Municipalities, Orania moves to get off Eskom’s Grid

Cape Town - With  Eskom on its knees and South Africans spending hours in the dark, at least two municipalities are investigating ways to get off Eskom’s grid once and for all.

Also, the Afrikaners-only town, Orania, has taken the first step towards ending dependence on Eskom for electricity after commissioning the first phase of its solar energy project.

Phase 1 of the self-funded project means the town supplies 30% of its energy to its citizens.

As Eskom CEO André de Ruyter warned this week that if South Africa does not aggressively invest in renewable energy and relax air quality standards, Eskom’s models show it might need to implement stage 15 load shedding, Nelson Mandela Bay announced its plans to partner with Independent Power Producers and reduce dependency on Eskom.

The City of Cape Town has also said it wants to produce its own electricity. Last week, the City said its first solar plant in Atlantis is to be built next year.

Mayor Geordin Hill-Lewis said this is one of a range of interventions to end load shedding over time. “The power plant would start generating electricity in 2024 and be in operation for 20 years, with a foreseen annual output of 14,7GWh,” Hill-Lewis said.

Orania spokesperson Joost Strydom said the town’s solar energy plans had been coming for years now.

Strydom said the plan was to be completely self-sufficient and eventually sell surplus electricity to Eskom.

He explained that phase 1 of the project cost the citizens of Orania and its investors around R18 million but warned the third phase of the project would cost much more as it required batteries.

"The plan was accelerated by Eskom’s inability to deliver the electricity it should deliver, and this made us ramp up the process, but the basic idea is that we cannot give basic services to our residents with taxpayers' money like other communities. We need to commercialise everything.

"Our priority now is to look after our people, deliver services at a high level, but because of our massive economic growth, something like energy is just non-negotiable. We need to have electricity and energy to sustain our economy and growth, "Strydom said.

Phase two includes registration with the National Energy Regulator of South Africa (Nersa), while phase three would deal with storage capacity.

Strydom said ramping up the project was urgent as more people continue to apply for residence in Orania.

He said the town’s population was growing at an alarming rate, with their most recent census revealing that population growth was between 15.5% and 16.5% in the last two years.

The ANC in Gauteng has been calling for Orania to fall, with the town’s existence reported to have been a major talking point at the ANC’s policy conference in July.

ANC Gauteng chairperson Panyazi Lesufi argued that Orania went against inclusivity and democracy.

Nelson Mandela Bay's David Mertens, who is the Executive Director at Halberg Guss South Africa, operating in renewable energy, said any plans to reduce dependency on Eskom would require at least R3bn.

"As an industry, we are looking at rates higher than Nelson Mandela Bay buying electricity. We have come together in the renewable energy cluster to make a plan so we can get suppliers to us," Mertens said.

He said the plans were in an advanced stage with quotes from Independent Power Producers (IPPs) sought.

But energy expert Ted Blom warned that most estimates and budgets were “totally flawed and inaccurate”.

“After the fact, the clients realise that renewable energy alone was a very poor choice, and then have to procure power for the other 20 hours in a day at great cost.

Blom said this was the case with an Independent Power Producers programme in the department of minerals and energy.

“Eskom now pays +25 % of costs for IPP contributions of only 7%. From (this), it is very clear that IPP is not cheap nor a holistic solution,” he said, adding that a discussion in Cape Town revealed the same error.

“Nobody factored in the cost of storage as well as the extra cost of charging the storage every day. I suspect most municipalities will fall in the same trap.

“Being ‘off grid’ but with continued connectivity to Eskom is the worst and most expensive option, yet most municipalities want to follow that configuration,” Blom said.

Cape Chamber of Commerce and Industry deputy president Derryn Brigg said the Chamber supported the deregulation of the energy market to create healthy competition.

“This would, in turn, reduce reliance on a dysfunctional Eskom that is largely hostage to the state."

“Opening up the energy market would allow communities or companies to explore ways of sourcing alternative power, and this would drive innovation in the energy space," Brigg said.

He said the current trajectory did not bode well for those wishing to see a speedy transition to a clean energy future.

“A competitive energy market will also reduce the cost of electricity, which would bring relief to struggling consumers," Brigg said.

He added that if Eskom was unable to survive in a competitive market, “then perhaps it has indeed passed its sell-by date".

“The process of procuring the best energy options must be fair, quality-driven, and in accordance with global best practices."

“Ultimately, lower prices will benefit all South Africans; deregulation does not only serve those with the resources to ‘go it alone’ and exit the grid," Brigg said.

Eskom spokesperson Sikonathi Matshantsha welcomed the plans. Matshantsha said: “Eskom has for many years been calling for investments in new electricity generation capacity in order to reduce the current and growing shortages of electricity. Plans by municipalities to invest in generation capacity will go a long way to relieve the costly stress on the power system and help grow the economy.