South Africa's President Cyril Ramaphosa has issued a swift response to US President Donald Trump's threat that aid from that country could be withdrawn, owing to his view that South Africa's recently enacted Expropriation Act is leading to the confiscation of land.

Following Trump's comments, which were made initially on his Truth Social account and later reinforced in a brief television interview, the Presidency said the government had not confiscated any land.

It also underlined South Africa's status as a "constitutional democracy that is deeply rooted in the rule of law, justice and equality".

In the Truth Social post, Trump said: "South Africa is confiscating land, and treating certain classes of people VERY BADLY. It is a bad situation that the Radical Left Media doesn't want to so much as mention. A massive Human Rights VIOLATION, at a minimum, is happening for all to see. The United States won't stand for it, we will act. Also, I will be cutting off all future funding to South Africa until a full investigation of this situation has been completed!"

Then, in an impromptu interview regarding the possibility of cutting aid to other African countries, Trump indicated that his attention was solely on South Africa.

"No, it's only South Africa. Terrible things are happening in South Africa. The leadership is doing some terrible things, horrible things. So, that's under investigation right now. We will make a determination [once] we find out what South Africa is doing.

He went on to say: "They're taking away land, they're confiscating land and actually they're doing things that are perhaps far worse than that."

Trump's warnings came amid a flurry of recent executive actions affecting foreign relations, including the announced imposition of 25% tariffs on Canadian and Mexican imports and an additional 10% on Chinese imports.

Ramaphosa stressed that the country's recently adopted Expropriation Act was not a confiscation instrument, but a constitutionally mandated legal process that ensured public access to land "in an equitable and just manner as guided by the Constitution".

"South Africa, like the United States of America and other countries, has always had expropriation laws that balance the need for public usage of land and the protection of rights of property owners."

Ramaphosa said it looked forward "to engaging with the Trump administration over its land reform policy and issues of bilateral interest", and expressed optimism that these meetings would result in a better and common understanding.

It also stressed that the US remained a key strategic political and trade partner for South Africa.

"With the exception of PEPFAR Aid, which constitutes 17% of South Africa's HIV/Aids programme, there is no other significant funding that is provided by the United States in South Africa," it added.

After Ramaphosa posted his response on X, Elon Musk, who grew up in South Africa and who has voiced his opposition to both the Expropriation Act and South Africa's black economic empowerment policies, posted the following on platform that he also owns: "Why do you have openly racist ownership laws?"

Musk is also heading Trump's newly created Department of Government Efficiency, and has called for the closure of the US Agency for International Development , which is the implementing agency for the President's Emergency Plan for AIDS Relief, or PEPFAR.

Later this year, South Africa will host the G20 meeting in Johannesburg and will be handing over the presidency to the US. There is currently still an expectation that President Trump will attend the meeting.

Eskom has confirmed that it is forecasting to make a full-year profit of more that R10-billion for 2024/25, having reported a R17-billion profit for the interim period, up from the R1.6-billion recorded for the same period in 2023/24.

The group reported an after-tax loss of R55-billion in its full 2023/24 financial year, a performance that was negatively affected by the derecognition of a R36.6-billion deferred tax asset associated with the separation of the National Transmission Company South Africa (NTCSA).

Its loss before tax last year stood at R25.5-billion, which represented an improvement on the R34.6-billion reported in 2023/24.

Eskom's going-concern status is currently being sustained only because of the R252-billion debt relief being extended by the National Treasury, of which R64-billion was released in the 2024/25 financial year.

CEO Dan Marokane told members of the Portfolio Committee on Electricity and Energy that the interim profit reflected the seasonal character of the business, which benefitted in the first half of its financial year from April to September from both higher demand and higher winter profits.

Nevertheless, he still anticipated a full-year profit of R10-billion, on the back of a far better operational performance, which he said was now filtering through to its financial performance.

For the six months to September 30, plant availability rose to 62.97% from only 55.27% in the comparable period of the prior year.

In addition no loadshedding was implemented for the first 183 days of the 2024/25 financial year, resulting in an R11.9-billion fall in diesel cost period-on-period.

