The National Energy Regulator of South Africa (NERSA) is reviewing Eskom’s application to amend the methodology used to calculate the generator losses charge – a move that could reshape how embedded generators are billed for network losses.
Eskom’s proposal, published by NERSA on October 23, seeks to replace the existing rebate system with a cost-reflective approach based on new technical studies. The utility argues that the current method effectively subsidises some users and no longer aligns with actual network losses experienced when transporting power through the grid.
The revised methodology would apply to generators connected to Eskom’s distribution network from the 2026/27 financial year. NERSA emphasises that the process concerns a methodology amendment, not a general tariff increase, and that the generator losses charge represents energy lost as heat in conductors, transformers and other grid components.
Eskom says the updated formula will promote fairness in cost recovery, improve grid efficiency and encourage generators to locate closer to demand centres where energy losses are lower. NERSA has invited written submissions by November 13 with a virtual public hearing set for November 24. Feedback from the Grid Code Advisory Committee and other stakeholders will inform the regulator’s final decision.
