South Africans have been suffering from electricity shortages for several years. These conditions worsened, with Eskom, the country's power utility, operating at only half of its power generation capacity by the end of 2022.
As a result, Eskom has been forced to increase rolling blackouts. By mid-January 2023, users were typically without power for 8 to 10 hours per day. The situation is unlikely to improve significantly in the short to medium term. This year, the country's electricity supply is expected to be reduced, with electricity sometimes being available for only 12 hours a day, as demand increases, especially during the winter months.
It is unlikely that the situation will improve in the medium to long term. The country's electric power companies are in a precarious financial situation.
As a result, South Africans are increasingly being forced to seek alternative sources of electricity. Businesses, from large corporations to small households, are even considering whether it is possible to completely disconnect from Eskom's grid and produce all their own electricity.
Fifteen years ago, South Africans had access to abundant electricity at the lowest prices in the world. But since then, electricity prices have soared to an average of four times the rate of inflation.
Factories, mines, farms, businesses and individuals are now choosing to reduce their dependence on Eskom's network by supplementing their electricity with home-generated electricity. This will reduce demand on Eskom electricity supply, but the levels that have occurred so far are not sufficient to significantly reduce power outages. The construction of large-scale private solar power plants, which some major companies have already begun, and the growing interest in rooftop solar power generation in residential areas will gradually be felt. However, even this cannot completely stop power outages.
Some organizations may even go so far as to separate themselves from Eskom completely. How feasible is this?
Obstacle
Living off the national grid is nothing new for many South Africans. The apartheid government deliberately delayed the electrification of black residential areas, especially rural areas of the country. Where electricity was available far from urban centers, it was reserved primarily for the benefit of mining operations and white farming communities.
In the 1990s under the new democratic regime, Eskom made a concerted effort to expand supplies and services to some of its most remote areas. It received widespread praise and was awarded the Financial Times Global Energy Award. As a result, a large portion of the country's population began to enjoy access to then-unlimited electricity. The price was also relatively low.
However, this had unexpected consequences. Even if people are attracted to the concept of carbon-free renewable energy, the simplicity of sourcing reliable, low-cost electricity from Eskom makes any alternative energy uncompetitive. I did.
The second biggest hurdle is that until about 10 years ago, solar power was expensive. Subsequently, costs fell dramatically by a factor of 10 between 2011 and 2021, in line with international trends.
Eskom’s frequent power outages with significant price increases and falling prices for solar power coupled with better storage options have completely changed the equation.
Alternative proposal
Let's briefly discuss the three onsite power options.
Diesel generators: This established technology is already common in rural areas and was adopted by many homes and businesses during early waves of power outages. However, diesel options are not cheap and the fuel is subject to price fluctuations. Additionally, generators require maintenance, are noisy, and produce smoke.
Biogas: This is produced from rotting agricultural residue or organic waste that is collected in municipal landfills. South Africa's agricultural sector produces abundant fuel for this technology, which could lead to further applications in rural areas. However, it is not practical for residential or commercial use.
On-site solar power: South Africa has plenty of sunlight. Additionally, the price of solar panels has fallen significantly over the past decade. Efficient large-scale battery storage options are also becoming increasingly viable. A permanent disadvantage of solar installations is their inability to survive long periods of cloudiness.
The initial impetus for the large-scale transition to rooftop solar came from large corporations with the financial wherewithal to invest in what amounted to full-scale private solar installations. These include mines, factories, shopping malls, and farmland. These companies expect to recoup their investment costs in just a few years.
Smaller organizations, including households, are also starting to follow this trend.
To leave the grid or not?
Although it is theoretically possible to install enough solar panels and storage batteries to get a household through a week without sunlight, this is still far from an economically optimal solution.
Companies that invest in in-house solar power capacity now maintain access to Eskom electricity even during periods when solar power is unavailable or insufficient. Their main objective is to reduce electricity bills and ensure backup power during Eskom's temporary power outages.
In theory, you can increase the number of panels and battery capacity until you can provide electricity for several days. In this way, long periods of cloudiness can be bridged. However, getting the equipment costs money.
However, South Africa is a country with unusually long daylight hours. This means that those who get by with occasional power outages may be tempted to abandon the Eskom grid altogether, especially if punitive tariffs are imposed on those seeking only occasional Eskom back-up power. be.
However, medium and large businesses that require uninterruptible power supply are more likely to choose a self-generated hybrid model with Eskom backup. This trend has started and will continue to grow. But it is clear that the past paradigm of complete dependence on Eskom will change forever.