That loadshedding reprieve had since been extended to 301 days, but rotational cuts were reintroduced at Stage 3 on January 31, because diesel and pumped-storage reserves had been depleted, owing to extended use after six coal units broke down across the Matimba and Lethabo power stations.

Asked how the recently approved above-inflation tariff hike of 12.74% could be justified in the context of a R10-billion profit forecast, CFO Calib Cassim pointed to Eskom's persistently supressed financial ratios.

These, he said, were making it impossible for it to meet its maintenance and expansion plans while also honouring repayments on debt, that remained above R412-billion at the end March last year.

He said a R10-billion profit would represent a 3% margin, which was well below the returns being achieved by independent power producers.

Eskom, which had applied for a 36.15% tariff hike, also indicated that the 12.74% was not in line with what was needed to restore the group's financial sustainability, but stressed there were also three other key components.

These included self-help measures such as noncore disposals, implementing cost savings and addressing the municipal arrears debt problem.

Cassim warned that there was a growing risk that the rising municipal arrears debt, which stood at over R90-billion, would erode the benefits of the debt-relief package.

Marokane said Eskom would be integrating the 12.74% into its models to assess the impact and promised to provide feedback on the implication within weeks.

He gave no indication that Eskom intended to contest the outcome legally, saying that it would need to assess how the business could operate within the envelope provided, with priority to be given to asset maintenance and integrity.

Eskom also refused to be drawn on whether the fact that it received no allowable revenue for the carbon tax implied that it had secured an exemption, directing enquiries in that regard to Nersa and the National Treasury.

Engineering News editor Terence Creamer discusses the background to power utility Eskom's MYPD6 tariff application to the National Energy Regulator of South Africa (Nersa); Nersa's decision; and what is likely to happen next.

The Energy Regulator, the National Energy Regulator of South Africa's (Nersa's) highest decision-making body, has granted Eskom a 12.74% tariff increase for implementation on April 1.

The announcement coincided with the release of interim results by Eskom for the period to September 30, 2024. These showed that the utility made a profit of R16-billion in the first six months, a period that coincides with the high-demand and high-tariff winter months.

The result represented a sharp turnaround from the R2-billion profit made during the same period in 2023, as well as a dramatic improvement compared with the R55-billion full-year loss.

Nersa chairperson Thembani Bukula announced that the Energy Regulator also approved increases of 5.36% and 6.19% for Eskom's 2026/27 and 2027/28 financial years.

This, against requests for 11.8% and 9.1% respectively, made in Eskom's sixth multiyear price determination (MYPD6) application.

As a result, the standard tariff would rise from 195.95 c/kWh to 220.92 c/kWh on April 1 for direct customers, instead of the 266.77 c/kWh sought by Eskom; municipal tariffs would rise on July 1. In the two outer years the tariff would increase to 232.75 c/kWh and 247c/kWh respectively.

The hike for 2025/26 is well below the 36.15% requested by the State-owned enterprise, but still above requests made by many stakeholders during public hearings in November and December for the increases to be pegged to inflation.

Consumer inflation stood at 3% in December, while the average inflation rate for the year was 4.4%, down from the average of 6% in 2023.

In addition, there was some political pressure on Nersa to contain the increases, after Electricity and Energy Minister Dr Kgosientsho Ramokgopa described Eskom's 36.15% request as unaffordable and untenable.

In a statement, Ramokgopa, who is also Eskom's shareholder Minister, welcomed the decision, while acknowledging that it would place pressure on the utility. The Ministry, he said, remained committed to working with Eskom to drive greater efficiency gains.

However, Ramokgopa argued that the approved tariff adjustments showed consideration of the need to mitigate inflationary pressures on communities and businesses. He also indicated that other measures would be introduced by government to support poor consumers and small firms, but did not offer specifics.

BELOW ESKOM'S ASK

The 2025/26 increase is based on approved allowable revenue of R384-billion, which is materially lower than the R446-billion sought by Eskom.

