With Eskom’s announcement on Monday of even more winter load shedding — putting 2022 on track to being the worst year of blackouts ever — we are all, once again, looking for answers. Will South Africans ever be able to get through a chilly winter with reliable energy to reliably light up and heat our homes?
According to Meridian Economics’ recently-published report on South Africa’s power crisis, one answer is that, optimistically, load shedding could be practically eliminated by 2024 with full security of supply reached by 2025. That raises another question — how likely is this to come to fruition?
The "game plan" for energy security mapped out by Meridian’s report would require substantial effort from the national government in fixing and completing its existing renewables procurement plans (the infamous Renewable Energy Independent Power Producer (IPP) Procurement Programme). It would also entail several political U-turns from the ANC on the regulation of the electricity sector.
While the report is an outstanding piece of research and one that could be of great use to policymakers, there remains the strong possibility that its recommendations will go ignored by the national government, which seems to remain heavily invested in Eskom as the sector’s dominant player and coal as the country’s primary energy source.
In Cape Town, we have taken the view that we cannot sit around waiting for the national government to change course, and must do whatever is in our power to tackle the crisis head-on, ourselves.
The first round of bidding in the city’s IPP procurement will close this month, after which we will move through the complex legal work of selecting preferred bidders, negotiating pricing, and awarding tenders. While we are expediting the process as much as possible within the complex legal framework that governs municipal procurement, the first of these projects will only begin providing load shedding relief over the medium term.
In the short term, our residents ask, what are we as the City of Cape Town doing — in addition to the relief already offered by our pumped storage scheme at Steenbras, which allows City customers to avoid up to two levels of load shedding — to mitigate load shedding and increase the city’s energy security?
Our first stopgap policy is demand-side management, which is premised on the fact that residents would rather have some electricity (for lights and cooking, for example) during load shedding periods than none at all. Demand-side management will entail the rollout of devices to hundreds of thousands of Capetonian homes, allowing the city to remotely shut off high-demand appliances (primarily geysers). This would usually happen at peak usage times in the early morning and late afternoon, obliging customers to run these appliances at off-peak times when energy is more abundantly available to the grid.
If all goes according to plan, and depending on the public’s response to the idea, this policy could be implemented as soon as autumn next year.
The second policy is one about which I am particularly excited, but has not received adequate public attention until now, possibly because it’s often spoken about in highly technical terms.
Simply put, wheeling involves "transporting" energy from a private generator to a private user, using a public distribution network. This happens in terms of a contract whereby the private user pays the private generator for the energy they produce, at a rate agreed to by the two parties. The user also pays the municipality (or whichever organ of state owns the public distribution network) a fixed rate for their use of the network.
There are two situations in which wheeling is particularly appealing to electricity users. The first is where a large user (a shopping centre, for example, or a factory) has requirements for embedded generation that are greater than what can be generated with the floor/roof space available. The second is where a large generator, with ample space for generation, generates a greater amount of electricity than can be used on the property or surrounding properties.
In both these instances, enabling generators to "transport" their electricity to users with whom they have contracts of sale for power would lessen these users’ reliance on the public grid. If a considerable number of users start using wheeling in this way, the resultant drop in demand for public energy will lessen the risk of load shedding.
Because the price paid for energy by the parties to a power purchase agreement relying on wheeling is not fixed by the state, the implementation of this policy is also an important first step towards energy market liberalisation in South Africa.
There are already some examples of wheeling projects taking place over Eskom’s network. The most notable, perhaps, is Amazon Web Services’ solar PV project in the Northern Cape, which is expected to generate 28 000MWh per year, equivalent to the usage of 8 000 average South African households. The project is set over 20 ha of land — a footprint which would simply not be available where AWS is based in Gardens, Cape Town. Allowing the "transportation" of electrons in this way not only improves AWS’s energy security, but allows them to avoid emissions of 25 tons of CO2 annually, equivalent to 5 400 cars.
Wheeling at a municipal level for a wide array of customers requires a complex legal, tariff and billing framework. The City has drafted such a framework, and we will begin live-testing and refining it in the next few months with our year-long wheeling pilot project. Applications for users wanting to participate in the pilot project close on 30th June. At the project’s conclusion, we will be ready to fully open our wheeling facility to the market.
Ending load shedding in South Africa within our current legislative and political reality requires relentless innovation and finding small but substantial ways to change the status quo in the interests of energy security. Demand-side management and wheeling are two such ways.
We’re proud to be building an energy-secure future in Cape Town, and I hope Capetonians will join us on this journey by enthusiastically participating in these projects.
Hill-Lewis is the mayor of Cape Town. Views are his own.
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