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electricity cost Archives - EP Home Solutions

Head in the sand: Eskom fails in a land of cheap energy

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Dom Williams of SOLA Future Energy has recently written this article for Fin24 regarding Eskom’s inability to produce cheaper energy.

Renewables pose a threat to coal and nuclear, because wind and solar are undeniably cheaper forms of energy, argues Dom Wills.

This year Eskom turned 94 years old. But so far 2017 has been one of the most damaging years yet for South African’s besieged power utility.

In 2008 and 2014 Eskom had to cope with load shedding and the power utility took a lot of heat for the rolling blackouts and the subsequent damage to the economy. Yet, during those years, Eskom was at least perceived to be the good guys doing a tough job.

This apparent positive spin led to many South Africans and businesses supporting Eskom’s initiatives to cut energy consumption and increase efficiency.

In contrast, 2017 paints a bleak picture. When compared to 10 years before, the figures speak for themselves. In 2007, Eskom sold 218 TWh electricity for 18.33c per kwh at a 16.11% profit margin. A decade later in 2017, Eskom sold less power – 214 TWh electricity for 82.66c per kWh at a 0.5% profit margin.

Thus, in the last 10 years, the state utility has grown worse off. It is selling less power, for higher tariffs, at a lower profit margin. This begs the question whether solutions exist that could reduce Eskom’s costs and boost profit. And could Eskom implement these solutions?

Click here to read the full article.

 

Business Day: Eskom must come clean on coal, groups tell Nersa hearings

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Business Day has reported on the Nersa hearing.

Eskom was sharply criticised at National Energy Regulator (Nersa) subcommittee hearings for trying to keep some of its operating data secret.

This especially related to the utility’s coal costs that were overshadowed by its dealings with the Gupta family.

The castigation comes amid widespread criticism of the parastatal for recently submitting a one-year revenue application for 2018-19 that seeks permission from Nersa to deviate from the multiyear price determination (MYPD) methodology and minimum information requirements used for tariff applications.

The utility is again pleading that it is short of money.

“Eskom has put forward the best information we have,” Calib Cassim, Eskom GM for financial planning and economic regulation, said.

But he also said the utility’s systems were unable to provide disaggregated financial data related to coal purchasing, handling and other costs at the level of each of its power stations.

Read the full article here.

Fin24: Why Eskom is asking for a 19.9% tariff hike

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Fin24 has recently reported on the reason why Eskom is asking for a 10.9% tariff hike.
Johannesburg – Eskom was making a sacrifice on its allowable returns in its latest tariff application to the National Energy Regulator of South Africa (Nersa), which will see a drop of R12bn in returns.

This is according to Eskom’s team of experts who unpacked the details of the power utility’s application for a tariff hike of 19.9% to the regulator for the 2018/19 year.

Nersa has given Eskom the green light to pursue the hike and hearings into the viability of the proposed tariff increase is scheduled for later this year.

Eskom wants its allowable revenue to increase to R219.5bn, up from the allowable revenue of R205.5bn which Nersa maintained for the 2017/18 year. Essentially the 2.2% increase for 2017/18 was below inflation, said Deon Joubert, corporate specialist of finance and economic regulation.

Hasha Tlhotlhalemaje, general manager of regulation said that in essence Eskom was asking for an absolute revenue increase of R14.3bn. “This is a 7% increase from the previous allowable revenue (approved by Nersa),” she said.

Of this 3.6% of the allowable revenue will be generated from standard tariffs, which is comprised of local customers and the remaining 3.4% of revenue would be generated from export and Negotiated Pricing Agreement (NPA) customers, she explained.

If the application succeeds, Eskom expects an income of R206.2bn from tariffs, Fin4 reported previously. Its average tariff is expected to then rise from 89c per kWh to R1.07 per kWh.

In monetary terms this R219.5bn comes from an increase in primary energy sources of R1bn, an increase of R11.2bn in local Independent Power producers (IPPs), an increase of R13.2bn for operating costs and a R2.8bn increase in international purchases. No change is expected in the level of depreciation. The environmental levy is also expected to decrease with R1.8bn

Eskom is also taking into account that returns will drop R12bn from Nersa’s previous decision. if this decision was not made, the price increase would have been “phenomenally” higher, explained Tlhotlhalemaje.

