# Interest group forums > Electrical Contracting Industry Forum > Electrical Load Shedding Forum >  What the goverment plans to do

## duncan drennan

On Friday the government release their energy crisis plan. There are quite a few interesting things in there, and I've tried to highlight the immediate plans (and issues) in my latest blog post.




> In the medium and long term Eskom is continuing to expand their capacity, but in the short term drastic measures need to be taken to keep the economy supplied with electricity. Right now Eskom needs to release about 3000MW of capacity to provide enough "breathing room." That is a large chunk of power....although you might be surprised at how easily it can be obtained.
> 
> There is a single viable option to solve this crisis in the short term, and that is power conservation. The government and Eskom have identified this and have the following short term goals...
> 
> Read the full post on The Art of Engineering


Apparently by tomorrow we will have the proposed amendments to the Electricity Regulation Act detailing the quota system, penalties and incentives.

Overall I think the plan is quite a reasonable one. Now it just requires action by each individual, as well as Eskom and the government. I believe a strong marketing campaign to change social norms is where we have to start.

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## Dave A

Duncan, have you had a chance to look at the DA electricity crisis plan? No mention of rationing and more talk about alternative energy sources.

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## duncan drennan

I've just had a quick look. It seems more focussed on addressing medium to long term issues (which need to be addressed), but doesn't really help us get out of the immediate dangers. I'll look at it in more detail a bit later.

The reality is that no government programme (DA, ANC, or other) is going to get us out of the current predicament. Immediate and drastic action by individuals and companies will. We need to out attitude towards the problem, and try to rectify the immediate issues, and then start to deal with the political and longer term issues.

Most importantly, we much each do our bit to get the economy running again. Drastic and immediate reduction of consumption (no matter how uncomfortable) is the only way to achieve this within the next few days and weeks.

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## Dave A

Perhaps the greatest benefit that will come of this current crisis is more widespread attention to energy issues and energy conservation in South Africa.

I agree we need to look at our energy consumption - but I see a difference between the short term and medium to long term priorities.

When it comes to the extent of the immediate problem, it is emerging that the culprit in chief may well be a failure to deliver the fuel fast enough to feed Eskom's generators. This time around it is not a "peak demand" problem and we need to adjust our thinking accordingly.

The quick fix is for Eskom to improve their coal delivery, whilst we as consumers do what we can to lessen demand.

Short term we need to reduce unnescessary consumption. Installing alternative energy solutions falls into medium and long term planning, although of course the best time to start implimenting is now.

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## duncan drennan

> When it comes to the extent of the immediate problem, it is emerging that the culprit in chief may well be a failure to deliver the fuel fast enough to feed Eskom's generators. This time around it is not a "peak demand" problem and we need to adjust our thinking accordingly.
> 
> The quick fix is for Eskom to improve their coal delivery, whilst we as consumers do what we can to lessen demand.


I'm not so sure that this is the main culprit. In the report they mentioned that there were 3700MW of planned outages, and 5000MW of unplanned outages (total of about 22% loss of supply) in the week of January 14. These are the reasons they gave,
Boiler Tube leaks/failureVarious smaller equipment failureGenerator output reductions (load losses) as a result of coal qualityProblems with coal supply
Yes, coal supply has played a role in this, but it all comes back to demand. The systems (maintenance, coal delivery, etc.) are not in place to deal with such a small reserve margin.

One little thing not working as planned (from a broken circuit breaker to a late coal delivery) sends ripples through the whole system, placing more strain on the resources that are working correctly.

Yes, Eskom needs to sort out their coal supply. Yes, they need to look at increasing the margin. And yes, they need to draw in the right skills to manage all of this.

But, the reality is that if we don't all change out habits, this crisis will turn into a disaster.

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## Dave A

> this crisis will turn into a disaster.


This isn't a disaster already  :EEK!: 

Just a question on the maths - what is our total capacity supposed to be again? I thought it was more the 39 000 MW.

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## duncan drennan

From the doc released on Friday it is around 39000MW. Here is the expansion plan.

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## Dave A

Odd. I seemed to remember a number in the 40's - kinda like me  :Wink:

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## duncan drennan

If you look at the figure on pg 10, then the installed capacity is supposed to be around 42GW, but the operational capacity is lower at around 40GW. Possibly they are quoting operational capacity in that table.

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## IanF

Duncan
Great link thanks. I can't believe how much the electricity usage has gone up in the 90s.  Was this a lot chrome alloy plants going up. We have always had the big users like Alusaf Iscor Samancor MSA etc.

