Picture: Dean Hutton
Picture: Dean Hutton

Heat is on Eskom

By Craig Dodds Time of article published Oct 7, 2015

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Johannesburg - The risk of electricity users coughing up for solar power and battery systems in greater numbers “would be the end of the power company as we know it”, and could seriously undermine Eskom’s business model.

This is according to Barry MacColl, one of Eskom’s most senior managers.

Energy analysts and economists have warned that as the costs of renewable energy and more efficient battery systems continue to fall, more and more middle-class and wealthy South Africans will realise that a once-off investment in independence from the grid makes financial sense in the face of sharply increasing Eskom tariffs and the inconvenience of load shedding.

And because higher-usage households and commercial users pay higher tariffs per unit, effectively cross-subsidising poorer households, some of which receive subsidised free-basic electricity as well as paying lower tariffs, their defection from the grid would blow a significant hole in Eskom’s budget.

Many municipalities also rely on revenue from electricity distribution for much of their income.

“It’s a worry for us, to be totally honest with you, we do have these discussions about what if everyone said, well, that’s it, we’re off the grid,” said MacColl, Eskom general manager for research, testing and development, yesterday.

He was speaking during a panel discussion on energy storage, including batteries, at the SA International Renewable Energy Conference in Cape Town.

“Hey, it would be the end of the power company as we know it,” MacColl added.

This comes as the conference on renewable energy in Cape Town yesterday agreed to increase the use of renewables in Africa.

Energy Minister Tina Joemat-Pettersson told delegates that the future of South Africa, the continent and the globe was in renewable energy. She said tough decisions had been taken at the conference, which needed to be followed through.

But Joemat-Pettersson warned that said this could not be achieved without good governance and infrastructure development.

Dr Tobias Bischoff-Niemz, chief engineer for energy research and development at the CSIR, said South Africa was uniquely at risk of grid defection compared to other countries. This was because there was almost no seasonal variation in solar radiation, especially in the north of the country, where skies were clear in winter, making reliance on solar photovoltaic power with batteries a more feasible prospect.

Load shedding was another unique driver of grid defection in this country. “It’s not the people leaving the utility, it’s the utility leaving the people,” quipped Cedric Philibert, energy and climate change analyst at the International Energy Agency.

MacColl said Eskom was not opposed to making the transition to a new energy model, but it had to manage it bearing in mind its fleet of coal-fired power stations – an asset it couldn’t simply ditch. “I’ve got a presentation somewhere on my hard drive called ‘The end of transmission’,” MacColl said.

* Additional reporting by Siyabonga Mkhwanazi


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