Eskom Winter Tariffs: Three Charges, Three Levers

Your July bill is on the desk. Next to it sits a proposal for a battery.

It quotes a saving per kVA. You check that rate against your bill. It’s there in black and white. So the sums look solid.

They’re not. Not the way that proposal has done them.

There are three charges on your bill. Eskom’s winter tariffs push each one a different way. And one of them responds to nothing you can install.

Eskom’s winter tariffs aren’t one price. They’re three.

People say “electricity went up” as if there were one price. On a large industrial connection there are three, and they behave nothing alike.

1. Time-of-use energy charges. Cents per unit, changing by hour and season. The lever is load shifting — same work, cheaper hour.
2. Demand charges. Rand per kVA per month, billed on your worst half hour. The lever is peak clipping — flattening that spike.
3. Capacity charges. Also rand per kVA per month. But billed on a whole year of usage. There is no equipment lever at all.

That third one is where proposals go wrong. Add up every R/kVA line, multiply by the kVA someone promises to shave, and the answer comes out too big.

New to demand charges? Start with why your business electricity bill is so high. This post assumes you know what the kVA line does.

Lever one: load shifting moves energy charges

Imagine petrol cost six times more between seven and nine in the morning. You’d fill up at night. That’s a time-of-use tariff.

Megaflex is the Eskom-direct version. It applies above a notified maximum demand of 1 MVA. Your NMD is the size of supply you booked with Eskom.

Off-peak never moves. It is 120.03 c/kWh in July and in December. The whole seasonal story sits in one bar.

So the winter spread is 720.19 − 120.03 = 600.16 c/kWh, excl VAT. Call it R6.00 of value for every unit you shift out of peak and into the night.

In summer the same move is worth 298.89 − 120.03 = 178.86 c/kWh. Same battery, same behaviour, roughly a third of the value in October.

Lever two: peak clipping moves demand charges

Demand charges are a different animal. They are billed on your highest half hour. Cut your units by a fifth and you pay the same charge.

Think of a dam wall. The battery catches the flood so the peak never reaches the meter.

On Megaflex this lever is modest. The network demand charge is R26.29/kVA/month. Real money at scale, but the energy spread is bigger.

On Nightsave Urban (Large) it is the whole story.

Nightsave isn’t time-of-use on energy. It runs 177.20 c/kWh in winter against 170.21 in summer. Shifting load buys you almost nothing.

Its energy demand charge, though, swings hard with the season.

• Winter (Jun–Aug): R332.91/kVA/month
• Summer (Sep–May): R77.88/kVA/month

Add the R26.29 network demand charge. Now the sum that matters is this:

R332.91 + R26.29 = R359.20 per kVA, per month, in winter. In summer, R77.88 + R26.29 = R104.17.

Shave 100 kVA and that’s R35,920 a month through winter, R10,417 a month through summer.

A year runs three winter months and nine summer ones. So (3 × R35,920) + (9 × R10,417) = R201,513 a year, excl VAT. All from clipping one spike.

More than half of it lands in three months. So your commissioning date matters as much as your system size. For how clipping is done on site, see our guide to battery storage and load management.

Lever three: the charge nothing on site can move

Then there is the network capacity charge. It is R39.13/kVA/month.

On the bill it looks exactly like a demand charge. Same units. Bigger number. It is not one.

Capacity is billed on your annual utilised capacity. That’s a figure drawn from a whole year of usage, anchored to your NMD.

Think of it as rent on the size of your connection. You pay for the floor space whether you fill it or not.

Clip 100 kVA off this month’s peak and this line does not move.

The only way down is to renegotiate your NMD with Eskom. That’s an application with a lead time, not a setting on a controller.

Ask which R/kVA lines a proposal assumes will fall, and why.

There is a legitimate play, though. A battery that holds your peak below a lower ceiling gives you evidence to justify an NMD reduction. That saving follows the application, not the install.

The lever you pull decides what you buy

In winter a weekday has two peak blocks of about two hours each. One early morning, one early evening. Look up your own times in Appendix A, Figure 2.