It also assumes sales of 192 562 GWh, which are significantly higher than the 185 652 GWh forecast by Eskom in its submission.

The allowable revenue approved for the two outer years, was R410-billion (R495-billion) and R437-billion (R536-billion), while sales volumes were forecast at 192 710 GWh and 193 940 GWh respectively, a significant deviation from Eskom's declining sales trajectory.

The R61-billion shortfall between the allowable revenue approved by Nersa for 2025/26 and Eskom's application arose as a result of major adjustments to Eskom's regulatory asset base (RAB) and the utility's cost assumptions for the period.

Nersa approved an RAB that was R71-billion lower than the R1.1-trillion RAB included in the MYPD6 submission, but approved Eskom's weighted average cost of capital of 4%. The approved returns were reduced by R2.8-billion to R39.8-billion.

Nersa also cut Eskom's primary energy costs by R5.5-billion to R122.4-billion, slashed its operating costs by R16.4-billion to R76.9-billion and cut its depreciation by R21.8-billion to R45-billion.

Interestingly, no allocations were made for the carbon tax or for a partial recovery of municipal arear debt, for which Eskom had sought R5.5-billion and R8.9-billion respectively.

Similar cuts were made for the two outer years.

RINGFENCED REVENUE

For the first time, Nersa disaggregated the allowable revenue across Eskom Generation (R249.6-billion), Eskom Distribution (R39.3-billion) and the newly separated...

The bankable feasibility study (BFS) for blue ammonia producer Suiso's R31.5-billion coal-to-fertiliser and methanol project in Kriel, Mpumalanga, was completed earlier this month. The study was carried out through engineering services firm Wuhuan Engineering.

With the BFS complete, basic engineering for the project will start in February, to be followed by the start of construction next year. The plant is slated to be fully operational and fired up in 2029.

Suiso founder Paul Erskine told Engineering News on January 29 that discussions are currently under way with financial services provider Afreximbank on mandating it as the exclusive lead arranger for the project's financing.

"This project isn't only about producing sustainable fertilisers and zero-sulphur methanol. It's also about proving that decarbonisation and industrial innovation can work hand-in-hand," he said.

Using coal as a feedstock, the Suiso facility will employ advanced carbon capture, utilisation and storage (CCUS) systems - which are being developed in collaboration with the Council for Geoscience - to reduce emissions. Captured carbon will be repurposed for gypsum and ammonium carbonate production, converting waste into valuable resources for agriculture and construction.

Located on a 900 ha site in Leandra, the facility will integrate feedstock and production processes to maximise efficiency and affordability.

Feasibility studies are under way for carbon storage in deep saline aquifers.

Further, Suiso's integrated coal gasification process will generate synthetic gas, hydrogen and ammonia, forming the foundation for fertilisers and zero-sulphur methanol.

Erskine said that, collectively, there are about 830 reference operations around the globe that have proven the effectiveness of these technologies and processes.

Sub-Saharan Africa, with its population of more than one-billion people, has just five fertiliser plants. China, by comparison, is home to 1.4-billion people, and has 277 fertiliser plants.

The Suiso facility aims to address this shortfall by producing 1.5-million tonnes a year of nitrogen-based fertilisers. The output includes urea, ammonia nitrate and controlled-release variants, while significantly reducing reliance on imported fertilisers.

Erskine revealed that the coal gasification technology used in the plant will be supplied by chemical industry company Air Products, while the ammonia synthesis aspect will be the product of engineering firm KBR's expertise.

The urea production capability is being sourced from fertiliser plant engineering experts Stamicarbon, with the methanol production courtesy of petroleum refiner Sinopec.

Other technology partners include engineering firm Sinopec Ningbo and technology company Incro.

To support its decarbonisation goals, Suiso is also exploring a 15-year power purchase agreement with a renewable energy provider. This collaboration will integrate renewable energy into the national grid to reduce reliance on coal-based power.

Suiso's facility will implement wet flue gas desulphurisation and advanced water recycling systems to meet international emission standards. These technologies will reduce nitrogen dioxide and sulphur dioxide emissions, addressing long-standing air quality concerns in Mpumalanga.

