Aweh dearly beloved fellow ruminants & groupies
For those of you who don’t live in South Africa just a quick reminder of what load shedding is. Load shedding is a South African term to describe rolling power blackouts because there is insufficient electricity generation to meet demand. This first started in 2008 but until the last two years was more the exception rather than the norm. In 2022 we experienced 205 days of load shedding. I suspect that in 2023 we could pass 300 days. This has an enormous impact on everyone living in South Africa.
There are currently 8 stages of load shedding depending on how severe the electricity shortage is. We currently have stage 6 until further notice. This means 3 power cuts a day totalling more than 8 hours. The reasons why we find ourselves in the current situation have been extensively analysed and Chris Yelland does this much better than I can.
It is worth reflecting on the featured graph, prepared by the energy analyst Clyde Mallinson, which shows the declining trend in the electricity availability factor (EAF) of South Africa’s coal power stations. The EAF simply measures the actual amount of electricity produced compared to nameplate capacity. According to this trend, the EAF will be lower than 50% this year. There are no concrete signs that this trend is about to be reversed anytime soon.
There has been much talk about independent power producers (IPPs) adding new renewable electricity capacity, but this simply isn’t happening. In the latest round of bidding (bid window 6) for renewable electricity only 0.86 GW of a planned 5.2 GW have been awarded. The reason advanced for this is a lack of distribution infrastructure in the western part of South Africa best suited to renewable electricity.
How are people responding to this and how is this going to play out? I will start by reflecting on how our household is now planning to deal with this and what other households and industries are doing. Then some thoughts about the consequences of society’s and industry’s response for the existing central provision of electricity.
About 10 years ago we bought a 2-kW inverter with two lead acid deep cycle batteries. This is a makeshift arrangement involving extension cords running around our house. We have replaced the batteries several times and at this level of load shedding their lifespan is 18 months at best. We power the routers, computers, the TV, and some lights. If the power cut lasts four hours, we quickly run into battery constraints if consumption is not managed. There have been one or two tense conversations in our house when ideas like plugging the iron into the inverter were mooted.
Of course, my family has been urging me to do more and so we are now going to install a solar system like so many of my friends and colleagues have done. There is a booming solar installation business in South Africa. The fantasy is to go off the grid, but the reality is that this is extremely expensive if you size the system for extended cloudy weather. The more practical alternative is a grid-tied system. This means you generate some of your own electricity and use the grid as required. The system involves PV cells to generate electricity when the sun is shining, lithium batteries to store electricity, an inverter, and an electricity management system and App. We will probably install a medium-sized system that has a 5.6-kW inverter, 5kW of solar panels, and 10 kWhr of lithium batteries. Each installation is unique but the published cost for this is in the R140-180 000 ($8 200-$10 600). Although you do save money on your electricity bill the payback period based on current electricity prices is more than seven years. For us, though it has now become more of an issue of insufficient electricity in our household than a financial investment. It has also made us all very conscious of electricity usage, leading to conservation. We waste less electricity. In the future, we will perhaps generate at least half of our electricity requirements ourselves.
Many families cannot afford this capital outlay but as to be expected financial institutions have stepped into the breach and there are monthly payment plans. I suspect that we are going to see a wave of installations perhaps lasting a couple of years as those that can afford to install these systems will do so. Businesses that can afford it will do the same. I also suspect that solar systems, although they are more expensive to install, will, outsell diesel generators because the cost, noise, maintenance, and inconvenience of running a diesel generator 8 hours a day will not be attractive.
Perhaps we are going to see several GW of private solar systems being installed in the next few years. This is a good thing, right? What is all of this going to mean for Eskom and municipalities that distribute electricity to paying customers? They are going to lose revenue from loyal paying customers and be left with poorer customers and customers who don’t pay for their electricity. In March 2021 Eskom had municipal debt arrears R31.5 billion which had risen to over R50 billion by September. The courts have intervened and have forced Eskom to continue supplying electricity to bankrupt municipalities.
