“If Eskom was not experiencing such challenges why would anyone try to change it?”
Almost 8 years after the last major loadshedding in South Africa, the Eskom debacle has once again dominated the national debate. But within this so called crisis how can South African cities start to lead and invest in new ideas and innovation to power their long term future. Can the cities afford to take a backseat?
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Amid the Eskom“crisis” very few have much good to say about this government agency, even when the lights are not out South Africans anxiously await the announcement of the next bout of outages. But could this “crisis” be turned into an opportunity? For South African cities it could become an opportunity to seize the moment and move away from coal powered electricity generation to renewable energy – and take the lead in the energy future of the country. In order for this opportunity to be realised and taken full advantage of, cities and citizens would need to step up to the plate and engage with new ideas and roles to drive energy generation in direction of renewables.
The grim outlook on the energy crisis is portrayed in the media almost daily. South Africa’s hopes of becoming one of the world’s top renewable energy hubs are “dimming due to poor infrastructure and delays as cash-strapped state utility Eskom is distracted by a scramble to keep the lights on” says Wendell Roelf in a recent Reuters article .
This appears to be a contradiction. Should the failure of Eskom to keep the lights on not be aiding the hopes and opportunity for South Africa to become one of the world’s top renewable energy hubs? The lack of Eskom’s success provides South Africa with the ideal opportunity to grow its renewable energy sector. If Eskom was not experiencing such challenges why would anyone try to change it?
While there is no certainty on how South Africa’s cities will grow and what their exact demands will be going into the future it is important to consider the potential direction that the energy sector is heading, and should be heading, if cities are to play a larger role in securing their energy future.
“load shedding between stages 1 and 3 costs the economy anywhere between 20 billion rand to 80 billion rand per month”
Background and Eskom context
The electricity sector of South Africa is organised in a vertical scheme and operated by state-owned enterprise, Eskom. Eskom owns all the transmission lines and produces 96% of the electricity generated in the country. Eskom provides bulk prices for electricity to be provided to municipalities who then sell this to customers using block tariffs. These municipalities serve 52% of customers while Eskom serves the remaining 48% directly.
Eskom has severely underestimated the energy demand of South Africa due to poor maintenance and planning. During the week-days the average capacity of all power stations is 30 000 MW while the weekday demand is about 31 000 MW, a shortage of 1000MW; assuming that none of the plants are undergoing maintenance reducing the capacity, sometimes by as much as 29%. Over the weekend, the demand and supply are more or less equal at 29 000 MW but maintenance issues may tip the scales in an unfavourable direction causing loadshedding to occur on the weekends, too. This resultant widespread loadshedding, which comes with a multitude of knock on effects, the blow suffered by economic growth being the greatest, costing South Africa up to 80 billion Rand per month, as estimated by Chris Yelland, the country’s leading energy expert. The Department of Public Enterprises addressed parliament on 25 March stating “load shedding between stages 1 and 3 costs the economy anywhere between 20 billion rand to 80 billion rand per month”.
Here lies the problem; the South African economy is still reliant on, and driven by coal with 93-94% of all energy generation being coal powered. This places even greater demands on Eskom who simply cannot and perhaps should not be expected to keep up with economic and population growth of the country. The pressures placed on the coal giant needs to be shared amongst various providers and means of energy generation in South Africa. Coastal cities, such as Cape Town, should be among the first to consider alternatives to Eskom due to the great additional transport costs from far-away coal generators to the coast. Serving Cape Town alone incurs transmission lossess between 200MW-500MW.
Some of the answers to resolve this strain on the electricity grid are ironically provided on Eskom’s website which lists some of the viable renewable resources, which includes solar generation, wind, biomass, hydropower, wave power and other less viable resources including geothermal, but there is no mention of the involvement of independent companies.
What cities can do
“Large metros have to be key drivers in the quest to find urgent solutions to the energy crisis” announces Cape Town’s Executive Deputy Mayor, Alderman Ian Neilson. He was speaking at the recent Energy Efficiency Forum held in Cape Town. The forum was established in 2009 by the City of Cape Town in collaboration with Eskom & South African Property Owners’ Association (SAPOA). It is currently co-funded by Old Mutual, and supported by other organisations with the aim to address issues surrounding energy, its use and generation in South Africa.
“We are committed to working together with business on how to best manage the electricity crisis, and also on how to take advantage of the opportunities it presents.” He urges other metros to join and to “actively participate in constructive responses to mitigate the impact of the electricity supply shortage on the commercial sector”. “Metros are the growth engines of the country and the full effect on business operations, investment and job creation in South Africa is yet to be felt” adds Nielsen. Being the second largest metro in the country with over 3.5 million people and an annual average growth rate of 2.6%, Cape Town intends on taking back its power. “With our partners in the Western Cape Government, Eskom and in the private sector, we must change the energy regime in Cape Town”.
The failure of Eskom to supply cities and towns with uninterrupted electricity,, raises the question of whether cities should become leaders in co-ordinating their energy future. And, if they can, how would they go about doing this?