Additionally, the production of 234 000 t/y of clean, zero-sulphur blue methanol will be in compliance with South Africa's upcoming Fuel Act of 2027.

The South African maize market, valued at R46.3-billion, is projected to be valued at R55.6-billion by 2029. By replacing 1.2-million tonnes a year of imported urea fertiliser with locally produced products, Suiso's production becomes an import substitution strategy, shielding farmers from volatile geopolitical supply chains and ensuring competitive pricing.

The project's construction phase is expected to generate 4 000 jobs, transitioning to 981 permanent positions once fully operational in 2029. To build a skilled workforce, the on-site Gerhard Potgieter En...

On the eve of the highly-anticipated announcement of Eskom's tariffs for the coming three years, the Auditor-General South Africa (AGSA) has warned that tariff increases will fail to improve the State-owned company's financial viability unless they are accompanied by dramatic improvements to revenue management and controls.

It also warns of unintended consequences for municipal indebtedness and illegal connections, given growing affordability concerns.

The National Energy Regulator of South Africa will announce its decision on Eskom's sixth multiyear price determination (MYPD6) on Thursday, following nationwide public hearings late last year.

During the hearings an overwhelming number of stakeholders objected to Eskom's application for increases of 36.15%, 11.81% and 9.1% respectively for the 2025/26, 2026/27 and 2027/28 financial years, warning that such hikes would crimp growth and increase poverty.

In an presentation to the Portfolio Committee on Electricity and Energy, made by AGSA officials together with the Deloitte executives who conducted the audit on behalf of the AGSA, alarming details were provided regarding a continuing lack of internal controls and consequence management at Eskom.

"Eskom continued to submit financial statements for audit purposes which contained material misstatements in multiple account balances and disclosures," the AGSA stated, adding that significant deficiencies in internal controls had resulted in negative audit outcomes for at least the previous five years.

This included the most recent financial statements for the year ending March 31, 2024, which received a qualified audit opinion.

In addition, the release of the statements were delayed until December 19, long past the May 31 deadline for submission to National Treasury and the auditors as required by the Public Finance Management Act.

The delay was attributed to difficulties in finalising the take-on balances to be reflected following the disposal of the transmission business to the newly formed National Transmission Company South Africa, as well as a forensic probe into illegal prepaid electricity tokens, which were shockingly found to have been generated at large scale by Eskom employees with privileged-level access to the vending system.

The AGSA was unable to place a value to the prepaid electricity tokens generated illegally, nor could it provide certainty on whether and where these token had been used. This, owing to a lack of available data logs, which the AGSA said reflected a breakdown of controls in the underlying business processes.

Eskom reported distribution energy losses of 13.9 TWh as a result of electricity theft in 2023/24, when it reported a loss of R55-billion.

While AGSA acknowledged that the MYPD6 decision would be key to increasing Eskom's future revenue, it also used the platform to raise affordability concerns.

"Increasing tariffs without addressing Eskom and municipal distribution infrastructure and revenue management challenges will therefore not address Eskom's viability challenges.

"We will likely have an Eskom that is supplying electricity, only for that electricity to be lost through bad debts and non-technical losses, or illegal connections."

The AGSA was particularly concerned about the potential for the hikes to exacerbate the municipal indebtedness crisis, which it described as the "biggest viability risk to Eskom, after debt service costs".

At the end of March, Eskom was owed R86-billion by municipalities, and the figure had since climbed to above R90-billion, with many of the municipalities that signed on to the National Treasury's debt-relief programme failing to comply.

The AGSA noted that R45.2-billion was owed by 34 municipalities that had been categorised as "dysfunctional" by the Department of Cooperative Governance and Traditional Affairs, of which 32, owing R44.7-billion, were participants to the debt relief programme.

It also called for a strengthening of government policies aimed at protec...

Amid persistent allegations of corruption and mismanagement at the South African Bureau of Standards (SABS), the Department of Trade, Industry and Competition (dtic) has finally announced the launch of an independent investigation.