Read the full article here.

How commercial property projects can avoid fluctuating price of solar installation

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The cost of installing photovoltaic (PV) systems could rise in the fourth quarter (Q4) of this year, according to Charl du Plessis, Head of Project Development at EP Solar, a division of Energy Partners and part of the PSG group of companies.

He says the cost of solar panels will increase by about 7% in Q4 of 2017, as a result of the increase in the demand for PV systems worldwide. “This will effectively increase the cost of constructing a commercial 1MW PV installation in Q4 of this year by around R680 000.”

The price increase is temporary, with costs expected to equalise by the first and second quarters of 2018. “However, it is not realistic for commercial projects to wait for temporary price spikes like this to pass before commissioning a new PV system.”

Installing PV systems are still valuable as the overall trend in the cost of solar has been downward, he says. “Ten years ago the average payback period of a commercial rooftop PV system was around seven years. It is now very common to see payback periods of under five years.”

Du Plessis explains that commercial solar in South Africa has shown an increased interest from the property market, with especially large property groups actively searching for alternative energy solutions. “It is also interesting to see that the knowledge and understanding around solar technology has definitely increased in this market. Many of the clients that approach us for alternative energy solutions have done their homework and know exactly what they are looking for in terms of capacity and performance.”

According to Du Plessis, it is vital for players in the commercial market to have access to the most cost-effective PV solutions when they need them and not have to stall projects because the price is too high. “A 7% price increase, like we are seeing in the cost of solar, absolutely affects the payback period of a system, but one cannot delay an entire construction project by three to six months as a result of it. Partnering with large solar providers that manage their logistics and warehousing in-house, is therefore paramount,” he says.

Du Plessis explains that established solar technology providers and installers are capable of absorbing temporary price hikes more effectively. “A technology provider needs to have enough stock in-house, and optimised procurement procedures such as off-take agreements with preferred suppliers in place, in order to reduce the impact of temporary price spikes.”

EP Solar has not only taken its logistics and warehousing functions in-house for this reason, but the company also manages its own installation, he says.

“It is important to understand that the quality of installation is the one aspect that sets solar providers apart more than any other. Having the highest quality Tier 1 PV systems installed by contractors that do not do the job right diminishes the effectiveness of the entire system. Every part of an installation, from the bend radiuses of power cables, to the planning of maintenance walkways all play a massive part throughout the lifetime of the installed system.” Du Plessis concludes.

 

Click here to read the full article on SA Property Insider.

Seven Questions To Ask Before Choosing a Solar Solutions Supplier

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The rising cost of electricity and a global drive towards earth-friendly energy alternatives have meant that more and more people are interested in going solar. Which means that more and more solar solutions suppliers are springing up. With so many suppliers out there, how do you choose the right one? Here are seven questions you should ask before you decide:

1. Does the supplier have a proven track record and a solid reputation?

 

Solar Installation

Ensure your solar solutions supplier has the necessary experience and expertise.

 

The most important consideration when looking at Solar suppliers is to choose someone with a proven track record that shows they have the necessary experience and expertise to install reliable, efficient solar solutions.

Here, it is important to check that the supplier’s expertise lies specifically in solar energy. Your supplier should not only be up-to-date with the latest solar technologies, but they should have the experience of having completed numerous solar installations across a wide selection of residential challenges. Your solar solutions supplier should be able to show you examples of successful installations that they have done for other homeowners to give you an idea of the type of workmanship and service you can expect. In short, they should be able to provide references from satisfied homeowners.

Cala van der Westhuizen from Energy Partners Home Solutions, a leading energy solutions provider in South Africa that forms part of the PSG Group of companies, adds: “Find a supplier that has been in business for some time and runs a stable operation. Remember that the lifespan of an energy system is crucial to its value, which means that it should be producing electricity during the lifetime of the system. You should always ask yourself – will the supplier still be around in a couple of years?