Perhaps a start would be if cities became responsible for generating and selling electricity at a smaller and more manageable scale. Ideally this would encourage smaller, competitive suppliers to enter the energy market in each region of the country and to harness the elements best suited for that area to maximise energy production and minimise consumption.
Would it be a crazy thought that cities in 50 to 100 years could be independent of Eskom?
“I don’t think talking about complete independence from Eskom or the grid is sensible – both practically and politically for a number of technical, financial and policy reasons – for the foreseeable future” says Evan Rice, CEO of Green Cape. Green Cape is a special purpose vehicle funded by the Western Cape Government who support the growth of the green economy in the province to “realise the manufacturing the employment potential in the green economy”.
Maloba Tshehla, the renewable energy sector manager of Green Cape agrees that “complete independence from Eskom would not be practical in the near future, at least not for at a provincial scale. If we look at the technical expertise to run a grid, for example, this currently lies within Eskom only, and so it would take time to achieve such independence. Also, the grid works best as a wider, connected one, rather than separate entities across the country. For political reasons as well, grid defection, in any province, would not bode well for that province nor the national economy”. He continues by saying “A connected system is ideal in that it can balance itself out. Where resources are limited in one region, they can be sourced from another, whereas an isolated system would find itself stranded.” He adds that regardless of this “what is apparent, however, is that the future of energy lies in increasing distributed generation via sustainable, prosumer (producer consumer) generated electricity making use of renewable energy technologies. At the utility scale, renewable energy projects have reached grid parity with conventional technologies and so most likely to see increasing shares in countries’ energy mixes”.
“We firmly believe that municipalities should be empowered and incentivised to play a far greater role in jointly pushing forward solutions to our national energy crisis.”
But for energy specialist Dieter Holm, it is not such a crazy thought. “Forget the outdated model of centralised government power supply, holding helpless consumers to ransom” says Holms, who works for Enviropaedia focusing on design and assessment of energy efficiency and renewable energy in buildings.
The “new model is the democratisation of power by distributed prosumers (producers that are also consumers) who are less dependent on a collapsing system and on the failing grid”. “A whole city becoming independent from Eskom and shifting towards renewables will not happen overnight.” However, the ultimate goal, and one the City of Cape Town in conjunction with industry and the population, should be working towards is ultimate independence from the national grid in order to have more localised control of the energy supply. Some of the many benefits for adopting a localised energy supply system is that decisions can be made quicker and on a local scale and communication between consumers and producers is made far easier” adds Holms.
The switch to renewables is a “long term commitment and politicians with their short term political cycles often don’t have the will or the power to see them through on the scale that we require” explains Dele Adeyemo from Pidgin Perfectworks, who works on projects around citizen engagement in renewable energy. The focus according to Adeyemo then needs to “shift to the private sector who often view projects and commitments with the long term benefits and investments in mind”.
The City of Cape Town is currently engaged with a multitude of programs to promote renewable energy use says Councillor Matthew Kempthorne, the chairperson of the Energy and Climate Change Portfolio Committee for the City of Cape Town. “The City has two programs, the solar water accreditation program and our small scale embedded generation policy (SSEG). The first helps to facilitate residents on installing solar water heaters, [while] the SSEG policy allows residents and business to feed excess power [from their personal generation] back into the city’s electrical grid. At the moment the metering solution (monitoring electricity feedback into the grid for SSEG) is expensive and safety concerns are an issue as the City needs to maintain the grid and it can be dangerous to work on the grid if power is flowing from households that are incorrectly or illegally connected”.
This suggests that there is potential in Cape Town to encourage renewable energy use and generation as some large solar plants currently have a feedback scheme in place such as Black River Park in Observatory. There is, however, no infrastructure on a smaller scale to cater for household electricity generation and grid feedback. It is interesting to note that this problem is not unique to South Africa, as many European countries are experiencing the same shortcomings in dealing with feedback schemes and the dangers that come with it. Major losses were experienced by the two biggest power utilities in Europe, German power giants E.ON and RWE, during the transition to a renewables-based energy grid and the swift phasing out of nuclear power.
Neilson believes there is no one solution to the energy crisis in South Africa. “We firmly believe that municipalities should be empowered and incentivised to play a far greater role in jointly pushing forward solutions to our national energy crisis”.
Being a semi-arid country, solar energy is a recurrent topic when talking about renewable energy sources in South Africa. There are multiple planned solar farms for the Western and Northern Cape with the Jasper solar power project in the Northern Cape already completed and operational, contributing 96 megawatts of power to the national grid. A second innovative project which could generate great amounts of energy for the city is the idea of “tapping our landfill gas as well as utilising our sewage sludge for energy” explains Councillor Matthew Kempthorne. This is one example of how the energy crisis has encouraged the city’s leaders to look elsewhere for potential energy, even turning to toxic landfills and finding the positive outcome of these. In the Richards Bay industrial area on the East coast of South Africa, a renewable energy company, Byromate, has signed an agreement to build a biomass electricity generation plant using three fuel sources around the area: forestry, sugar cane and waste from the agricultural sector. Councillor Kempthorne elaborates that the strategies for the future include the shift from diesel to gas, “more large scale renewable wind, solar PV and concentrated solar power (CSP). These three technologies are starting to become cost competitive with older style coal. The future is a mix of energy sources from these as well as small scale embedded generation at the local level”.
