Eskom’s plan to control electricity to your home gets R2 billion boost

Finance Minister Enoch Godongwana announced yesterday that a new conditional grant will be created to fund the rollout of smart prepaid meters.

In his 2024 Budget Speech on Wednesday, 21 February, the minister said R2 billion has been allocated for this grant.

In addition, the meters will initially be rolled out in municipalities that have been approved for Eskom debt relief.

By December 2023, 72 municipalities had submitted their applications for this debt relief, and 70 applications had been approved as of January 2024.

The National Treasury will distribute this grant as follows –

  • R500 million in 2024/25
  • R650 million in 2025/26 
  • R800 million in 2026/27

This adds up to R1.95 billion – the minister did not address when the remaining R50 million would be distributed.

The plan to roll out smart meters across South African households was announced in 2023 as a way to fight load-shedding through demand-side management.

“Given the strategic and financial benefits smart meters offer, i.e. cost saving, digitalization and enabling smart grids, and as part of the distribution strategic objectives, Eskom embarked on the smart meter project,” Eskom told Daily Investor last year.

“The objective of the project is to replace about 6.9 million meters with smart meters as part of the meter maintenance programme, at an estimated cost of about R15 billion.” 

Eskom said the project will be implemented in phases over a period of five years – ending in 2027 – and also depending on the availability of the budget and allocation per annum. 

The utility said 400,000 meters have been installed to date following a successful pilot in Fourways

“In the initial phase of rolling out the pilot, we experienced some challenges which we addressed as the pilot progressed,” Eskom said. 

The utility said it constantly engaged with residents and had to dispatch technical teams several times to resolve challenges experienced by customers. 

Electricity Minister Kgosientsho Ramokgopa

Following the successful implementation of smart meters in Fourways, Eskom has since expanded the programme to Riverside View. 

Eskom said last year that residents in the area are also receiving the programme well. 

The smart meters support two-way communication, which empowers Eskom to limit the power supply to a home.

Eskom’s group executive for distribution, Monde Bala, said the smart meters enable the utility to reduce the current passing into a household from 60 amps to 10 amps. 

This allows the property to keep some basic appliances on, such as lights, a TV, and a WiFi router. 

Reducing the current to 10 amps will also ensure that traffic lights in the area remain functional. 

However, households will not be able to use energy-intensive appliances such as geysers, microwaves, and kettles.

Electricity Minister Kgosientsho Ramokgopa defended this plan in an interview with eNCA earlier this year. 

Households consume roughly 16% of Eskom’s installed capacity, and during peak times, this rises to 35%.

Half of this consumption is from geysers. Thus, as part of the solution to end load-shedding, the government wants to ensure that geysers are turned off when not in use. 

Ramokgopa clarified that this does not mean South Africans will not have hot water when needed. Instead, they will only have hot water when they need it. 

According to the government’s estimates, turning off geysers can save 3,500 MW of electricity. They aim to reduce the demand for geysers by a minimum of 1,000 MW. 

South Africans turning off geysers “contributes to the resolution of the energy crisis” and will also result in significant savings for consumers. 

The smart meter installation costs an estimated R3,000, which Ramokgopa said will be recouped in savings from lower electricity consumption within five months. 

A “major financier” will also partner with the government to facilitate the rollout of the smart meters and provide financing for poorer households. 

Ramokgopa said South Africans should do this out of “genuine commitment to resolving the problem of load-shedding”. 


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