No matter how big their business or how long they have been in the solar energy game, a supplier’s reputation always precedes them. This is why we advise you to always get

a third-party opinion. You can do this by looking up the supplier’s social media pages to see what people are posting about them on their wall or in the comments section. You can also search online for testimonials and reviews on sites like Hello Peter where the community rates and reviews suppliers. Lastly, if you see that your neighbours or friends have recently install a home solar system you should ask them what they thought of their supplier.

 

2. What is the return on investment?

 

Although solar technology is becoming increasingly more affordable, it could still be a costly exercise. That is why you should take into account whether the system you are thinking of installing will give you a good return on investment.

“A good home solar energy system can cut your electricity bill by as much as 70%. This means that on a R30 000 bill you can potentially save R20 000, depending on how much roof space you have available. So a proper solar solution should pay for itself with what it saves you on electricity. In fact, a carefully planned and designed solution could pay for itself within five years. Ask your supplier if they can make this promise,” says Van der Westhuizen.

If you are still in the planning stages of building your home and worried that a home solar energy system will drive up the price of your bond, keep in mind that the right home energy solution will save you more in electricity costs over the lifespan of the system than the increase in bond repayments. If you look at the below graph, it should give you a clear idea of the impact of a home energy system on a home loan payment over 20 years.

 

Repayment Graph

Solar savings tables provided by Energy Partners Home Solution.

 

3. Are the supplier’s systems regulation-compliant?

 

Solar energy systems have to comply with certain local regulations and most municipalities require that you apply for permission to connect your system to the grid, otherwise you risk facing harsh penalties or even having your system disconnected. Your solar solutions supplier should advise you on, or even manage, this process on your behalf to help you ensure your system is compliant. It has happened often at Energy Partners Home Solutions that new customers with existing systems discover that their original suppliers never registered their systems, and that when they want to confront them they are either unwilling to help or they have shut their doors on the business.

 

4. Is the supplier using the latest technology?

 

Solar technology is improving at a rapid pace to keep up with the fast-growing industry. It is therefore important that your solar solutions supplier is up to date with the latest technology and is able to provide you with the best possible solar solutions on the market.

Van der Westhuizen agrees: “At Energy Partners Home Solutions, for one, we are continuously searching for new ways to make our clients less dependent on grid-tied electricity and help them save even more money on their utility bills. For example, we developed our own hybrid inverter, the Icon™ home energy system. It not only works like a regular inverter, but can also integrate a home’s storage batteries and manage its hot water system to maximise savings. It is a first of its kind in South Africa.”

 

ICON

Energy Partners Home Solutions developed their own hybrid energy inverter – the Icon™ – to help homeowners maximise their electricity savings.

 

5. Are the supplier’s solutions right for you?

 

House

The size of the home is only one of the considerations when a solar solutions supplier assesses a homeowner’s energy requirements.

 

A good solar solutions supplier takes the individual needs of their customers into account and offers customised solutions that meet their unique home energy requirements. Before installing a solar system, the supplier should first do a thorough home energy assessment, taking into account factors such as the size of the home, number of family members and the area in which the home is located.

“No two clients are the same. When it comes to water heating, for example, Energy Partners Home Solutions will recommend a solution based on the amount of sunshine in your area, the warm water demand of the household and also what has already been installed. Based on these factors, we will find you the ideal solution for your household,” Van der Westhuizen explains.

 

6. Does the supplier take a holistic approach?

 

Your solar solutions supplier should be able to see the bigger picture when it comes to helping you save on electricity. They must be able to offer you more than solar PV and recommend additional other energy-efficient solutions.

Van der Westhuizen adds: “As much as 40% of the energy that traditional solar PV systems could generate is wasted, as it often goes unused. A smart system designer will make sure that the maximum amount of energy is produced smart design, optimised usage and efficient storage.

 

7. Does the supplier have foresight?

 

Your solar solutions supplier must be able to help you plan properly. When implementing a solar solution into a new home design, ensure they are capable of working with your architect and builder to understand your requirements and effectively incorporate the system in your project plan. The solar energy supplier should instruct your builder or electrician to install the required wiring as part of your renovation or building project to avoid extra costs later and to ensure a neat installation.