The City of Cape Town already has a feed-back scheme in place where “anyone can now apply to be an independent power producer in Cape Town” explains Adam Oxford in an htxt.africa article. “The city has had to create its own rules while the national regulator has failed to publish a first draft for general use”. This, however promising, is an expensive endeavour and is currently left to business and the wealthy few who have the extra Rands to dabble in such innovations. With the rising price of electricity tariffs upon us (12.69% for direct customers and 14.25% for municipalities) this is soon to become a common phenomenon in many households and not just a novelty for the few.
Freiburg, with a population of just over 200 000 people, is a world leader in renewable energy generation pushing Germany to generate almost 7% of its annual power needs through rooftop solar panels. The energy policy adopted in Freiburg, Germany, is based on the abandonment of nuclear energy. The renewable energy sources hailed in Freiburg are solar energy, biomass, hydro-power, wind-power and geothermal energy which are coupled with efficient technologies and energy saving practices. Freiburg promotes the Low Energy House (LEH) Standard which is based on insulation principles. Government subsidises these insulations to both restorations of older houses and the building of new houses. This shows that for renewable energy to take effect and become effective in any city all roleplayers need to be on board and supportive of the shift away from coal and nuclear power.
Aberdeen in Scotland is another example of a city investing itself to boost the local economy by harnessing renewables. Aberdeen is planning to become a global pioneer by using hydrogen produced from excess power in its offshore wind farms. The city already boasts a fleet of hydrogen-fuelled buses.
Read about the world’s first hydrogen-fueled tram in China
Commercial engagement and future role
The commercial sector is seizing this opportunity to shift into the energy sector. An American-listed company, NRG Energy, announced in March 2015 that it will be entering the South African energy market, headed by executive chairman Grant Pattison to seek out opportunity amid the country’s power crisis. Pattison said that NRG will offer hybrid solutions, which includes a variation of wind or solar power energy generation. This energy company will also supply micro-grid solutions where generation plants will be constructed for companies to operate a mini, independent grid. NRG aims to develop the market for the purchase of independent power agreements in South Africa.
This is where the commercial role becomes vital. As more firms enter the market, the more viable renewable energy projects will become and this will pose a major challenge to the current coal dominant economic situation within South Africa.
In the exciting future of renewable energy the consumer can even take on the role of the producer and hence the term prosumer is coined. Because of the nature of renewables being free and accessible to all, it becomes the prerogative of the individual whether they chose to benefit from this fact.
“the age of prosumer”
Is the future of energy in the hands of the citizens?
The city dwellers, the eventual users of electricity will have an ever increasingly vital role to fulfill in the future of electricity consumption and even production through solar panels on the roof of houses, for example. As previously mentioned, the prosumer will be born in the future of cities. There may no longer be that dividing line between the producer, such as Eskom, and the user, such as yourself. The future of energy in South Africa, and globally, should be one of blurred lines between the producer and the consumer. One where all can contribute towards the grid and all can use what is being contributed.
Dieter Holm looks at the basics that need to be established before the future of renewables can even be considered. Holm says that before renewable energy can be promoted energy efficiency needs to be achieved. “Everybody is bleating about Eskom, but circa 50% of our final energy is heat, 30% transport and only 20% electricity. Cape Town can be a leader by promoting energy efficiency in its own buildings, and by promoting and upgrading existing buildings. Buildings consume about 40% of our electricity and cause 30% of greenhouse gases over a longer life than power stations”. But energy efficiency ultimately comes down to the individual and actions undertaken by each household in the move towards conserving energy.
Reyana Nacerodien says the energy crisis poses an opportunity for property owners and tenants to seriously evaluate how energy efficient their properties are. Habits and building practices will have to change drastically in the future to make renewable energy most effective and efficient and therefore individual’s behaviour will be altered, instead of the blasé “should” be altered.
Adeyemo confirms that citizens have enormous power in shift to renewables within cities. “The power that citizens have is to shift culture away from a sense of dour individual guilt to one of collective action through creating citizen events and initiatives that bring people together in fun ways that celebrate the opportunity of renewables and green lifestyles”. He goes on to say “It is incredible to see how these relatively small scale activities create broad networks of people within the city and across the country powerful enough to begin transforming culture and engendering greater citizen participation”.
Ultimately it boils down to citizen participation and a cultural transformation which is still far away in Cape Town unfortunately as energy efficiency is not on the agenda of the citizenship but it is slowly moving its way towards the top of the list and in the future may force its way up to number one as the city realises the pressing need for cultural revolution. The shift towards Cape Town becoming a leader in renewable energy starts with the individual citizens and the drive and persistence from citizen movements within the city environment.