Two hours, twice a weekday. That sets the machine. Stored energy follows block length. Power rating follows peak depth. Get those backwards and you buy the wrong one. See 1 MWh vs 500 kWh for peak shaving.

Worked example: what R6.00/kWh of spread is worth

Per winter weekday:

• Peak energy avoided: 800 kWh × 720.19 c = R5,761.52
• Off-peak energy bought to refill: 800 ÷ 0.90 = 888.9 kWh × 120.03 c = −R1,066.93
• Flat riders on the 88.9 kWh lost to round-trip losses. Legacy 24.14 + ancillary 0.42 + electrification and rural 5.37 + affordability 5.10 = 35.03 c/kWh: −R31.14
• Net: R4,663.45 a weekday

Across 22 weekdays that’s about R102,600 a month. The same sum on the summer peak rate of 298.89 c/kWh nets about R28,400. Over a full year, roughly R564,000 excl VAT.

Two honest caveats. Those flat riders apply to every unit, whatever the hour. And round-trip losses mean you buy more energy, so that line is a cost.

You can layer demand shaving on top. Clipping 400 kVA is 400 × R26.29 = R10,516 a month.

When none of this applies to you

Plenty of sites peak mid-morning, inside a standard period. The battery is flat by then, so the demand lever never fires.

If your peak-period use is small, the six-times spread has nothing to bite on.

And if your connection is 100 kVA or under, your tariff may have no R/kVA line at all.

Check that before you spend a cent. Our savings calculator gets you close.

Five weeks of winter left — and next April is worse

The bill in front of you carries the 8.76% increase Eskom-direct customers took on 1 April.

If a metro supplies you rather than Eskom, you’re on a municipal tariff. Your increase landed on 1 July instead. eThekwini came in at 9%.

Now the part that shapes your capex plan.

NERSA miscalculated what Eskom is owed by R54.7 billion. A court forced public consultation. The regulator then chose to recover the error over three years.

That’s R12 billion in 2026/27 and R23 billion in 2027/28. Without it, this year’s increases would have been 5.36% and 6.19%.

The instalment you’re paying now is the small one. It roughly doubles next April.

That changes none of the arithmetic above. It changes what the arithmetic is worth over a project’s life. Our tariff and load-shedding forecast covers it.

What to do with your July bill this week

Find three things before the high season ends.

1. Your tariff name. Megaflex and Ruraflex are arbitrage plays. Nightsave Urban is a demand play. They need different equipment.
2. Every R/kVA line, and the rate beside it. Separate capacity from demand. Only one responds to a battery.
3. Your kWh split across peak, standard and off-peak. That tells you if the energy lever has anything to work with.

Then get twelve months of half-hourly data, not a monthly summary.

You need to see whether your peak sits inside a peak block or an hour outside it. That one fact is worth more than every assumption above.

Frequently asked questions

What’s the difference between a demand charge and a capacity charge?

Both are billed in rand per kVA per month, so they look identical. The demand charge is set by your worst half hour this month. The capacity charge is set by a whole year of usage. Only the first falls when you clip a peak.

Will a battery reduce my capacity charge as well?

Not directly. The R39.13/kVA/month capacity charge is billed on annual utilised capacity, so one good month doesn’t move it. What a battery gives you is proof you can run below a lower ceiling. That’s what an NMD reduction application needs.

Should I be load shifting or peak clipping?

Your tariff decides. If your energy rate changes by the hour, shifting work into cheaper hours is the lever. If a rand-per-kVA line dominates your bill, clipping the spike is. Most sites have one clear winner.

I’m supplied by my municipality, not Eskom. Does this apply?

The three-charge structure usually does. The numbers don’t. Megaflex, Nightsave Urban and Ruraflex are Eskom-direct tariffs. If a metro bills you, you’re on its own schedule, which moved on 1 July. Pull that booklet before you model anything.

Should I wait for summer rates before installing?

Waiting saves nothing and costs you a winter. Summer is the sensible time to build, precisely because savings are lowest then. You want the system commissioned and proven before the next high season starts in June.

Allen Meyer

Director of Engineering · Terawatt Energy

Writes the Insights blog when not on a site.

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