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A plan for power by those who hold the power – will it ever see the light?

In a surprise move Cyril Ramaphosa recently approved a renewable energy plan to combat South Africa’s worsening energy crisis. Although a step in the right direction, Nato Oosthuizen, Partner and Renewable Energy Expert at BDO, and Christelle Grohman, Director of Advisory at BDO, share insight into the practicalities involved in implementing sustainable changes that could suggest the light at the end of the tunnel is still quite far off.

The President’s recent announcement is a positive move for the country that has faced rolling blackouts for over 10 years and are only set to worsen in the future as infrastructure failures become critical. The red flag for many was the vagueness in the details as well as lack of definitive timelines for implementation of the plan. A further point of concern – the plan’s heavy focus on improving performance of Eskom’s existing fleet of power stations, cutting the red tape around purchasing maintenance equipment and recruiting skilled personnel. For many this is simply more lip service in an ongoing saga.

Is renewable energy the answer? Yes and no

So if the country was to successfully implement a renewable energy plan, would we be well on our way to economic recovery with our eyes firmly focused on growth and development free from the shackles of Eskom’s legacy? Unfortunately, it is just not that simple.

Yes, solar energy panels hold the limitless possibility of providing power, but renewable energy requires more complex storage and management infrastructure. This is especially prudent in various business sectors. Grid-tied systems for example, store energy in the power grid and even if the bureaucracy ultimately gets to your premises to grid tie, there is still a process that needs to apply. People and businesses making investments in solar panelling must remember that the process must still be approved, authorised and linked up by the municipality itself. How quickly will this be facilitated? If historic service delivery is anything to go by then it could take years. Even if it does happen timeously, how will the management of these grids unfold because when a system like this is set up to provide power to some of our country’s largest electricity users, systematic maintenance must follow suit.

Solar power could be a massive win for the country, but we can’t forget that it doesn’t begin and end with solar panels – and are we geared for what needs to happen beyond installation?

What about Eskom’s pay before you use plan?

As home solar installations gather pace, the utility has proposed that households pay a much larger portion of their electricity bill in the form of fixed charges related to the supply of electricity that would see customers serviced directly by the utility in areas such Sandton and Soweto paying hundreds of rands per month before using a single kilowatt-hour (kWh) of electricity. The massive breakdown in trust between the power utility and the power using public leaves this plan with many fatal flaws and should it be implemented it will be another push for users to find any means to get off the grid – meaning added pressure on installation and management of renewable options. This proposal also doesn’t address our country’s primary power users – business as a whole – who now have the approval from government to self-generate instead of being forced to sustain outdated infrastructure.

Either way we are still left with the glaring issue of the long-term infrastructure management of renewable solutions.

There are options for sustainable solutions

Although there have been promises of “no more excuses”, civil society is ready to take the power issue into their own hands. One solution that could nullify government’s need to maintain renewable infrastructure and become a game-changer in South Africa would be the creation on ‘mini-grids’. Essentially mini-grids are independent, decentralised electricity networks that can function separately from the national grid.

The idea of supplying electricity through mini-grids is not new; communities from the United States to Cambodia have long used this approach to bring local infrastructure into regional or national grids. The beauty is that mini-grids work best when feeding power into larger distribution networks. They are easier to assemble and deploy in hard-to-reach communities and deliver electricity more reliably. Decentralised solutions such as mini-grids are a cost-effective solution for delivering electricity. The challenge is to convince government, policy-makers and investors of the value in going decentralised because it can be an expensive undertaking. The good news is that funding for mini grids powered by solar, hydroelectric, wind, or a mix of renewables is slowly increasing, but getting the right investment arrangement depends on getting the right policies and regulations in place first – a bottleneck that could hold us back.

There is a private sector ready and waiting to better package and meet the needs of electricity consumers, but the opportunity must be made available for the private sector to become an active part of the solution. Currently Eskom is still holding all the cards and South African’s – both residential and business – not being invited to play so are likely to move along and begin their own game.