South Africa’s state owned electricity utility Eskom Holdings SOC Ltd. has launched the Renewable Energy Tariff pilot programme where customers can source up to 100% of their electricity from Eskom’s renewable sources. Eskom says the initiative will help customers deliver on their renewable energy commitments.
South African businesses are increasingly attracted to electricity generated from renewables as it is relatively affordable compared to Eskom generated coal energy. Renewables also reduce their carbon tax and improve their environmental credentials.
“The Renewable Energy Tariff is designed to provide a cost-effective option for our customers, by only paying for the renewable electricity used monthly, without the initial capital investment required,” said Eskom in a statement.
“We encourage customers to partner with us to deliver on their clean energy target, whether Eskom supplies 100% of customers renewable target, supplement their own renewable energy generated on site or wheeled from an independent third party with the utility’s renewable energy.”
The utility will avail an option for customers to select any percentage of their current electricity usage to be green. The option is only available on a first come first serve basis to only a handful of customers as this is only a pilot project. If successful, Eskom will then submit a proposal to the government for the full implementation of the project on a larger scale. The pilot programme has a two-year period and will be concluded by March 2023.
Bumpy road for Eskom’s Green Transition
Eskom currently generates a maximum of 300GWh per annum of renewable energy through its renewable energy generating facilities that include the Sere Wind Farm, and its run-of-river hydroelectric facilities.
The state electricity utility is currently implementing its ambitious Just Energy Transition strategy that will see it increase its renewable energy capacity through new renewable energy developments and conversion of its old coal power plants into renewable energy and gas power plants.
Eskom’s renewable energy plans have not been universally embraced with South Africa’s minister of mineral resources and energy, Gwede Mantashe publicly opposing the utility’s green transition plans.
“A transition is not an overnight change. How do we navigate through that? Eskom gets excited and says they are closing power stations and are going to open renewables, which obviously will take far fewer people to run than coal, so I ask what are they excited about? That they will have renewables destroying lives instead of coal? My own view is, let’s have a discussion about developmental needs and not reduce ourselves to killing coal and opening renewables,” said minister Mantashe.
Eskom is however adamant that they will implement their green energy transition plans and CEO Andre de Ruyter has been on charm offensive in various media platforms marketing the green energy plan. South Africa’s president, Cyril Ramaphosa is also seen to be more favourable to renewables and Eskom’s green transition. Ramaphosa set up a commission to advise him on climate change including Eskom’s green energy plans. The recommendations of the Presidential Climate Commission will be key in bolstering Eskom’s green energy ambitions politically.