During a Trade, Industry and Competition Portfolio Committee meeting, held virtually on January 28 - at which SABS executives and Trade, Industry and Competition Minister Parks Tau were present - the dtic said it was in the process of finalising the logistics for the probe, with the intention to have it start as soon as possible, potentially as early as next week.

The department emphasised the need for the investigation to be independent and transparent, acknowledging that an internal investigation would not be credible, given the nature of the allegations.

Tau and Trade, Industry and Competition Deputy Minister Andrew Whitfield confirmed that they had received multiple allegations against the SABS over the past few months, including allegations of bullying, mismanagement and financial irregularities.

However, concerns were raised by committee members about the delay in processing these allegations, given the impact that these issues might be having on SABS operations if true. Of particular concern is the temporary loss of accreditation for cement certification.

The SABS's cement segment scope of accreditation from the South African National Accreditation System (SANAS) was partially suspended on August 8 last year. This means SABS cannot issue new permits bearing the SANAS logo or for new clients, additions of scope or new products and renewals.

The temporary loss of this accreditation has serious implications for SABS's ability to deliver services, particularly related to the certification of cement.

SANAS initially gave SABS a three-month period to put in place the necessary remedial actions. However, SANAS has since granted SABS an extension until April to fix the issues and undergo a reassessment.

The recent ransomware attack on SABS, which Engineering News reported on in December, has affected some of its processes, making it difficult to complete the necessary actions within the initial three-month timeline.

During the briefing, SABS representatives said the agency was in regular communication with SANAS, with monthly meetings taking place to provide updates on the progress in addressing the issues leading to the partial suspension of accreditation.

The loss of the cement accreditation and the cybersecurity breach were raised as key points of concern that needed to be addressed in the investigation.

Various committee members emphasised the need for transparency, impartiality, and timely resolution of the investigation, while highlighting the importance of safeguarding the SABS's integrity and ensuring proper cybersecurity measures.

Members of the portfolio committee also emphasised the need for the investigation to be conducted independently, without any influence or interference. There were questions about who the service provider conducting the investigation would be, and also calls for the terms of reference to be shared.

Concerns were also raised about ensuring that evidence, including information on employees' computers and in the cloud, is properly preserved during the investigation.

In addition, there were also requests for clear provisions to be made to protect the identity and safety of whistleblowers who might come forward with information.

Assurances where also sought that the findings of the investigation would be communicated transparently to the committee and the public.

In addition, there were requests for timelines to be shared, including one for when a report would be submitted.

The overall focus was on ensuring the independence, thoroughness and transparency of the investigation process to address the serious allegations against the SABS.

"It is critically important that the investigator, whoever it is, makes it absolutely clear that they are open to receiving comments an...

South African electricity trader Discovery Green has confirmed that it has signed supply agreements for wheeled electricity with five companies in the mining, property and hospitality sectors, where the appetite for clean energy and price certainty remains strong despite the lowering of the loadshedding risk.

Having confirmed a five-year power purchase agreement with platinum miner Impala Platinum (Implats) on January 27, the Discovery Group company reported that it had also signed agreements with KP Lime, The Capital Hotels and Apartments, Balwin Properties, and Fortress REIT Limited.

In an interview with Engineering News, Discovery Green head Andre Nepgen said the electricity would be sourced from multiple wind and solar facilities being advanced to construction by independent power producers (IPPs) in various South African provinces, with the first wheeled electricity for Implats expected by the end of 2026.

Discovery Green was entering into exclusive procurement contracts with the IPPs (mostly wind generators) with the intention of supplying the electricity to multiple customers pursuing both decarbonisation objectives and price-path certainty.

Discovery Green is not an IPP investor itself, but rather a long-term offtaker and trader of the renewable electricity produced by IPPs and wheeled through Eskom and municipal networks.

By contracting across multiple generation sites and entering into contracts with multiple end customers, Nepgen said Discovery Green was able to offer PPA terms that were flexible in duration and could also match customer demand profiles.

