Eskom to pay R3 million for every megawatt saved

Electricity minister Kgosientsho Ramokgopa says that Eskom is getting ready to ramp up its demand-side energy management (DSM) programme to help ease pressure on the national grid.

According to Ramokgopa, his team is getting ready to meet with the South African Property Owners Association (SAPOA) to discuss measures that can be implemented to help conserve power.

He said that Eskom is extending its DSM programme to commercial and residential users, which will contract qualifying groups to assist Eskom in load curtailment.

The programme is currently running with the industrial sector, which sees big energy users cut off as much as 20% of their power usage when requested to ease demand. In turn, the contracted groups get a financial incentive.

Ramokgopa said that the financial incentive that will be offered through the programme is R3 million for every megawatt spared. He said the programme will be moving forward, and only qualifying and “deserving” groups will receive the incentive.

The applicants will provide the baseline, and relative to this baseline, the energy saved will be incentivised.

All applicants will be independently reviewed and verified, he said, and the proposed baseline will be carefully analysed to prevent abuse or “leakage”.

The minister said that the DSM will become vital heading into December as it’s easier and cheaper to manage household demand – and it’s faster.

“Once we aggregate the number of organisations and households participating, we are likely to see this coming to fruition rapidly,” he said, adding that this will ensure demand reduction during specified peaks.

Through the DSM programmes, Eskom has so far been able to avert national stage 7 and stage 8 load shedding.

While the group had shed between 6,000MW and 7,000MW on several days over the last few months, it has managed to keep load shedding schedules at stage 6 by only shedding 6,000MW from the grid and reducing the balance through DSM load curtailment.

Electricity-intensive organisations are subjected to four stages of load curtailment:

• Stage 1 and stage 2: companies are required to reduce 10% of their power consumption
• Stage 3: companies are required to reduce 15% of their power consumption
• Stage 4: companies are required to reduce 20% of their power consumption

He said that a lot of municipalities are on board with demand-side management, but noted that to cut one stage of load shedding, around 200,000 households need to commit to the programme.

There will also be another push in residential areas to boost rooftop solar.

The minister said that SAPOA has around 100 million square metres of rooftop space available for energy generation. But its own calculations, using just 50% of this space could secure 9,500MW in generation capacity.

This wouldn’t require state funding, he said, as the commercial banks can be approached for this – but the government needs to work to resolve issues like feed-in tariffs and other regulatory issues. This is being processed by the National Energy Crisis Committee (Necom), he said.

As winter approaches, however, South Africa’s energy demands require urgent action.

Necom and energy regulator Nersa and moving ahead with three programmes to secure 3,800MW of new generation capacity – however, in the immediate term, Ramokgopa said that Eskom is moving to secure at least 400MW on energy through its “standard offer programme”.

This is in place to try and mitigate some of the load shedding issues in winter, where the energy demand is expected to hit between 34,000MW and 37,000MW.

The programme will see extra megawatts sourced from generators like the privately-owned Kelvin Power Station in Johannesburg as well as with assistance from large industry players like Sasol.

Read: How Eskom is dodging stage 7 load shedding – for now

Eskom to pay R3 million for every megawatt saved