South Africa's power blackouts: solutions lie in solar farms and battery storage at scale, and an end to state monopoly
It has raised input costs for producers and retailers, and has triggered a new round of inflation and interest rate increases.
- It has raised input costs for producers and retailers, and has triggered a new round of inflation and interest rate increases.
- Any solution will obviously incur cost because it will require the adoption of new technologies, such as large-scale grid-connected solar farms that are linked to battery energy storage.
- A solar farm consisting of 50 MW of photovoltaic panels with 240 MWh of storage capacity will cost R2.6 billion.
- I argue that South Africa can solve much of its energy crisis by building new facilities consisting of battery storage with photovoltaic panels.
Reforms to the energy market
- A market operator is an energy “stock exchange”.
- It facilitates contracts between the energy producers, the transmission system and the distributors.
- The UK, Canada, the US and many countries in the European Union have undertaken market reforms like this, with positive outcomes.
Blackouts have changed supply and demand
- On the supply side, customers are increasingly using alternative energy sources.
- Consumers who require stable energy supply have made alternative plans, in most cases shifting to the use of diesel generators.
- On the demand side, the blackouts have led to shifts in the use of grid electricity at a different time of the day/night cycle.
The costs of small-scale solutions
- At current interest rates, and assuming an average energy consumption of 15kWh per day and an Eskom rate of R2.75 per kWh, the net cost will be R6.10 per kWh.
- Back-up power from an 8kVA diesel generator, using the same set of assumptions, will cost about R5.20 per kWh, including diesel and capital charges.
- The installation of 1.4GW of battery capacity nationally confirms that there is already a market for the purchase of energy at higher cost.
The costs of large-scale solar with batteries
- Customers could pay different rates depending on the time of day when they used electricity.
- It concluded that the grid would need an installed photovoltaic capacity of 18GW, coupled with a storage system rated at 3.7GW/10.4 GWh.
- The facility would pay for itself if a time-of-use tariff of R3.50 per kWh, almost double the present tariff excluding network charges, could be levied.
A three-step plan
- The analysis suggests that it would be possible to solve the peak power problem in three steps.
- Firstly, unbundle Eskom and establish the market operator, secondly use the bail-out funds to build connection capacity, and thirdly, use the market operator to build large-scale photovoltaic/battery capacity.