This briefing note presents a quantitative analysis of the negotiated pricing agreement (NPA) between Eskom and Hillside Aluminium, assessing the extent of the discount granted relative to the standard Megaflex tariff. It accounts for the value of Hillside’s interruptible load to the System Operator by comparing it to the cost of providing an equivalent service using utility-scale batteries – estimated at approximately R3 billion per year. After factoring in this system benefit, the net annual discount to Hillside is around R7 billion. Although Eskom and NERSA justify the agreement on the basis of Hillside’s broader socio-economic contribution, this was not evaluated against alternative uses of the same power across the economy – raising questions about the purported benefits of the NPA to all consumers.
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