It is also important that your supplier understands which loads are essential to you during power outages and which loads are less essential. It is recommended that you instruct your electrician to split your electrical distribution board (DB) into essential and non-essential loads. Your prospective solar solutions supplier should be able to help you determine whether your electrical distribution board will be big enough to accommodate the extra equipment required for the solar PV and backup system you need, because it is difficult to expand your electrical distribution board at a later stage.

 

Ask the right questions

 

As you can tell from these seven questions, price should not be the only consideration when choosing a solar solutions supplier. Therefore, when you compare quotes from different suppliers, do not forget to also ask the right questions to ensure you receive the right energy solutions.


 

Read more about this in the press:

 

Property Wheel – Solar Solution Suppliers. The Seven Vital Questions To Ask.

Crown Publications – Seven questions to ask when choosing a solar solutions provider.

Electricity Tariff Changes In 3 Major Municipalities

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Electricity tariffs for homeowners escalate on 1 July each year. To help you plan for tariff upturn, we had a look at the planned increases in the country’s biggest municipalities to see what we’re all in for.

Over the last two months, most municipalities throughout SA released their planned electricity tariff increases for 2017/2018. These are currently being reviewed by NERSA. If approved, new tariffs will take effect from 1 July 2017.

We reviewed the planned increases for the three largest municipalities where we operate so that you know what impact you’re likely to experience.

 

How tariff increases work

Municipalities use an inclining block tariff regulator for home users. This means that your electricity becomes more expensive the more you use. To make it easier to compare, we’ve calculated the cost for a typical family home using 800 kWh of electricity per month.

Monthly bill graph

Johannesburg

Johannesburg City Power will be increasing tariffs by 2.28%. The old and new tariffs for single and three phase domestic homes are shown below (all are excl. VAT).

Johannesburg graph

Example – Typical family home (800 kWh per month)

JHB Example

 

Tshwane

Tshwane tariff increases were different for each consumption bracket. The old and new tariffs for domestic homes are shown below (all are excl. VAT).

Tshwane graph

Example – Typical family home (800 kWh per month)

Tshwane Example graph

 

Cape Town

There has been much confusion around the new City of Cape Town tariffs. Until now, there have been two different residential tariffs. These were based on the value of your property. The old tariff structure is shown below (all are excl. VAT and in c/kWh).

The new tariffs introduce a 3rd residential tariff called Home User. The 3 residential tariffs are still defined by the value of your property; however, each tariff has changed slightly. The tariffs also see an increase of 2.8%. The new tariffs are shown below (all are ex. VAT and in c/kWh).

Cape Town Graph

How this impacts you

If your property is valued at more than R1 million, you will now pay a fixed fee regardless of how much electricity you use. This is because the city needs to maintain the infrastructure that delivers your electricity, irrespective of your consumption. If you use more than 600 kWh per month, your bill will remain unchanged as the rate for >600 kWh is the same for domestic and home user tariffs. If you use less than 600 kWh you will be paying more on the home user tariff due to the fixed fee structure.

Example – Typical family home (800 kWh per month)

Cape Town Example Graph

 

 

Eskom can hike prices by 2.2% in 2017 – Nersa

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Pretoria – South Africa’s energy regulator says Eskom can implement a 2.2% tariff increase for the 2017/18 period as part of a previous multi-year increase determination agreement.

Eskom is currently in the last year of what Nersa calls the ‘Third Multi-Year Price Determination (MYPD3)’ which has provided for R205bn allowable revenue for the state-owned power provider in the 2017/18 period.

This revenue is expected to cover all of Eskom’s allowed costs including a return of R33bn. The allowable revenue also includes an amount of R23bn for Independent Power Producer purchases.

Subsequently, Eskom is able to increase tariffs by 2.2% owing to adjustments made in 2015/16 of 12.7% and 9.4% for 2016/17 in line with the power utility’s Regulatory Clearing Account (RCA).

“It’s important to indicate that Nersa did not make any new decisions for Eskom for the 2017/18 period,” said Nersa chair Jacob Modise.

“Nersa did not make any new decisions. This decision was made in February 2013,” said Modise.

However, the National Energy Regulator of South Africa (Nersa) said it is “opening the door” for Eskom to make a new application for a price increase.

