LICENCE FEES COLLECTED BY ESERA UP BY 18.6%

MBABANE – The amount of licence fees collected by the Eswatini Energy Regulatory Authority (ESERA) in the fiscal year 2022–2023 was E44.1 million, up from E37.2 million the year before.

In the year under review, the authority experienced a considerable increase in licence fees collection. This reflected an increase of about 18.6 per cent. This was reportedly because the authority’s scope had been broadened to include petroleum licensing. Worth noting is that ESERA was no longer relying on government subvention for its operations, but is now sustained by the licence fees it collected. The regulatory was last funded by the government subvention during the 2019/20 financial year. During this year, ESERA was funded through a government subvention (9 per cent) and licence fees (91 per cent) for its operations.

For electricity licensed, the licensing fee rate remained at 1 per cent of total revenue requirement, while petroleum-licensed businesses paid E0.02 for every litre of projected fuel sales.
ESERA realised a surplus of E0.598 million in the financial year 2022/23 compared to E0.564 million in the previous year. The total income achieved in the fiscal year 2022–2023 was E47.3 million, up from E38.8 million in the prior fiscal year. However, the authority’s operational costs were at E38.2 million and E46.7 million in the fiscal years 2021– 2022 and 2022–2023, respectively.

ESERA’s non-current assets amounted to E8.4 million while current assets amounted to E12.5 million and current liabilities amounted to E2.3 million in the financial year 2022/2023.
ESERA further reported that during the financial year under review, the total number of customers connected to the grid increased by 4.26 per cent from 258 304 in 2021/22 to 269 331 in 2022/23. The ratio of domestic customers to the national customer database remained high at  92.5 per cent with 249 014    domestic customers out of 269 331 customers in total as at the end of the financial year.

Increase

Among the customer groups, the largest increase was recorded from industrial customers, whereby a rate of 5.69 per cent increase was observed during the year from 2.9 per cent in 2021/22. This was followed by domestic customers (4.32 per cent), commercial customers (3.54 per cent), and irrigation customers at 1 per cent. The year under review also saw a 23.5 per cent increase in local generation, which effectively reduced imports by 3.4 per cent compared to the 2021/22 financial year. Some of the reasons for the increase in local generation during this period favourable dam levels because of adequate rainfall and an increase in the number of own-use Small Scale Embedded Generation (SSEG) facilities, mostly from solar PV by domestic and commercial customers.

The total approved capacity from SSEGs increased from 17.27 MW in 2021/22 to 21.28 MW in 2022/23. The total energy units sold through the national grid over the year increased by 0.51 per cent from 1 123.64 in 2021/22 to 1129.4 GWh in 2022/23. This increase was attributed to the growing demand for energy as more economic activities take place, among other reasons. In pursuit of its mandate, the authority continued with its initiatives to create an enabling regulatory environment through the development and implementation of various regulatory instruments and strategies. These seek to drive sector reforms as guided by the relevant energy policies. These include, but are not limited to the development of a wheeling framework, review of the grid code, development of a mini-grids and off-grids regulatory framework, review of quality of service and supply standards as well as implementation of the small-scale embedded generation framework.   

Furthermore, the local electricity generation mix had been dominated by generation activities from the Royal Eswatini Sugar Corporation (RES Corp); the Eswatini Electricity Company (EEC); Ubombo Sugar Limited (USL); USA Distillers and Wundersight. RES Corp and USA Distillers, however, use their generated electricity exclusively for their own consumption. There was no major power generation facility that was commissioned during the year under review. However, capacity from exempted SSEGs, which was installed for own use, increased by 4MW.

Capacity

The generation mix which had always been dominated by biomass generation, with about 52 per cent share (in the current year), saw a growth in installed capacity for solar PV as more consumers, particularly those with industrial loads, moved towards self-generation. Hydropower remained the second major contributor to the generation mix with a 31 per cent share.
Meanwhile, the country remains a net importer of electricity with about 70.70 per cent of its demand met through electricity from neighbouring suppliers such as Eskom in South Africa, EDM in Mozambique and the regional market (i.e. Southern African Power Pool).  The total imports for the financial year 2022/23 decreased by 3.43 per cent from 901.46GWh in the previous year to 870.58 GWh. The past five years have seen a gradual increase in local energy generation from 624.40 GWh in 2021/22 to 709.91 GWh in 2022/23.

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