The five-year PPA with Implats, for instance, will supply 90% of the electricity needs for Impala Refineries in Springs, Gauteng, cutting the operation's Scope 2 greenhouse-gas emissions by more than 852 000 t over the period and delivering 130 000 MWh of electricity yearly at a tariff that is decoupled from Eskom's rising tariffs.

The PPA with KP Lime, meanwhile, is for 10 years and will involve a yearly supply of 54 000 MWh of green electricity for the Bowden mine, in the Northern Cape, to meet 90% of its power needs.

A leading producer and distributor of burnt lime and dolomite, KP Lime was owned by IMR Metallurgical Resources and CEO Aneesh Misra said the initiative was aligned closely with the multinational's sustainability goals.

Nepgen also confirmed that long-term agreements of between 10 and 15 years had been concluded late last year with The Capital Hotels and Apartments, Balwin Properties, and Fortress REIT.

Collectively, the companies are seeking to replace more than 90% of their electricity demand with wheeled solar and wind electricity, reducing their yearly carbon emissions by a combined 39 000 t.

The 15-year agreement with The Capital Hotels and Apartments involved the yearly supply of 5 000 MWh for three of the company's properties in Gauteng, with founder and CEO Marc Wachsberger indicating that Discovery Green was selected for its high coverage and flexible, platform-based contracting.

Balwin Properties CEO Steve Brookes indicated that its 20-year contract was for the supply of 13 600 MWh of renewable energy yearly for four Balwin sites, while Fortress CEO Steven Brown indicated that the 10-year wheeling arrangement would increase Fortress's renewable-energy penetration to up to 100% across 14 buildings.

On what impact the likely ending of loadshedding and the potential slowing of decarbonisation progress as a result of the return of climate-sceptic Donald Trump to the White House could have on Discovery Green, Nepgen was sanguine.

The sharp fall in solar PV and wind costs had made the two variable renewable energy solutions highly attractive from a cost perspective and domestic companies, he said, were currently prioritising affordability and price-path certainty amid the welcome improvements to security of supply.

In addition, exporters were still aiming to mitigate the imposition of carbon taxes and border adjustments that remain medium-term...

JSE-listed Impala Platinum (Implats) has signed a five-year power purchase agreement (PPA) with Discovery Green for the supply of wheeled renewable electricity to its refinery operations in Springs, Ekurhuleni, from the end of 2026.

The mining company said 90% of the operation's electricity supply, or more than 130 000 MWh, would be sourced under the PPA, and would enable Impala Refineries to slash it Scope 2 greenhouse-gas emissions by more than 852 000 t over the PPA period.

COO Patrick Morutlwa said the PPA represented the first phase of the group's aggregator-wheeling programme, which was being pursued to assist it in meeting its target of reducing carbon emissions by 30% by 2030, against a 2019 baseline.

The programme is also seen as complementary to the group's own renewable-energy project pipeline, which includes a completed 35 MW solar plant at Zimplats, in Zimbabwe, the first phase in a 185 MW solar build at the operation.

Without providing details, Implats also confirmed that the deal would yield costs savings, with CEO Nico Muller saying only that it represented a "significant lever in our ability to control input costs".

Discovery Green CEO Andre Nepgen also refrained from providing pricing specifics in an interview with Engineering News & Mining Weekly, but confirmed that the PPA had been structured to deliver both cost savings and price-path certainty.

This, in a context where Eskom's tariff request is under adjudication by the regulator, with the utility having requested increases of 36.15%, 11.81% and 9.1% for the coming three years.

Nepgen confirmed that the PPA was one of the largest, but not the largest, wheeling transaction concluded by Discovery Green, with further PPA announcements to be communicated in the not-too-distant future.

He said the electricity wheeled under the PPA would be nine times that of the consumption of Discovery's high-profile head office in Sandton and would be sourced from multiple wind and solar facilities being advance to construction by independent power producers (IPPs) in various South African provinces.

Discovery Green has entered into exclusive procurement contracts with the IPPs, the majority of which are wind generators, with the intention of supplying the electricity to multiple customers that, like Implats, are pursuing decarbonisation and seeking price-path certainty.

