Wiktor Wise
South Africa's electricity is predominantly generated through coal-fired power stations, with approximately 85% of the nation's electricity derived from this method. Despite environmental concerns, coal will continue to be the primary source of electricity for the next decade. Eskom, a vertically integrated, state-owned power company, generates about 95% of the electricity used in South Africa and supplies it directly to 45% of end users, with the remaining 55% being resold by redistributors. However, some South Africans have resorted to bridging electricity, which involves illegally tampering with meters and purchasing electricity tokens from unauthorized vendors. This practice has led to fines and disconnections by Eskom, leaving some residents without electricity for extended periods. To address the issue of bridging, the Electricity and Energy Minister, Kgosientsho Ramokgopa, has urged individuals to make payments to have their meter boxes reactivated.
| Characteristics | Values |
|---|---|
| Topic | How to bridge electricity in South Africa |
| Electricity provider in South Africa | Eskom |
| Electricity cost structure | Block system with the first block at the lowest price |
| Cost-saving hacks | Buy electricity at the start of the month, buy electricity weekly, use the Spot app |
| Issues | Rising electricity prices, frequent power outages, transformer failures, illegal connections, meter tampering |
| Government plans | Unbundle Eskom into three separate entities, increase renewable energy capacity |
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What You'll Learn
Understanding the prepaid electricity system
In South Africa, approximately 95% of the electricity used is produced by Eskom, the vertically integrated, state-owned power company. The remaining 5% is resold by redistributors, including municipalities. There is no set fee for prepaid electricity across South Africa, and tariffs vary from one municipality to another.
Eskom introduced a block system to make electricity affordable for those who use little and to discourage high consumption. The first block of electricity is at the lowest price. As more electricity is purchased during the month, it will eventually fall into block two, which is more expensive. Therefore, it is recommended to buy electricity at the start of the month to take advantage of the lower rate in block one.
To save money, it is advisable to only buy enough electricity that will be needed for the month to stay in block one. It is cheaper to top up with a few units at the end of each month than to buy enough for two or three months, as electricity is more expensive in block two.
Additionally, buying electricity weekly can help keep track of usage and prevent purchasing too much and being pushed into the higher tariff of block two. It may take a few months to understand your average monthly electricity usage, so keeping a note on your phone can be helpful.
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Avoiding bulk electricity purchases
In South Africa, electricity prices are skyrocketing, and it's becoming increasingly difficult to determine how many units one is getting for the amount spent. The prepaid electricity system in South Africa is based on a block system, where the first block of electricity is at the lowest price, and as one buys more electricity during the month, they move into the second block, which is more expensive. This system is designed to make electricity affordable for those with low consumption while discouraging high consumption.
To avoid purchasing electricity in bulk, one can follow these strategies:
- Buy electricity at the start of the month: At the beginning of each month, electricity usage is reset, and one starts off in block 1, which has the lowest rate. Thus, buying electricity at the start of the month ensures one gets the most units for their money. However, it is important not to buy too much electricity, as this will push one into block 2, which has a higher rate.
- Only buy what you need for the month: It is more cost-effective to purchase electricity in smaller amounts and top up as needed rather than buying in bulk for several months. This strategy allows one to stay in block 1 and avoid paying the higher rates of block 2.
- Buy electricity from week to week: Making smaller, more frequent purchases helps one keep track of their usage and prevents them from being pushed into the higher tariff of block 2. Over time, one can better understand their average monthly usage and adjust their purchases accordingly.
- Purchase electricity through a bank: Most South African banks offer the option to purchase prepaid electricity using USSD, banking apps, or internet banking. This method is not only convenient and safer than carrying cash, but it can also save money by eliminating the time and transport costs associated with standing in queues.
- Maximise the benefit of tariff blocks: Understand how prepaid electricity is charged and aim to stay within the cheaper tariff blocks. Keep a record of your electricity usage to estimate how much you are likely to use each month, and work towards maximising the benefit of staying within the lower tariff blocks.
- Invest in energy-efficient appliances: One can also reduce their electricity costs by investing in energy-efficient appliances and adopting habits that reduce electricity usage, such as switching off lights when not in use.
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Buying electricity through the right app
Prepaid electricity is becoming the preferred method for paying for utilities in South Africa. There are several apps available for purchasing electricity, each with its own unique features.
One such app is Prepaid24, which offers a free monthly electricity breakdown for every meter on your profile, including a 12-month overview of your electricity spend. This can help you understand your consumption trends and make better-informed purchases. Prepaid24 also provides automatic recurring purchases, so you don't have to worry about forgetting to top up your meter.
