In this briefing note, we report on the expected negative impact that proposed reforms to Eskom’s tariff structures will have on the role that the distributed generation market can play in resolving load shedding on the short-term. In a context where South Africa has sufficient energy generation, we agree in principle that the tariff structure should be cost reflective. However, as explained in this report, our preliminary analysis indicates that the proposal to implement these tariff changes by April 2023, while the power system is still short of energy, will send fundamentally counterproductive and incorrect pricing signals to generation investors and purchasers of power, and therefore significantly exacerbate the extent and duration of load shedding.
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