"We are not the IPP nor do we invest in the actual project. We are long-term off-takers of the energy from these projects," Nepgen explained, revealing that the electricity would be wheeled through the Eskom network.

By contracting across multiple generation sites and entering into contracts with multiple end customers, Discovery Green is able to offer PPA terms that are flexible in duration, with the five-year PPA with Implats being one of the shortest concluded. It then seeks to match the energy supplied by the variable generators with the demand profile of the various customers.

Discovery Green's 'take-and-pay' offering has been facilitated through a trading licence it secured last year from the National Energy Regulator of South Africa, notwithstanding Eskom's objections.

The utility subsequently launched a legal review of the decision, which Nepgen acknowledged represented a possible risk.

However, he said various actions were being take to mitigate that risk while expressing optimism that the concerns being raised by Eskom could be addressed by changes to the "tariff mechanics", which he acknowledged had not kept pace with developments in the electricity market.

Eskom has appealed to the National Energy Regulator of South Africa (Nersa) not to again postpone the implementation of a new retail tariff plan (RTP), warning that any delay will further entrench prevailing incorrect price signals to consumers.

However, this appeal came amid warnings that the changes being proposed by Eskom could carry unintended consequences for municipal distributors and their customers, undermine nascent efforts to unlock new generation through wheeling, and penalise households and firms that had invested in rooftop solar systems.

In a presentation made during Nersa hearings into the RTP, Eskom's Onicah Rantwane said the changes proposed sought to align the tariff structure with changes under way in the electricity sector, including increased self-generation and wheeling of energy, as well as ensure fair and equitable revenue recovery from all customers.

The tariff structure was last revised in 2012, despite previous applications by Eskom in 2020 and 2022 for an update of the RTP, including a separation of fixed network and capacity charges from variable energy charges.

"Currently, we have a situation where customers with self-generation and customers that are wheeling through the Eskom grid are receiving the grid backup without having to pay for the associated standby costs.

"Through this plan we are saying: 'let's start to introduce the price signal for standby costs'," she explained, warning that there would be negative consequences for other customers, especially poor customers, should there be a delay in sending such a signal.

The adjustments, Rantwane insisted, were not intended to raise additional revenue but rather to reallocate the charges in a way that reflected the costs.

However, while the total tariff revenue would stay the same, Eskom acknowledged that certain categories of customers might pay more under the new structure.

The proposed Eskom RTP includes a number of far-reaching propositions, some of which are popular, such as a proposal to abandon the confusing inclining-block tariff. Others are more controversial, including the introduction of a fixed generation capacity charge and moves to remove a credit available for those wheeling electricity across the Eskom network.

The other major changes include updated time-of-use ratios and hours, a consolidation of municipal tariff from ten to three, further unbundled residential tariffs, a removal of the credit for the affordability subsidy in wheeling and offset tariffs, and raising customer services charges at the point of delivery rather than by account.

Given the breadth and depth of the changes, various presenters at the hearings highlighted areas of risk and unintended consequences, including City Power's Frank Hinda who warned that implementing the structural changes, as tariff increases for the coming three years were about to be determined, could increase price-path uncertainty.

Nersa is currently at the tail-end of adjudicating Eskom's sixth multiyear price determination (MYPD6), where the utility has requested increases of 36.15%, 11.81% and 9.1% for the coming three years.

"While the RTP is not meant to result in tariff increases, the structural changes will result in increases for certain customer categories," Hinda said, while calling for a delay in the implementation of any changes.

"The application should be referred back to Eskom for further consolidation for possible implementation during the second and third year of the MYPD6," he argued.

Several other concerns were also raised, including one by the Sola Group, an independent power producer that is building new generation capacity on the back of power purchase agreements with corporates that have been facilitated by wheeling arrangements with Eskom.

Sola's Jonathan Skeen warned that the proposed wheeling changes in the RTP could lead to an immediate erosion of economic benefits associated with large-scale solar PV deals by up to 40%, which would represent a "substantial mar...