A new R2 billion conditional grant will create new opportunities for cash-strapped local authorities.
Gallo Images/Brenton Geach
- National Treasury will support R2 billion in conditional grants for the rollout of smart meters.
- This should allow heavily indebted municipalities to collect revenue more effectively and also allow for the introduction of load shedding.
- This funding will be provided over the next three years.
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A new R2-billion conditional grant announced by National Treasury will help debt-laden local authorities finance the rollout of smart metering equipment to residents, increasing revenue and enabling load shedding. There is a possibility that it will become.
Finance Minister Enoch Godongwana announced the new conditional grants in his 2024 budget speech on 21 February.
Local authorities approved for Eskom debt relief will be able to fund the rollout of smart electricity meters to their customers. The funding will be distributed in multiple installments over the next three years.
Although quite expensive compared to other electricity sales methods, smart metering devices allow authorities to remotely turn on and off power, detect tampering, limit the load that can be delivered by the meter, and register the electricity exported from the premises. becomes possible.
This opens up certain possibilities for municipalities where a significant proportion of customers use smart meters.
Chris Yelland, energy analyst and managing director at EE Business Intelligence, said the primary purpose of this development is likely to be to enable these municipalities to collect more revenue from electricity sales. said.
Smart meters can detect customers who tamper with their meters or fail to pay their bills, and remotely turn off those customers' devices. This means that, in theory, you should lose less by supplying non-paying or fraudulent customers.
This will be particularly important for the 70 local authorities that have been approved for Eskom debt relief, with a combined debt of R55.2 billion for public services.
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Chris Gower, Buffalo City's revenue protection manager, said revenue could only improve if systems were developed that required little human intervention and were seamlessly integrated.
Another benefit of smart meters is that this device can facilitate load shedding schemes. The scheme takes demand off the grid by limiting the amount of electricity available to households, rather than turning off some areas completely.
This means that households can use devices that do not consume large amounts of energy during load shedding periods, rather than switching off completely.
“Implementing a load shedding schedule is very similar to a load shedding schedule,” Gower says.
Since last year, Eskom has been piloting a load shedding system in certain areas of Johannesburg. Due to early success, the pilot is being expanded to more regions.
Read | More Joburg suburbs will be able to use basic household appliances during load shedding – Eskom
In addition to this, smart meters can sell solar power capacity to the grid if the authorities facilitate this. This is commonly referred to as a feed-in tariff.
Yelland said this is not a feature eligible for this subsidy, as these customers will likely be able to fund the purchase of their own smart meters.
“The intent of these smart meters is more focused on the mass market.”
Mr Gower said councils with access to smart meter subsidies were likely not able to fund the equipment on their own.
“There are clearly some local governments that are struggling with cash flow, and the national treasury is supporting these local governments. [delivery] And to try to secure income,” he said.
