Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
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Overview of <strong>Multi</strong>-<strong>Year</strong> <strong>Price</strong> <strong>Determination</strong><br />
2013/14–2017/18 (MYPD 3)<br />
5.2.1 Energy efficiency versus demand management<br />
Page 103 of 144<br />
The electricity grid‟s total system load factor, at about 76%, is high. Such a profile requires<br />
energy reduction as well as load reduction. As a result, IDM has shifted focus towards<br />
energy efficiency. However, demand management is still needed to mitigate system risk.<br />
Projects, initiatives and targets must clearly distinguish between these two key objectives.<br />
IDM aims to implement measurable and sustainable demand and energy-reduction<br />
interventions by introducing energy efficiency and load-reduction technologies and<br />
behaviours into customers‟ electricity purchasing patterns. If adequately funded, <strong>Eskom</strong>‟s<br />
current IDM initiatives can rapidly contribute to closing the foreseen energy gap. This is<br />
important, because the risk of load-shedding and the requirements to reduce energy<br />
consumption are crucial to ensuring security of supply.<br />
5.2.2 <strong>Eskom</strong>’s role in administering IDM<br />
Energy efficiency and demand-side management are key levers for ensuring security of<br />
supply in the short to medium term. Success of the IDM programme is essential. Given<br />
<strong>Eskom</strong>‟s strong vested interest in ensuring security of supply and the constrained system<br />
capacity, <strong>Eskom</strong> believes it should play a key role in implementing energy efficiency and<br />
demand-side management in the foreseeable future, using the Nersa-appropriated funding<br />
recovered as part of the current and future MYPD processes.<br />
However, it is acknowledged that the policy direction by government is that in future energy<br />
efficiency and demand side management initiatives will be funded centrally through the<br />
fiscus using the environmental levy.<br />
IDM is an essential tool with which to manage the constrained electricity system. The<br />
following are key benefits:<br />
<strong>Eskom</strong> actively manages security of supply, focusing on all possible levers<br />
available to address the situation. Solutions are evaluated, costed and prioritised<br />
on an integrated “total basket of solutions” basis. Direct control over all key levers<br />
to address the challenge, particularly IDM, is essential to optimise cost, expedite<br />
delivery and ensure appropriateness of the selected solutions.
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