Eskom’s proposed new tariff structure and the catch-22 of generating enough revenue as consumers go off-grid

Source: Stanley Semelane, Business Maverick, 31 January 2021, photo credit: McKinsey & Company

Subsequent to a court order, the National Energy Regulator of South Africa (Nersa) has decided to allow Eskom to recover R6-billion from electricity consumers. While this is legally correct, the dire economic conditions stemming from Covid-19 means options available for accessing electricity outside Eskom should be unpacked.

Our options are limited. Firstly, consumers can decide to go completely off-grid, this means that they can opt to generate their own electricity and not rely on Eskom or the local municipality. The initial investment to do so is costly, but there is a return on investment.

Generally, the off-grid systems are more complex due to the short life span of batteries – normally three to five years for lead-acid and five to 10 years for lithium batteries. The variable nature of renewable energy technologies shortfall that I indicated in my article last week would still be a major challenge for off-grid systems. This means that if one decides to go off-grid battery storage for backup as well as storing excess power, which might not be required when it is available from the generator, would still be needed.
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