff may also supplement electricity on wheels from a third party or have renewable electricity generated on-site to help customers meet their clean energy goal.
The tariff is designed as a sliding scale block tariff, Eskom explains, noting that this means that the more a customer purchases green energy (as a percentage of total consumption), the lower the tariff. More details on the tariff pilot are available from Eskom website.
Eskom customers therefore have the option of choosing an affordable contract, which is billed monthly, based on the percentage of renewable energy they consume, and this percentage will be billed monthly as specified in the contract.
After 12 consecutive months, Eskom will assess the amount of renewable energy in kWh consumed against the contractual percentage, and if the actual capacity is less than the contractual 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 bill will be adjusted to reflect the difference.
Eskom’s pilot renewable energy tariff program will run for a two-year period ending March 31, 2023, after which the company will make the decision whether or not to submit the tariff for formal approval.
Unprecedented drop in sales
In its results yesterday, Eskom said it achieved operating cost savings of R14.4 billion in the year under review, compared to a target of R14.1 billion.
Although sales volumes declined, primary energy costs rose 3.4% to R115.9 billion. Normalized operating expenses increased 1.6%.
“Like the overwhelming majority of South African businesses, Eskom has not been spared the worst effects of the COVID-19 pandemic,” said André de Ruyter, CEO of the Eskom Group.
“The slowdown in economic activity due to the pandemic led to an unprecedented decline in sales, which fell 6.7% from the previous year. Unfortunately, the losses suffered by Eskom from the COVID-19 pandemic were not limited to our finances.
“We have also lost 153 of our colleagues due to the pandemic, including 17 subcontractors, as of Friday, August 27, 2021. Our sincere condolences go out to the affected families,” says De Ruyter.
“Operationally, however, every crisis brings an opportunity. In this case, Eskom used the unfortunately lower demand presented by the lockout to perform much needed maintenance in some of our power plants. “
Revenue increased to Rand 204.3 billion during the year, from Rand 199.5 billion the previous year. This is mainly attributed to an 8.76% annual increase in the electricity tariff during the period, offset by a 6.7% reduction in sales volume.
Primary energy costs increased by R3.8 billion, mainly due to a R3.1 billion increase in renewable PPIs due to increased production of these PPIs, according to the company. State.
The energy availability factor deteriorated to 64.19% against 66.64% the previous year. This is a direct consequence of the implementation of the reliability maintenance program, requiring more planned maintenance, he explains.
Giving an overview of the organization’s performance, De Ruyter states that Eskom’s long-term goals for achieving operational and financial sustainability depend on the successful implementation of the turnaround plan currently underway.
“The turnaround plan, overseen by a diverse executive committee, 56% black women, focuses on resuming operations, improving the income statement, strengthening the balance sheet, separating businesses and establishing of a winning and dynamic culture, ”says De Ruyter.