SA businesses face Eskom’s extra “winter months” charge
South African businesses will pay extra for electricity within the coming months, when Eskom implements its anticipated winter rates between June and August, on top of annual price increases, says Heather McEwan, MD of sustainability company Rhino Group.
“Electricity bills will rise even further in July, when the annual increase kicks in on top of the winter prices. So, after August, when the winter rates fall away, consumers will still be paying more for electricity due to the annual escalation,” she said.
In February, the National Energy Regulator of South Africa (Nersa) approved a maximum 2.2% electricity tariff increase by Eskom for the 2017/18 period, and recently capped municipal electricity tariff increases at 1.88%.
“In effect, Eskom sells electricity at wholesale prices to municipalities, which in turn add their own ‘retail mark-up’ when reselling to consumers,” explained McEwan, adding that municipalities had until the deadline of 1 June to contest the decision.
“Eskom could also still contest the Nersa ruling, which acts as a handbrake on spiralling energy costs. Even so, it has allowed an average annual price increase of 18.1% since 2008, and costs will continue to rise in the future.”
Saving money
In the wake of the rising costs, business, retail and industrial users are turning to energy-saving technologies to mitigate the higher Eskom charges, said McEwan.
“Energy, like labour, is now becoming a huge cost for businesses, which will impact on their bottom line. It’s essential to become pro-active and have a long-term strategy in place to deal with it.”
While many businesses had already begun to retrofit lighting with energy-saving LED options, McEwan said lighting accounted for only 10 to 20% of the total energy load.
“As a first step, companies need to undertake a full energy audit to look at the bigger picture and to see where the opportunities to reduce the electricity bill lies. Installing a voltage optimisation system, for example, could save an average of 10% of the total electricity load coming into a retail or industrial site.”
She noted that Eskom transferred electricity at a voltage higher than the required 220V, to accommodate for losses and fluctuations along the transmission lines.
“The consumer is paying for this excess voltage, which can also cause equipment to overheat and ultimately lead to breakdowns and failure.”
McEwan said the plethora of products on the market could be confusing to consumers and that it was advisable to consult an energy specialist who could advise on the best quality options for a particular industrial or retail environment.
“You’re not going to solve your energy problem overnight – it’s a strategic journey. Small, incremental changes – like coating steam pipes to prevent heat loss in a factory – can lead to significant savings over a number of years.”
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