Another option is Powertime, which was the first to introduce electricity vending mobile apps back in 2010. Their app is available on a wide range of devices, including iPhone, iPod Touch, Blackberry, Windows, Android, and Nokia. With Powertime, you can buy electricity anywhere and at any time.
SnapScan is another popular app for purchases, payments, and services in South Africa. You can use the app to buy prepaid electricity wherever you see the SnapScan sign.
Electricity.co.za also offers an online and phone application self-help service, allowing you to buy prepaid electricity through an EFT or deposit to their bank.
When choosing an app, consider factors such as convenience, additional features, and compatibility with your device. It is also important to keep in mind that the cost of electricity is based on how much you buy rather than your monthly usage, so it is recommended to make smaller, more frequent purchases to keep track of your usage and avoid higher tariff blocks.
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Using renewable energy sources
South Africa has been working towards diversifying its energy sources and incorporating renewable energy sources into its energy sector. The country has made significant investments in renewable energy, and its renewable energy sector is gradually developing.
The South African government has implemented policies and programmes to support the adoption of renewable energy sources, such as the Renewable Independent Power Producer Programme (REIPPP) and the National Development Plan (NDP). The REIPPP aims to increase the number of megawatts in the nation's electricity grid through private sector investment in renewable energy sources. As a result of the programme, over 6,000MW of generation capacity has been granted to bidders, with wind and solar energy being the primary drivers of this expansion.
In 2022, the President announced that the IPP Office would double the procurement of renewable power per annum to address the load-shedding crisis. This move also included scrapping the licensing cap threshold, which was previously set at 100MW. The NDP provides a framework for future power generation in South Africa, with energy policies driven by the Department of Mineral Resources and Energy's Integrated Resource Plan (IRP). The IRP estimates the demand for electricity and determines the types of energy generation required to meet that demand.
South Africa has also been investing in wind energy, with about 30,000 wind turbines installed in arid and agricultural regions since the early 1990s. Additionally, the country has leveraged approximately $135.6 billion in investment across various renewable energy projects, including wind, solar, small hydro, landfill gas, and biogas. The United States is currently the largest source of foreign direct investment in South Africa's renewable energy sector.
By incorporating renewable energy sources, South Africa can diversify its energy mix, reduce its dependence on crude oil imports, and promote sustainable development.
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The role of Eskom
Eskom is a vertically integrated, state-owned power company that generates approximately 95% of the electricity used in South Africa. It is the biggest producer of power in Africa, and about 45% of all end users in South Africa receive their power directly from the firm, with the remaining 55% being resold by redistributors, including municipalities.
Eskom's primary challenge is meeting the rising demand for power while ensuring economic growth. The company has had to significantly increase its traditionally low prices to garner resources for investments, and these price hikes have affected all sectors equally. Despite these price increases, Eskom's electricity rates remain some of the cheapest in the world.
Eskom has also had to address significant debt levels, with South Africa's National Treasury drafting measures to handle the utility's USD23 billion debt load. In 2019, the South African government announced plans to unbundle Eskom into three separate entities responsible for generation, transmission, and distribution. This move was welcomed by Eskom as a crucial step in legally separating the transmission business.
Eskom has been at the centre of discussions surrounding the improvement of South Africa's energy efficiency. The company has been encouraged to apply utility price increases more strategically to incentivize industries to improve energy efficiency. Additionally, the inclusion of smart grid technology in any grid upgrades could significantly improve efficiency in electricity generation and distribution. Eskom has also been mentioned in the context of illegal electricity bridging, with false claims circulating on social media that the company would pay individuals for reporting illegal electricity connections.
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Frequently asked questions
Bridging electricity refers to the act of illegally obtaining electricity, often by tampering with meter boxes and purchasing electricity tokens from unauthorised vendors.
People bridge electricity to avoid paying the high cost of electricity. In South Africa, the more electricity you buy in a month, the more you pay and the less you get.
Electricity and Energy Minister, Kgosientsho Ramokgopa, has urged individuals using electricity illegally to make payments to have their meter boxes reactivated. Eskom, South Africa's primary electricity provider, has fined residents over R6,000 each and required payment or a payment agreement before restoring power.
Eskom has been working to address the root cause of transformer failures in affected areas by conducting audits, disconnecting illegal connections, and repairing tampered meters. Eskom has also welcomed the National Energy Regulator of South Africa's (NERSA) decision to allow the National Transmission Company South Africa (NTC) to operate a transmission system within the country, which is a step towards legally separating the transmission business.