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## Chatmaster

What truly worries me is the fact that the government might be focusing on the wrong short term solutions problem. They are looking at consumers to help solve this problem, but the real solution seems to be that Eskom are not running their coal plants at the rate they should run. I mean surely if some of the coal plants are down on their production, surely that is the first step in the process? What amazes me even more is that Eskom must surely loose profits because of their under production.

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## duncan drennan

In the governments response they said that draft amendments to the electricity regulation act would be out for comment by 30 Jan. 04 Feb and still waiting....anyone seen anything about this?

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## duncan drennan

I managed to find the draft amendments on the DME's website. Mainly has to do with what the licensees (i.e. municipalities) have to prohibit by 2010. It's interesting, but I'll add some comments later.

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## duncan drennan

So I've gone through the proposed regulations and made a list of what the licensees (municipalities) have to do.




> Incandescent lights must be replaces with energy efficient ones.Unoccupied buildings' lights must be turned off.No street lights should be on during the day.New dwellings with a value over R750000 must include solar geysers.Dwellings larger than 300m2 must include solar gesyers.All new installations must have a geyser blanket.Office blocks, hospitals, hotels, resorts, and shopping complexes must incorporate solar water heating by 2010.All geysers must be able to be turned off remotely by 2010.All heating, ventilation and cooling systems (HVAC) must be able to be turned off remotely by 2010.Swimming pool pumps and heating must be able to be turned off remotely (interestingly no date is set for this).Street lights must be fitted with energy efficient bulbs.Time use tariffs for customers who consume more than 500kWh a month, before 2010.
> Read the full blog post


Certainly the two that stick out are that HVAC must be able to turned off remotely (you will certainly notice that!) and that consumers over 500kWH/month will be put onto a time use tariff (different rates at different times).

How do you think the time use tariff change will affect your business?

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## Dave A

500 kWh per month is a pretty low threshold, even for an average domestic household.

I've created a snap survey on Survey Monkey.

To take the survey on your average monthly electricity consumption, click here

I'll post a link to results later.

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## duncan drennan

> 500 kWh per month is a pretty low threshold, even for an average domestic household.


Yes, it is particularly low. It will be interesting to see the split across provinces for the survey - come on people, answer that survey!  :Smile:

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## Sefton

I don't know exactly what thresholds and billing models that Eskom is planning to use, so I am basing my comments on the information that you have provided. 

I assume by "time sensitive electricity metering" you mean time-of-use billing. 

In my opinion 500 KWh is far too high, in fact I believe that time-of-use billing should start from zero. 

Let me explain. The problem that Eskom has is that demand is exceeding supply DURING PEAK HOURS. Time-of-use billing is the same model that Telkom and the cell phone companies use. They charge more during peak and less during off-peak.

Lets say that the cost per unit(KWh) is 40c. If Eskom charged 30c during off peak and 60c during peak, then a lot of homes and businesses would make an effort to cut down on usage during peak. This could result in a saving for the user. The net result is that the usage of electricity would be "smoothed out". The average use of electricity would remain the same, but the peak demand would be reduced. This would solve the problem of demand exceeding supply. 

You will have the option of fitting a time switch to switch off your geyser during peak, or not to tumble dry or not have your pool filter running or have lights off in empty rooms during peak. For a small amount of effort you will save money and also solve the country's electricity problems. Lets face it, most people aren't going to make the effort if there is no monetary incentive. 

Other countries such as Canada are using this billing model for electricity.

To sum up, I believe that time-of-use billing will solve our short term problems. I say it should start at zero.

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## Dave A

Essentially I agree with Sefton. Starting from zero makes sense and would be fair. However, government plainly does not want to start at zero - the question is why?

And of course, once we get to the bottom of that, the next questions are - are the reasons fair and has the line been drawn at a fair level?

The irony is that up until now, if you were a heavy user of electricity, you could negotiate a discounted rate!

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## Sefton

Dave, that last sentence of yours is interesting. Assuming Eskom and the government did not mess up, then, purely from a business point of view, Eskom should be encouraging us to use more electricity, rather than less. However, the other side of the coin is that more natural resources would be consumed and more pollution would be created, so maybe the fact that they messed up is a blessing in disguise.

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## duncan drennan

> However, government plainly does not want to start at zero - the question is why?


I reckon they don't want to penalise low income households. If that is the reason it is a pretty bad one.

In Brazil, when they had to ration electricity (another form of price signalling), their biggest contributors were low income households. This makes quite a bit of sense as they have the most to lose (cost per household income).

It would make more sense to have it start from zero, and look for ways to incentivise businesses to reduce electricity (e.g. discount if you reduce electricity consumption to below 80% of previous year's).

