Whether it is for reasons of carbon footprint, a just energy transition, cost-effectiveness or reducing the impact of loadshedding, it is widely agreed that for SA and the planet, renewable energy needs to be a much greater part of the energy mix.
However, a continued lack of energy and electricity policy certainty, and ongoing mixed messages from the various levels of government, are hindering the rollout of renewable energy at the kind of scale needed to make a meaningful impact on load-shedding.
In addition, an outdated regulatory framework, coupled with inadequate planning and the lack of coherent policy emanating from the many government departments and agencies that have a stake in electricity and energy matters, also restricts investment in renewable energy as a business opportunity.
Yet it is clear, in the views of multiple energy and business analysts, that reliance on Eskom will diminish and that the opportunities are there to create a much more conducive environment for a diversified energy sector incorporating a much more substantial proportion of renewable energy.
A case in point, which we are watching closely in the Johannesburg high court, is the small town of Frankfort in the Free State, where Eskom is opposing the local municipality’s use of independently generated solar energy to offset loadshedding.
The independent facility is able to maintain critical loads such as water and sanitation, while the municipality has saved money and distribution has improved, according to a report on the case in Daily Maverick.
Eskom appears to have flipflopped on an agreement for a trial period in which the independent producer would “self load shed” on behalf of the Mafube municipality, while there is also argument around approval and compliance with Nersa regulations.
The matter is complex, but it does appear that a central problem is policy uncertainty and cumbersome regulations getting in the way of a practical, positive solution.
The reason the business chamber, and several municipalities, are watching these developments is because many municipalities are looking at means to reduce their reliance on the national grid — such as encouraging investment by independent power producers and encouraging small-scale embedded generation with incentivised feed-in tariffs.
The chamber’s renewable energy cluster, the members of which account for 20% of the metro’s electricity consumption, is in the advanced stages of planning and will result in power procured through wind and solar energy.
Through this cluster an additional 100MW of power will potentially come on stream in 2025, but there is a crucial question — where does this electricity go?
At this stage, generated renewable energy is fed into the national grid, and not necessarily into the area in which it is generated to reduce load-shedding there.
Our view is that renewable energy should be ringfenced to benefit the geographic area where the costs of investing in such solutions have been incurred.
In the case of our renewable energy cluster, the proposal is that the members would form a shared customer base for the investor, thereby reducing risk.
The intention is that the energy generated would not only benefit the manufacturers in the cluster, but the broader metro too because the additional energy wheeled into the local grid would reduce the stages of load-shedding.
Reduction in load-shedding at the point of generation provides a strong incentive for investment in renewable energy.
At the same time, the Nelson Mandela Bay Municipality is actively pursuing a number of solutions to mitigate loadshedding.
The mitigation strategy greenlighted by the council includes, on the one hand, reducing the pressure on the grid by various load curtailment measures.
On the other hand, the strategy involves bringing in additional generation capacity
— promoting renewable energy investments, and procuring energy from independent producers.
These initiatives are highly commendable, and the chamber is ready to work with the metro to support and fast-track these.
However, a crucial point again, is that the benefits of these initiatives in curtailing load and reducing reliance on the national grid, must come back to this area where they originate.
Collaboration is critical to secure the benefits for the Bay, and enable us to become more self-sustaining and self-reliant.
This is not only about reducing load-shedding and reducing carbon footprints, but is a vital element in securing our local economy, protecting investment and saving jobs.