Voltage-Differentiated Electricity Tariffs and Economic Evaluation of a Supply Voltage Choice: A Case of a Customer in South Africa


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Abstract


The cost of providing electricity to customers depends on the voltage at which they take supply. Because of this, many utilities around the world have electricity tariff rates that vary according to the voltage at which supply is taken. Economic evaluation of investments is a critical factor to ensure their worth, and this applies equally to electrical infrastructure, including customer load connection. In this paper, the authors evaluated the worth of taking supply at a higher voltage in comparison with doing so at a lower voltage. The impact of the customer’s load size and load factor on this worth was also studied. A case study considering voltage-differentiated electricity tariffs in Eskom was conducted. It was demonstrated that, in the case of Eskom’s scenario, taking supply at a higher voltage had a significant worth to eligible customers. Such worth increased significantly with load and factor. It was concluded that, in assessing the worth of investment, customers have to assess the impact of voltage choice on their investments carefully as this could help identify voltage that can make marginal projects worthwhile and those that are justifiable even more robust
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Keywords


Economic Evaluation; Cumulative Net Present Value; Net Present Value (NPV); Electricity Tariff; Payback Period

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