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Renewable Energy Tariff Q and A

N1A.jpgWhy is Eskom introducing the Renewable Energy Tariff?

Eskom is creating a renewable energy, utility solution to help customers deliver on their renewable energy commitments. The Renewable Energy Tariff pilot programme will allow all our customers to source up to 100% of their electricity from Eskom’s renewable sources.  We understand that many businesses are faced with corporate renewable energy commitments.  The RET pilot programme gives customers a mechanism to achieve their corporate renewable energy commitments, without the initial capital investment in an owned generator and provides flexibility to relocate to different sites - and provides a supply of non-variable renewable energy over a 24-hour period.

N2.jpgWhat is the Renewable Energy Tariff?

The Renewable Energy Tariff to be charged for the contract period will be a c/kWh rate, payable in all time periods, and in addition to the current Eskom tariff charges.  It will be based on the percentage of renewable energy in kWh of the actual energy that the customer agrees to purchase over a period of 12 consecutive months (contracted capacity).

N3.jpgHow do you apply to take part in the RET?

Customers can contact their relevant Key Customer Executives, or for additional information and assistance contact our project manager at
The application process will involve the following:

The customer completes an RET application letter to indicate interest in the pilot. The letter should indicate the needed contracted percentage of renewable energy, contract capacity based on a forecast of the actual renewable energy to be consumed during the contract period, the applicable supplementary rate and the contract period. Eskom will then approve and reserve the contracted capacity for the selected contract period. The customer accepts the contractual conditions by signing a Supplementary Agreement to his/her current Electricity Supply Agreement. The contract will start on the selected start date and Eskom will then issue a monthly electricity account which includes an additional line item detailing the deemed Renewable Energy consumption and the associated Renewable Energy charge.

N4.jpgHow do you calculate your forecast for the contract period?

The forecast will be based on a historical total annual actual electricity usage (baseline) of at least one year including adjustments if production should change during the contract period for existing plants or load calculation if it’s a new plant. Eskom will be able to assist in data for the baseline for all Eskom Large Power Users.

N5.jpgHow much will this move to renewable energy cost?

The customer decides what percentage of the annual electricity consumption must become renewable energy.  So if he/she wants to convert between 1% and 10% the electricity consumed will cost 25c/kWh, between 30% and 40% will be 18c/kWh and between 90% and 100% will be 5c/kWh.  So the more renewable energy the customer wants to concert to renewable energy, the cheaper it becomes.  This will be charged separately from the normal electricity consumption, as a separate line on the electricity account.

N7.jpgHow is the contracted capacity determined and tracked?

The customer selects an affordable percentage of kWh which must be Renewable Energy. This percentage will be contracted as deemed Renewable Energy and charged monthly. Eskom will at the end of 12 consecutive months after the contract start date evaluate the actual percentage (the amount of Renewable Energy in kWh that was consumed by the customer over the 12 consecutive months) against the contracted percentage.  If the actual capacity is less than the contracted capacity (not as a result of any failure by Eskom to supply the full contracted capacity), Eskom will adjust the Renewable Energy Tariff based on the actual percentage and the Renewable Energy charge payable by the customer will be adjusted accordingly. The customer’s next electricity account will be adjusted to reflect the difference.

N6.jpgWill I be able to purchase additional capacity if my actual capacity is less than the contracted capacity?

Only if capacity is available and signing of a new contract will be required.  Therefore it is important to forecast the percentage of renewable energy as accurately as possible.

N8.jpgWhat is the average time frame for an application to be approved?

The duration of the forecast study will depend on the customer. The approval of the contracted capacity will be concluded within a week.

N9.jpgIs there any additional cost to the RET?

If customers only take part in the RET, the additional c/kWh rate payable in all time periods over and above the current Eskom tariff charges will be the only cost. For those who combine wheeling and the RET, they will pay additional administration and wheeling charges as per the standard wheeling and banking agreement.

N10.jpgWhat is the contract period duration?

The RET is a simplistic short-term renewable energy purchase with the minimum duration of one year and a maximum of two years. The tariff will kick off on1 April 2020 and will run until 31 March 2022, as it is a pilot project.

N11.jpgWhat if I’m not able to start on the 1st of April 2020?

The contract can start on any date from the 1st of April during 2020 as long as the minimum period is 1 year. The contract will then be 1 year plus the remaining months until the 2 year pilot has stopped.

N12.jpgHow does Eskom certify the Renewable Energy?

Eskom will issue a monthly electricity account which includes an additional line item detailing the deemed Renewable Energy consumption and the associated Renewable Energy charge. Eskom is also involved in the development of a Renewable Energy certification platform during the pilot, but this will not necessarily be used to certify the renewable energy purchased during the pilot.

N13.jpgAm I allowed to combine the RET and Renewable Energy generated from a third party?

Yes, the RET can supplement wheeled energy from a third party or own generation on site where a customer wants to achieve a 100% renewable energy target, however the pilot is only for a 2-year period.

N14.jpgIf I wheel energy from a generator greater than 1MW and take part in the RET, am I allowed to bank the surplus   energy?

Banking will not be allowed for any generator with a maximum export capacity (‘MEC’) or actual exported capacity of more than 1 MW, in which case the banking of exported energy will not apply, unless taking part in the RET Pilot and provided that the Renewable energy consumption exceeds 40% of the total active energy.

What if I sign a Power Purchase Agreement with a third party over a 20-year period in combination with the RET but the RET is only for a 2-year period?

Eskom will honor the approval for banking for a generator with a maximum export capacity (‘MEC’) or actual exported capacity of more than 1 MW who takes part in the RET pilot for the 20-year duration of the power purchase agreement.