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Holding down costs

Worldwide, developing countries have come to the conclusion that electricity is essential for the growth of their industry and commerce. At the same time, investing in electrification is a social responsibility that must be handled prudently to gain the most from utility investment in new infrastructure. We are seeing a trend worldwide to electrify regions that have never had access to reliable service. South Africa is only one such country with this desire to build out distribution to reach unserved areas.

The South African utility, Eskom, has electrified 3.3 million households over the past 11 years. From 1995 to 2000, 300,000 connections per year were made. The costs were borne by Eskom as a social investment. This represented around 200 projects running simultaneously with around 1000 transformer-zone designs that had to be investigated and approved by Eskom.

In order to achieve this ambitious plan with around eight staff members, it was critical that we develop indicators to help us determine target costs per connection. Good indicators enabled us to compare the cost-effectiveness of our engineering designs needed for the massive expansion of our distribution system. Without indicators, we found it impossible to select a strategic direction with optimal transformer zone designs to enable Eskom to meet the electrification challenge.


The table provides a few examples of our distribution indicators as a function of region, which provides Eskom personnel targets for which to aim. (The indicator values listed are pertinent to South Africa and may not suit all conditions.)

Eskom personnel were provided guidelines that directly impacted the cost to serve. Areas addressed include:

  • Average span length

    Present structures are designed with a factor of safety of 4.5 to cater to 150-m (492-ft) spans, often with hare conductor.

  • Methods to minimize angle structures

    Checks are routinely made to assure that direct routes are selected where possible.

  • Bare-wire low voltage (LV)

    If the customer density is low, bare-wire LV should be considered.

  • Average span length for ABC conductor

    This should be around 60 m (197 ft) at a minimum.

  • Average utilization of angle structures

    We expect to increase utilization of pole capacity from 20-30% to 60%.

  • Total transformer capacity/number of connections

    This ratio is to check whether the transformer capacity suits the stated average diversified maximum demand design.

  • Material cost as a portion of total cost

    This is an indicator of efficiency. It should be around 0.6.

  • Number of connections per pole top

    In high-density areas this should be around 6 or 8; in lower-density areas, a figure of 4 or 2 might be acceptable.

  • Single-phase connections as a ratio to three phase

    Single phase must be considered as a first option, with reasons given if it is rejected.


Prior to developing our indicators, we found that individuals were floundering with an extremely high workload, but without a clear vision of what steps to take along the electrification road. Now we find that with an approved set of objective indicators, our designs are rarely rejected. Our consultants are also more productive as they understand more clearly what is expected of them from Eskom Distribution.

Prior to the use of indicators, connections typically cost 2000 rand (US$300) but climbed to the region of 4000 rand to 6000 rand (US$1000) as services were provided to more rural areas with population densities dropping from 1200 households/km2 (463 households/miles2) or greater to 30 households/km2 (11.58 households/miles2). With the use of indicators, we have reduced the costs per connection by more than 50% in real terms in the period from 1995 to 2000, in spite of electrifying deeply rural areas. This process has continued with funding from the government, although differences in priorities and requirements have led to an increase in costs in the last three years.

Rob Stephen is responsible for the Capital Programme in Eskom Distribution, and advises on technical aspects.

Distribution Indicators
Connection cost (rand) 3084 2824 2554 2827
Cost per km (rand) 53,541 57,410 65,049 59,608
MVA per km 0.02 0.02 0.03 0.01
Transformer per km 0.42 0.31 0.56 0.47
Connections per km 22.56 24.80 32.33 24.83
Subtransmission infrastructure as a percent of total investment 21% 16% 19% 14%
These costs are indicative only. Actual costs at present could vary widely.
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