Real-Time Pricing Could Be the Solution to Outages

Real-time pricing and energy efficiency will help Eskom recover the cost of peak demand.
Published: Wed 09 Jul 2014

Despite new power stations coming on-line, power shortages in South Africa are here to stay. This is according to Cornelius Malan, Metering Manager, City of Cape Town, who spoke to us at the African Utility Week.

Real-time pricing is part of the solution

In response to this, Malan believes that real-time pricing is the best solution as it reflects the true cost of energy during supply shortages. This will help industrial and commercial customers decide whether or not to stay on the grid.

While the majority of the industrial sector has a back up supply in response to rolling blackouts, Malan believes that this is not a viable long-term option.

While the city currently has meters that will help industrial and commercial customers use power according to tariffs, the meters require an upgrade. Malan says that this can probably be implemented by the end of this year. Although nothing has been formally planned, this process will definitely be implemented since Eskom is not recovering the cost of peak demand. Says Malan, “Somehow we have to fund that shortage and it’s only fair that the people who use the power during peak times, fund it.”

Malan says that the correct technology is in place so all that needs to be done now is tariff adjustments.

Customers must shoulder some responsibility

All utilities have a responsibility to make meter data available to their customers, according to Malan. This is available in Cape Town and customers must sign up for it in order to view their consumption levels. Although not in real-time, the data will help companies manage their consumption levels better. According to Malan, real time may become available before the end of the year for industrial users.

The biggest load is Cape Town’s domestic customers. Says Malan, “If we can get them to come onboard to voluntarily shed power during peak time, Eskom may not have to carry out load-shedding so regularly.

Malan points out that it is Eskom’s responsibility to incentivize people to use energy more efficiently and encourage them to shift loads during peak times. He suggests that Eskom adopts a country-wide communication to advise on consumption levels and overload.

“Eskom should probably use more media to communicate consumption levels and request load shifting. If customers use energy more effectively, blackouts may not be necessary. More needs to be done to educate people about power outages and what can be done to avoid them.”

Change must be slow

With regards to metering, Malan believes that utilities should take care not to change too much as customers may not accept or welcome the changes. In addition, changes should be made slowly since the infrastructure must last a long time. Meters must last at least 10 to 15 years otherwise it can prove to be too expensive, explains Malan.

Malan strongly believes that by making a meter smart, you don’t overcome the inherent difficulties with a meter located in a house. “To go back to integrated meters will be a difficult choice. On a domestic level, we will probably stick with split meters for a long time to come.”