When Eskom first published its amendments to its 2025 Retail Tariff Plan (RTP) in November 2024, it included provisions for a new generation capacity charge (GCC) that would see customers hit with an additional fee, designed to “recover fixed costs related to generation capacity, thus reducing revenue risk due to volumetric recovery rates.” In other words, customers would be charged more for simply having a grid connection.
Eskom’s got some big plans for the future
Unfortunately, the National Energy Regulator of South Africa (Nersa) and its Electricity Subcommittee (ELS) met on 11 February to discuss Eskom’s RTP and recommended that the application be broadly approved. It did, however, suggest a change to the application that would see the GCC phased in over three years, rather than slapping customers with the new fee all at once.
It also noted that the GCC should be limited to just 20% of the fee Eskom initially proposed through 2025/2026, and only see a minor bump to 30% in 2026/2027, according to EE Business Intelligence managing director, Chriss Yelland. He continued, “The recommendation for the GCC in the years thereafter is unclear.”
As pointed out by MyBroadband, Eskom’s initial submission included a charge of R5.99/day per point of delivery (PoD) in a household. For homes with a single PoD, that would result in an additional charge of roughly R182/m. Should the ELS’ suggestions be approved, a single PoD would only be liable for around R1.20 per day –substantially less than the initial proposal.
“The introduction of the GCC is crucial for reducing the revenue risk associated with volumetric recovery rates, particularly as the integration of variable energy resources increases and necessitates backup capacity,” Eskom said. “Importantly, the implementation of the GCC will result in a reduction of the variable c/kWh charge, easing the burden on consumers.”
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Eskom reckons the introduction of such a fee will be used to dissuade those grid-tied solar homeowners who use the electricity when necessary, and then use the grid as a “battery” when their solar panels aren’t outputting enough energy.
“Customers with solar rooftop PV connected to the grid who use Eskom-supplied energy as a backup, known as the “Eskom battery” on cloudy days, at night and during the morning and evening peak will still be required to pay for using the Eskom network,” said Eskom.
Alongside the introduction of the GCC, Eskom’s revised application submitted in November made way for new a single energy charge, an ancillary service charge, a network demand charge, and an R/day service and administration charge – all of which would apply to all grid-tied customers “regardless of usage.”
Should the changes and charges be approved, those households currently employing a grid-tied solar solution, as well as low-consumption customers, would pay “substantially more” for electricity than their monthly bill currently indicates. According to Yelland, the recent recommendations by the ELS have been sent back to Nersa to await final approval, something that shouldn’t take more than a few weeks to complete.
