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- National Treasury will support a R2 billion conditional grant for the roll-out of smart meters.
- This should allow heavily indebted municipalities to recover revenue more effectively and allow load limiting to be introduced.
- The funding will be available over the next three years.
- For more financial news, go to the News24 Business front page.
A new R2 billion conditional grant announced by National Treasury will help municipalities in debt to finance the roll-out of smart meter devices to residents, which have the potential to increase revenue collection and allow for load limiting.
Finance Minister Enoch Godongwana announced the new conditional grant at the 2024 Budget Speech delivered on 21 February.
Municipalities that have been approved for Eskom debt relief will be able to finance the roll-out of smart electricity meters to customers. The funding will be made available in tranches over the next three years.
While significantly more expensive than other electricity vending methods, smart meter devices allow authorities to power on and off remotely, detect tampering, limit the load that can be drawn from the meter, and register electricity exported from the property.
This opens up certain possibilities for municipalities with a significant proportion of their customers using smart meters.
Chris Yelland, energy analyst and managing director at EE Business Intelligence, said that the primary goal of the roll-out was likely to help these municipalities recover more revenue from the sale of electricity.
Smart meters can detect customers who tamper with their meters or fail to pay their bills, and remotely switch those customers' devices off. This means, in theory, that less money should be lost supplying non-paying or fraudulent customers.
This will be especially important for the 70 municipalities that collectively owe R55.2 billion to the utility and have been approved for Eskom debt relief.
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Chris Gouwer, the revenue protection manager at Buffalo City, said revenue is only likely to improve if a seamlessly integrated system is developed that requires little human intervention.
Another benefit of smart meters is that the devices can facilitate load-limiting schemes, where demand is taken off the grid by limiting the amount of electricity that a household can draw rather than completely switching some areas off.
This would mean that households would be able to use devices that don’t draw significant amounts of energy during load limiting periods rather than being completely switched off.
"Very similar to load shedding schedules you would implement load limiting schedules," said Gouwer.
Since last year, Eskom has been piloting load limiting systems in certain areas of Johannesburg. Owing to initial success, the pilot is being expanded to more areas.
READ | More Joburg suburbs will be able to use basic appliances during load shedding - Eskom
In addition to this, smart meters enable the capacity for solar power to be sold to the grid should an authority facilitate this. This is commonly called a feed-in tariff.
Yelland said that this is not likely a functionality being targeted by this grant as these customers are likely able to fund the purchase of their own smart meter.
"The intention for these smart meters is more focused on the mass market."
Gouwer said the municipalities that will have access to the smart meter grant likely would not have been able to finance the equipment themselves.
"There are some municipalities that are obviously cash strapped, and National Treasury is assisting those municipalities in terms of [delivery] and to try to secure their revenue," he said.