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## Dave A

> I reckon they don't want to penalise low income households.


Implementation challenges and popularity considerations are other possiblities.

Any others?

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## Dave A

A little feedback on the results so far: 

45% of respondents from Gauteng 
90% of respondents are business owners or managers (No suprise given where I've punted this survey so far) 
73% of respondents are in a "work from home" business 

Highlight numbers for electrical consumption at home: 
18% use less than 500kWh per month 
27% use 501-750kWh per month 

Highlight numbers for electrical consumption at work (where this is at a seperate premises from home): 
0% uses less than 500kWh per month 
33% uses 501-750kWh per month 

I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh. 

I would prefer a much bigger sample though before I'd consider attempting raising the point in any serious way. For those who have not taken the survey yet, please think about doing it soon.

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## duncan drennan

> I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh.


Maybe it shouldn't be seen that way? If you view it the other way around, as an "incentive" then a lower threshold achieves more in terms of providing the country more leeway to grow.

Just a thought - still deciding how I feel about this.

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## Chatmaster

> I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh.


I agree with you here, but I want to ask this simple question. If our shortage is for example 15%, Why not simply require that everyone use 15% less electricity? Everyone have a different setup. Mine is fluctuating according to my business growth so I will have serious problems anyway if my business grow, but 750kWh seems to be waaaaaaaayyyyyy below my current usage. I have been cracking my head and cannot think of ways to get it below 2500, I m seriously worried about the decision they will make at the end of the day. Besides each residential house is unique in its size, layout and occupancy. By simply stating that all houses must have x usage is not practical nor possible imo.

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## Dave A

I basically like Sefton's idea of starting from zero. But if there is going to be a differentiation point - well let's try to find one for the right reasons.

If you take a look at the difference between the first draft and what we got in the end on BEE - a sound argument can make a difference. Especially when it's competing against the first thumb suck.

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## duncan drennan

I agree. The time based tariff should start from zero. It incentivises *all* users to change their usage habits and to try to shift their usage where they can. This is good for business in that it will help to ensure that they have a steady supply of energy.

Obviously on the other side it is bad for business as their base costs go up, but there is an incentive to try to move your load around (where possible).

I think the off peak tariff should be slightly lower than the current tariff. This means that it may even be possible to save money in some cases.

This does not have to do with the time based tariffs, but I wonder if there is any merit in having different billing packages that users could choose from? e.g. say there were two billing packages, one had a lower rate per unit, but you are billed on a sliding scale (like water is billed), while the other has a higher rate per unit, but did not scale with consumption. Users could choose a package suitable for their usage pattern.

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## Dave A

> This does not have to do with the time based tariffs, but I wonder if there is any merit in having different billing packages that users could choose from?


Heck, Duncan. I have a hard enough time with all the cellphone packages out there. Now you want to torture me with choices on electricity billing options  :Yikes:

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## irneb

The way it's running now, this is not going to happen soon. I'm talking about time biased billing. How will Eskom know what KWh you've used at what hour of the day?

The current meters only show how much has been used in total since installation - thus reading at the end of the month & deducting the previous month's reading gives the amount of kWh used during the month. This is the best scenario which can happen. Usually Eskom just bills for 3 to 6 months on an average use as experienced previously for that user. Then an update reading is made and the next billing then adjusts for the difference. We've all seen those "strange" bills happen - those that's either too high or too low according to what we usually get.

In order to get time-biased billing working "right now", these readings need to be taken at least twice a day ... yeah sure that's going to happen.

A solution I can think of would be to have 2 meters installed with a timer switching between the 2 at pre-set times (or maybe "remotely"). Extra capital outlay for probably the user. Or most probably a new type of meter needs to be installed. Although both these solutions won't happen soon - similar problem as per the remote shut-off of geysers and HVAC's .... HOW AND WHEN???

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## Chatmaster

I heard over the news this morning that Harmony mines are planning to build their own power station for 5 of their mines. I wouldn't be surprised if others follow soon.

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## Dave A

I think they're planning to replace the meters. Time sensitive metering is simply not possible without the right equipment.

In terms of roll-out, I expect the most effective way to do it is to start with the bigger clients. To this extent setting targets for the installation of new meters prioritised by consumption makes sense.

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## duncan drennan

> I heard over the news this morning that Harmony mines are planning to build their own power station for 5 of their mines. I wouldn't be surprised if others follow soon.


I know Eskom is planning to pay customers to self-provision, so building your own power stations has some advantages, other than the huge capital outlay.

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## Chatmaster

I also think, being picked on for the next 7 years and beyond every time there is a power crisis makes it worthwhile for them to spent a couple of bucks on it.

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