Eskom is already technically bankrupt and can only continue with funding from the state, but the state is also over-indebted. Ultimately this can only lead to significantly higher electricity prices for paying customers. It is hard to see any other outcome. An electricity price increase of 18.65% has been approved for 2023 followed by a 12.74% increase next year. This is a cumulative increase of 34%.
But let’s think about how some customers will respond to much higher prices. Once you have already installed a solar system scaling it up starts looking more attractive. Buy even less from Eskom and the municipality. What will this mean for already decrepit municipal electricity distribution infrastructure?
All of this does not bode well for inequality and social harmony in South Africa. Private provision of electricity for those that can afford it and expensive unreliable electricity for those that can’t. On the positive side, a lot of private renewable electricity is going to be installed and greenhouse gas emissions will decline. South Africa was one of the few countries in the world to record a decline in coal consumption last year. Soon I will be able to start virtue signalling about how our family is doing its bit for the environment by cutting down on coal-generated electricity. I might even buy a pair of Birkenstocks and grow a beard but becoming a vegetarian is maybe pushing it a bit too far. I will start becoming even more self-righteous than I already am and lecturing those of you who are not also doing your bit for the environment.
The future for electricity-intensive industries is not looking bright and without reliable centrally produced electricity deindustrialisation is likely to continue.
Thank you for all the ideas and comments. I really appreciate them and please keep them coming.
Regards
Bruce
Ruminant Pink Friday 
You are way ahead of us in terms of load shedding, but it will probably come to the UK eventually. Total incompetence and lack of intellect from successive governments and of course the self serving civil service, mean that an effective plan for long term energy supply has not been in place for the past thirty years.
An additional consequence has been the terrible poverty(for us, though not on the South African scale) caused by a trebling of energy prices and inflation due to European dependence on Russian Gas and food price inflation. We need cheering up!
LikeLiked by 1 person
Hi Bruce,
Happy new year and all of the best for 2023. I enjoy your weekly blogs.
This is an interesting topic. I installed a solar system about 18 months ago and bless it daily.
I monitor it and look at the stats regularly. One thing that strikes me is the variability of production, for example, in the last 30 days the average daily production was 22.76kWh, the lowest 6.37kWh and the highest 34.21kWh. It also not up one day and down the next, it is up for a few days and down for a few. The worst week in the last month produced an average of 12kWh and the best week produced an average of 28kWh. The implication of this is that in order to meet a fairly regular consumption pattern you either need significant over capacity or substantial storage, the alternative is that you need to be able to manage demand over days. As you rightly say, once installed I continuously consider upgrading it but have avoided it so far and the question is what to upgrade first especially as you are managing two conflicting requirements – the first is to maximise solar production, for this you need to run the battery down enough that it can manage the variability between production and use. The second is you want to keep the battery as fiull as possible for when you need it.
When driving around I cannot help notice how many solar panels have already been installed and wonder what the current generating capacity of that is. One suspects that without it we would be having stage 8 or 9 at the moment.
In terms of payback/ROI there are a few thoughts. The first is that you will recover some of the investment when you sell your property either through increase value or selling quicker, a bit like renovating your kitchen. IT doesn’t depreciate to zero. If you don’t like that answer, then you should think about it as two investments. The first is a lifestyle investment (like the kitchen), i.e. the battery and inverter – maybe you could argue that you will save some fuel because without this you may need to go to the office more often or somewhere with connectivity more often. The second is the solar panels – this is the part of the system that saves electricity. You could split the design cost between the two. In my case, the solar part was 18% and the design 9% of the total cost. If you are paying back 20% through electricity savings that suddenly happens much faster.
Keep up the interesting topics.
Anthony
LikeLiked by 1 person
Thanks for your interesting and thoughtful response! I gave the installer the go-ahead today. Let’s compare notes over a beer in a few months’ time. I also think a lot more people are still going to install systems. As you say this is not just about being an investment. 10 hours a day with no electricity is no way to live.
LikeLike