Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
Page 105 of 144
Supplemental Demand Market Participation is a product where customers reduce load
within 30 minutes to an hour of receiving the request from the system operator. Customers
have to reduce load for a minimum of two hours and are compensated for the energy
reduced.
The original Demand Market Participation programme focused on a relatively small number
of customers with high consumption levels. An opportunity exists to increase the market by
focusing on smaller customers in the industrial and commercial markets. Due to the
administrative burden of such an approach, an aggregation approach is being followed,
using intermediate parties to contract and manage customers. The Demand Response
Aggregator Pilot Programme was introduced to address the flexible load obtainable in the
smaller commercial, industrial and agricultural sectors. The programme allows customers
that have as little as 100kW of flexible load to participate in demand response. The aim is to
sign up at least 500MW during 2012/13, increasing the total capacity to 1 500MW by winter
2013 and 2 500MW by winter 2014.
Funding for both the Demand Market Participation and Demand Response Aggregator Pilot
programmes are included in the MYPD 3 submission.
Table 44: Demand market participation costs (R million)
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 MYPD 3
Demand Market Participation (Rm) 4 552 3 275 1 973 1 972 1 835 2 001 11 056
5.2.4 Energy Conservation Scheme
The ECS is a proposed energy reduction legislation for the 500 largest electricity users that
sets a reduction target and imposes punitive charges for non-compliance. It is intended as a
safety net and should not be activated if voluntary demand reductions are achieved.
ECS is a key element in the suite of solutions to reduce the supply-demand gap. It can be
implemented in a relatively short period of time (nine to 12 months from finalisation of the
rules) to provide the bulk of the required demand reduction and associated energy savings
(up to 6 000GWh per year). In addition, ECS will provide the pricing signal to ensure the