Eskom is looking at new ‘critical peak’ billing – here’s how it works

Eskom is looking at testing a new ‘critical peak day tariff’ to deal with increased electricity demand.

Speaking to BusinessTech, the power utility said that it had previously applied to the National Energy Regulator of South Africa (Nersa) to have the tariff approved, but was turned down.

However, it said that it now intends to revive the tariff and pilot it further as a voluntary customer option to assist with demand management on electricity-constrained days.

“Critical Peak Day pricing is a tariff option that has been internationally proven to reduce load on specific days when the system is extremely constrained,” it said.

“This is achieved by increasing the electricity price on these system-constrained days (critical peak days) and lowering the prices (compared to the normal tariff) on non-constrained days.”

Eskom said that it will notify customers ahead of time about critical peak days.

“The Critical Peak Day tariff option provides customers with the flexibility to partner with Eskom in a win-win situation for both. If customers choose to reduce their electricity consumption on critical peak days, the customers can save on the electricity bill,” it said.

Constraints

Due to the current constraints, Eskom said it aims to revive a pilot for this tariff option to all large power tariffs and potentially for residential customers.

Using this tariff, it said it hopes to achieve at least a 50MW load curtailment on critical peak days on the pilot.

“This will be an option for the system operator before load shedding is implemented. The principles of tariff will need to be updated bases on more recent forecast and revenues,” it said.

“An option will also be considered to have shorter critical peak hours. The number of critical peak days will limited per customer (e.g. not more than 20), and be predetermined by the System Operator, with a minimum of a day-ahead notification.”

The below graph gives a more detailed breakdown of how the system would work.

Eskom reiterated to BusinessTech that this system would not be mandatory and that customers would be able to opt-in.

“If Eskom does decide to revive this tariff and if the customer wants to be part of the pilot, they will be put on the critical peak day tariff and be billed accordingly,” it said.

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