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As part of Investec’s In conversation event series, titled Sustainable living – Empowering solutions, Melanie Humphries (head of Investec Sustainable Solutions) has an in-depth discussion on the ongoing energy crisis with expert, Chris Yelland.
The energy supply conundrum
If you're looking at the state of electricity in South Africa, you need to look at Eskom and the state of municipalities, because, together, they form the electricity supply industry, says energy expert Chris Yelland
“Eskom is divided into generation, transmission and distribution and we don't have enough available generation capacity. We have enough capacity, but it's not always available, because of maintenance and breakdowns. Transmission is not performing too badly. The power is getting from the sources of generation, through the grid, to the various cities and places. But it's been underinvested for more than a decade.”
He adds that access to the grid, by new generation capacity, is becoming difficult. There's also constraints on the backbone of the grid and some of the areas need upgrading and investment.
“Eskom does distribution and it's not so different from the municipal distribution. About half of the power outages you probably experience, are not due to generation capacity constraints, not due to grid constraints, but are due to problems on the distribution network.”
Electricity theft is also overloading the system, cable theft is causing outages, there are steel theft, copper theft, aging infrastructure, and poor maintenance.
“I just want to say, that we do not have an energy crisis in South Africa, we have management problems, financial problems, skills problems. A kind of a management crisis of getting the electricity from the point of generation to where it's needed.”
Are the plans good enough to get us out of this crisis?
Yelland explains that we have a few plans in place but are also missing a few plans. “There's the Integrated Resource Plan for Electricity. But it happens to be five years out of date. We were supposed to have an Integrated Energy Plan in 2008, and it's never been published. We do have the president's plan, we have the Presidential Climate Commission, we have the National Planning Commission, we have the South African Renewable Energy Master Plan, which has just been published for public comment. The point is, now we need to get past planning, into the execution phase.”
Get a back-up power plan – reduce reliance on the grid
With energy, Yelland continues by saying that South Africans are now taking steps to supplement our energy needs while remaining on the grid. The grid is an important enabler that connects people, households, and factories and enables a level of efficiency that cannot be achieved in standalone off-grid solutions. We have a grid-tied system or a hybrid system.
“I believe that people who install battery and rooftop solar PV are part of the solution and not part of the problem. The more people that install rooftops, batteries, and storage, the better for everyone. It's a win-win situation. You're going to have increased security of supply, you might even save some money. Eskom is going to benefit, because you're reducing the burden that they, currently, are unable to meet. Lastly, all those people that are not installing rooftop, they're going to benefit because they're going to have reduced loadshedding.”
Build an energy-efficient home
Financial expert, Maya Fisher-French, states that we are worrying about our water and energy security. She thinks we need to understand that we are dealing with limited resources, globally limited resources, and anything that we consume, is going to have an impact on the environment.
“We need to start looking at ourselves, as consumers, and saying, how do we be more efficient, and use the resources we have, more efficiently?
“When we bring it into our home, and especially if you're looking at putting in solar systems, you need to make your house as energy efficient as possible, before you put it in. That means you need less of a system, so you need to spend less money.”
But it’s not just about energy-efficient heating and lighting, but mindsets and behaviour. "Put the bucket back in the shower and use that water to flush the toilet. Wash your clothes in cold water and use phosphate-free detergents. And eat brown sugar. It takes a takes a huge amount of energy to white sugar to brown.”
Home solar installation solutions and costs
Yelland says that with solar PV and battery storage, installing backup power in your home can be relatively simple and affordable. It is a battery, inverter, and solar PV.
It's going to cost you R60 000 to R75 000 for a fair size system. Obviously, it depends on the size of your house, etc. The battery is modular, so you can expand these as you may see fit. Your inverter is not easy to expand, because it's not modular.
“But if you want to save money, the next step is to invest in solar PV. You can start and expand it in a modular way. And I think most people will be spending probably one R150 000 to R200 000, depending on the size of your house, and how big your family is etc.”
Buy or rent a solar solution or sell power back into the grid?
Fisher-French comments that in terms of the rental systems, there's a debate. People are saying yes, because then they can upgrade the technologies. It's expensive to rent. You're not going to get the energy saving to cover that cost, so be realistic about that.
“If you buy a system of R150 000 and either you're financing it at prime, or you're taking money that you would have invested somewhere else, that's an opportunity cost. So if you’re paying it off over 15 years, that's about R1 700 a month. But, you’re not yet getting R1 700 a month from my electricity saving. As electricity prices are rising and interest rates go down, the system will pay for itself over time.”
But another big question is around selling into the grid. Fisher-French says that it is a good idea to put a smart meter in and it's going to cost you R12 000. You're getting back R1.25 per kilowatt hour. You would have to have a big installation for that to start making sense.
“I have a different view. I think that if you can afford to put a system in your house, what I would rather do, is get a smart meter for free and the grid can have all my excess energy to help subsidise other people's electrical needs.”
The solar pitfalls
For Fischer-French, it is important to ensure you have insurance and a Certificate of Compliance if you are putting in a solar system. “If you don't and it burns down your house, you're not covered.
The other reason is building insurance - make sure that you're fully insured, because the building cost of replacing your building has gone up.”
Yelland mentions that adding additional power sources for home electricity complicates your house and there is the potential for things to go wrong. “If you switch off your inverter, you think you're safe to climb on the roof and clean your panels. If the sun is shining, there's voltage on the panels. That voltage can be lethal. So this idea of a safety feature to have zero DC voltage on the roof, when you need zero voltage on the roof, that is a safety feature that, in some countries, has become mandatory. In SA it is not mandatory.”
On the PV panels, he says there's a lot of connections and they're all interconnected. If you have a loose connection, you can get DC arcing. DC arcing is like a welding torch on your roof. It's a really high temperature. It's very hard to extinguish a DC arc and it can cause a fire.
On the inverter, be careful not to install the inverter in a cupboard - you need ventilation. “It gets hot. Most of your systems will be lithium-ion batteries. If a cell inside your battery pack goes into thermal runaway, then cells next to it get hot and also go into thermal runaway and there’s a fire. Lithium fires are very difficult to put out. A normal fire extinguisher doesn't work. And if you spray it with water, you're making it worse. You need special chemicals to put out a lithium fire.”
Incentives for individuals and business
For Yelland, it is the incentivisation of rooftop solar PV and battery storage. Eskom is introducing a new tariff called the Home Flex Tariff, where the price they pay for energy into the grid, from private power generators, is the same, in rands, as the price that you buy electricity from Eskom. There are some conditions attached to it.
“You've heard about the tax incentives for rooftop solar PV. I think the domestic incentive is also weak. It's R15 000 rebate, maximum, on the cost of solar PV panels only. But the business incentive is good. You can write off 125% of the full cost of your system, inverters, batteries, the whole lot, installation, and materials, in one year. That's a big incentive for business.”
Electricity from our neighbours
Yelland states that SA imports a lot of electricity from Mozambique, and so it's wrong to suggest that we export power to Mozambique. We do export power to our neighbours, Zimbabwe, Botswana, and Namibia. It's quite small in the scheme of things.
“The point is that we live in a regional economy. What's good for our neighbours, is good for us. What's good for us, is good for our neighbours. There's electricity trading that takes place in the power pool. When there is a surplus in SA of energy, we trade our surplus to our neighbours. So the trading of electricity is an important balancing mechanism between supply and demand. We make money from it.”
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