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Electricity Regulation Act, 2006 (Act No. 4 of 2006)


Integrated Resource Plan 2019

2. The IRP in Context

2.4 Electricity Tariffs


As wholesale and retail electricity tariffs rise, we can expect more electricity users to look for alternatives like rooftop PV systems (residential) or utility scale PV generation (mines and other big industrial users) and migrate away from the electricity grid.


More fuel switching is to be expected, particularly in regard to the thermal load (water heating, cooking and space heating) as electricity tariffs increase and alternatives like LP Gas become available and cost effective.


Non-technical losses are increasing at municipal level. At a certain point the willingness to pay (WTP) threshold is breached for more and more municipal customers, and they either actively pursue alternative sources to meet their energy demand, or they stop paying for the electricity service.


Consumers can expect the electricity disruptions (driven by load shedding or poor quality of supply) and high tariffs to drive the WTP threshold even lower.


Requests by industrial and commercial electricity users to deviate from the IRP and to develop their own generation exemplify the trend. While at this stage it is not quantified, most residential estates, commercial parks and shopping centres have installed PV systems to supplement grid supply.