Eskom currently cannot apply for a new RCA owing to recent decision by the North Gauteng High Court. The court previously set aside the regulator’s decision to grant Eskom a tariff increase.

But Nersa said that Eskom can still make an application for a price hike if there are any possible cash flow risks for the company.

This application, though, will have to go through a full public participation process.

“To the extent that we have not been able to process new RCA applications.. it is possible that Eskom may be suffering some financial harm,” said Modise.

“We are opening the door to Eskom to make an application,” he said.

Read the original article from Fin24.

Businesses urged to find alternative energy sources

By | Energy Partners in the Press | No Comments

On February 2, 2017, ENCA released a video featuring Alan Matthews, Head of Energy Partners Home Solutions. Matthews discusses why business owners will have to find alternative energy sources.

Click here to view original video on ENCA.

SMEs Increased Electricity Tariffs Looming

By | Energy Partners in the Press | No Comments
Energy Partners spoke to HR Future about SMEs’ increased electricity electricity tariffs. The article features Mila Loubser (Head of Engineering Intelligence) and Cala van der Westhuizen (Spokesperson at Energy Partners.)
South Africa is still likely to see above inflation increases in electricity prices over the next few years, making it increasingly important for business owners to consider alternative sources of energy.

The large investments Eskom is currently making in infrastructure are likely to affect energy tariffs in the near future.

Since 2008 the average electricity tariffs in South Africa have increased by around 300%. According to our research, the next eight years will likely see a year-on-year tariff increase of at least 6% to 8%. In light of the upcoming 2017 Budget Speech, we are also waiting to find out if the government will introduce a new carbon tax. If this is the case, tariff increases could be as high as 13%.

SMEs should take advantage of the incentives provided for the installation of renewable energy solutions.

SMEs need to keep in mind that they can claim a percentage of the cost of solar and other renewable energy solutions back from SARS. Some banks also offer financing to their business banking clients for renewable energy solutions.

There are a number of benefits to installing solar energy solutions in small businesses, all of which contribute to reducing operating costs and downtime in the event of power outages.

A full solar solution can reduce the average SME’s electricity consumption by as much as 30%.

Reliability of energy supply is vital for SMEs. With this in mind, it is important for business owners to do a proper cost-benefit analysis to ensure that they are making the correct decisions, implementing the right energy solutions and using the optimal financing vehicle to reduce their annual energy spend.


Read the full article here.

Medupi power station ready to go

By | Energy Partners in the Press | No Comments

On December 23, 2016, The New Age Online newspaper released an article featuring our spokesperson, Alan Matthews. The article states that the dark days for South Africa’s economy are finally over as the second unit (Unit 5) of Eskom’s new Medupi  power station will be fully operational, suggesting that the local economy is more than ready for this year.

The power utility said that Medupi power station is now closer to commercial operation and this is a significant achievement since its successful synchronisation in September 2016. This will particularly boost heavy industries and small businesses, which were hit hard by load shedding in the past two years, leading to an economic slowdown.

Analysts said this is good news for such a major boost before the start of the new year, and that going forward the country can expect manufacturing and mining output to increase after suffering heavy losses in the last two years.

Medupi power station is a greenfield coal-fired dry-cooled base load station comprising six units rated at 4 800MW installed capacity and it will be the fourth-largest coal-fired plant and the largest dry-cooled power station in the world. Some industry analysts said given the latest improved business leading indicator published by the Reserve Bank this week, which showed economic improvement for the next six months, the synchronisation of 796MW into the grid will boost the country’s energy and ignite the economy.

Phanuel Rapule, an independent economist, said it was evident that SA was becoming more energy efficient and there is no doubt that the local economic growth will somehow improve and consumer confidence will be restored. “Power is the key economic driver anywhere in the world. That means the dark days are over, our local energy problems are vastly disappearing and this could be the start of good things to come,” he said. The South African Chamber of Business (Sacci) also welcomed the move and that business had been proactive in seeking solutions to the energy crisis.

Alan Matthews, spokesperson for Energy Partners, said electricity costs are still on the rise and Energy Partners’ research said there will be above inflation increases in tariffs for at least the next three years. “Consumers must make sure they switch off their appliances while they are away.

Read full article here.