THE POTENTIAL IMPACT
OF EFFICIENCY
MEASURES AND
DISTRIBUTED
GENERATION ON
MUNICIPAL ELECTRICITY
REVENUE
Embedded Generation
Workshop
SALGA Head Office
18 April 2013
Issue overview
Steep electricity price increases are making
technologies like rooftop photo voltaics and
solar water heaters financially attractive to
high end users
Cross subsidising low income
electrification
• Mounting pressure to electrify informal
settlements
Household growth projections
Showing the potential growth in the
informal sector if current trends continue
Low income
electrified
Low income
unelectrified
(informal)
Med income (elec)
Hi income (elec)
Cross subsidising low income
electrification
Rmillion
Cross subsidisation (Source: PDG)
6,000
5,000
Surplus
4,000
Deficit
3,000
Equitable share
2,000
User charges
1,000
Cost
-
Revenue
Low income
Cost
Revenue
High income
Cost
Revenue
Cost
Non-residential
Issue overview
Municipalities depend on high end users for
additional income. What will the impact of
them becoming more efficient and installing
pv be on local government in the next 10
years?
Annual financial surplus/shortfall per service
800
Electricity
600
R millions
400
200
Water
-
2010
-200
-400
-600
-800
2011
2012
2013
2014
2015
2016
What happens when
2017
2018 revenue
2019
electricity
drops such that city
books can’t balance?
REEEP Project Objectives
• Support 4 Metros – eThekwini, Ekurhuleni,
Cape Town and Joburg for next 10 months
• Develop accurate financial and energy
models from which City business
strategies can be designed to address
revenue and service delivery threats
• Feed info into IRP process
REEEP Project Objectives
In detail look at impact of:
• Informal settlement growth and
electrification needs
• commercial and residential pv + efficiency
interventions
• different tariff options
and develop a strategy to address these
factors effectively
Work done to date
• Developed version 1 of a tool to accurately
calculate potential revenue loss from RE
and EE implementation by municipal
electricity end users
Tool design
Necessary to include
• varying time of day, weekday/weekend and
seasonal bulk purchase tariffs in calculations
• realistic data for PV and SWH impact over 24 hr
period and over summer and winter
• realistic technology uptake data
140
PV output (MW)
120
100
80
MW (summer)*
60
MW (winter)*
40
20
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Preliminary Outputs: Cape Town
Preliminary Outputs: Cape Town
Preliminary Outputs: eThekwini
Preliminary Outputs: eThekwini
Preliminary Outputs: Ekurhuleni
Preliminary Outputs: Ekurhuleni
Preliminary Outputs: Joburg
Preliminary Outputs: Joburg
Load profile modelling results
Intervention impact
• SWH and PV largest impact
• Adopted by high end users most affected
by price increases
• Extra revenue loss impact as a result of
users being on inclining block tariff
• Revenue losses from this market are
potentially serious
• Commercial uptake of PV not modelled, but
also expected to be significant
Findings
• Alternative tariff management approaches
can address the problem
– Fixed charge for net metering – though may
not avoid installation for ‘own use’
– Decoupling energy and operational charges.
Reintroduce a network service charge
– Time of Use tariffs
Impact of FBE (CCT)
• SWH and PV use could move a large
portion of the middle income residential
market into FBE bracket (below
450kWh/month).
• In today’s electricity rates, a user currently
just below 600 kWh/month will move into
FBE just from installing a SWH.
Impact of FBE
• Impact without FBE – 34% drop in income
to City per customer
• Impact with FBE – 61% drop in income to
City per customer
Next Steps
• Include more detail around current tariffs
• Determine impacts of
• moving away from large differential inclining block
tariff
• net metering tariffs for PV
• decoupling City revenue from electricity sales ie
service charge for City costs and energy charge for
Eskom repayment
• time of Use tariff
• FBE adjustment
• low income electrification
Thank You
Andrew Janisch
andrew@sustainable.org.za
021-7023622
0849558130