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POWER CRISIS

Small Free State town in high court battle with Eskom over use of solar energy to reduce load shedding

Small Free State town in high court battle with Eskom over use of solar energy to reduce load shedding
Solar panels installed at Tweeling by Rural Free State on January 20, 2023 in Frankfort, South Africa. It is reported that the private company has been managing the Mafube municipality's electricity network extremely successfully since 2011, the company has replaced substations, built solar farms and also replaced power poles. (Photo by Gallo Images/Rapport/Elizabeth Sejake)

In a case before the Johannesburg High Court on 5 April, a small community in the Free State took on Eskom for the right to use independently generated solar power to mitigate the effects of rolling blackouts in Frankfort.

Eskom is trying to stop residents in Mafube Municipality from implementing “voiding”, the process of using alternative, non-state-sponsored energy to make up for energy deficits as in the case of load shedding.

“We’re going to fight for that voiding,” CEO and engineer at Rural Maintenance Chris Bosch told Daily Maverick in the courtroom after arguments were heard. “Because remember, if you’re in a small town, if you’re a small business, you either have a petrol generator running when the power is off, and if you’re poor, you have nothing.” He added that supplying energy when the grid cannot will allow residents to have at least an hour and a half of additional electricity.

Eskom is strongly opposed to Mafube Municipality using its own separately sourced energy and is concerned that “it would encourage customers throughout the country who have additional embedded generation capacity to claim similar relief”, according to its affidavit.

Urgent application by Rural Maintenance

The applicants in the case, which include Rural Maintenance, its subsidiary and the Mafube Business Forum, are seeking to preserve the status quo – allowing them to keep providing power to Frankfort, thus alleviating load shedding – until the National Energy Regulator of South Africa (Nersa) finds a resolution or investigates their complaint.

Rural Maintenance is a private company that has managed the network distribution on behalf of the Mafube Local Municipality for the past 11 years. 

Bosch said that before the company took over management of the network the municipality was collecting R1.7-million a month, way below the R5-million Mafube needed to pay Eskom every month, on top of salaries and material costs.

“And the network was buggered,” said Bosch. “There wasn’t electricity in town for days on end.” 

He explained that since the municipality and Rural Maintenance entered a 25-year agreement, of which 14 years remain, the municipality has saved money and the distribution has improved.

Rural Maintenance’s subsidiary, Rural Maintenance Free State (RFS), began providing the town of Frankfort (in the Mafube Municipality) with power from a new solar PV plant, FF Renewables, at the end of 2021.

The solar farm now has four different plants in operation. The first was commissioned at the end of 2021 and started producing 700 kilowatts (KW) for Frankfort, and after the other three plants were commissioned at the end of 2022, the solar farm was providing the town with a total generation capacity of 4.26 megawatts (4,260 KW) by the end of that year.

Since RFS has the access to and right to use the solar plant as an embedded generation facility, it is currently providing Frankfort with electricity from the privately owned solar PV farm during daylight hours, which include load shedding periods, to alleviate Eskom’s rolling blackouts.

An embedded generation facility is an electricity generation plant that is connected to a distribution network (which carries electricity from substations to homes and business), not Eskom’s transmission network (which carries electric power from power stations to the substations).

FF Renewables is a private company whose 21 shareholders include private individuals, farmers and businesses (including Rural Maintenance) active in the Mafube community.

Read more in Daily Maverick: Godongwana makes U-turn on controversial Eskom exemption

Bosch told Daily Maverick that the solar farm was originally started to help economic growth in Frankfort, and because Rural Maintenance said it couldn’t in the short and medium term provide Frankort with further electrical capacity because its networks were constrained.

After the solar farm was ready, the power generated had no designated outlet, so the asset manager of the solar farm and Rural Maintenance set up an interim arrangement whereby the solar farm would provide power to Frankfort as an embedded generation facility.

Now Frankfort has had two sources of supply: one from the Eskom transmission grid and another from the solar farm. “We’re paying them [15%] less than what we would pay Eskom,” Bosch said.

Advocate Etienne Lasuschagne (standing), who is representing the applicants in the case (Rural Maintenance and co), presents his argument to the Johannesburg High Court (Gauteng Local Division of the High Court of South Africa) on 5 April 2022. Azhar Bham, senior counsel representing the respondents of this case (Eskom) and Advocate Catherine Kruyer, seated to the left. (Photo: Julia Evans)

Advocate Etienne Lasuschagne, who is representing the applicants in the case (Rural Maintenance and co), argued that “RFS is in a position to do something which Eskom can’t, and that is that it can keep what is called critical loads live”. He explained that critical loads include water and sanitation services within Mafube and neighbouring towns.

“As soon as you turn off electricity to reticulation services pertaining to water reservoirs and sanitation services the inevitable result is the drying up of reservoirs and spillage of sewage into the ecosystem,” said Lasuschagne.

I feel that Eskom and the government aren’t ready to let go of the vertically integrated utility model and believe that Eskom will rise again – this is very difficult to imagine.

It’s important to note that the solar farm’s points of connection with the Mafube distribution network are downstream from Frankfort’s national grid connection; they don’t have to “wheel” power through the Eskom national grid.

Lasuschagne explained in court that until the end of January this year load shedding was administered by Eskom, but then the parties entered into a three-month trial, starting on 30 January, where RFS would “self-load shed” on behalf of the municipality.

But then on 16 March, Rural Development said it had received correspondence from Eskom saying that if it didn’t stop voiding, the utility would not allow RFS to control load shedding anymore.

Eskom argument

During the trial on 5 April, Eskom opened its argument by asking the court to think on a macro level, to consider this instance as just a small part of a larger system, as opposed to viewing Mafube as a standalone case. Its fear is that considering instances like Mafube’s in a vacuum causes people to lose sight of Eskom’s management of the entire national grid.

“If the relief sought by the applicants is granted, large numbers of Eskom customers will claim an entitlement to similar relief, and Eskom’s ability to effectively manage the grid will therefore be severely compromised,” its affidavit reads. 

Bosch told Daily Maverick after the hearing: “We say the only way we’re going to fix South Africa is on a macro level: fix one municipality and get a solution that works, fix number two, get a solution that works, and before we know it, there’s 50 or 60 municipalities which are better.”

In its affidavit, Eskom continuously stressed the danger of having more than one energy provider plugged into the grid. 

Read more in Daily Maverick: Solar panel customers will finally be able to sell excess electricity into the SA grid

Circumstances like Mafube’s on a larger scale, the company argued, would cause Eskom to “be unable to discharge its statutory duty to manage the grid – introducing a real threat of a national blackout occurring, which would have catastrophic consequences for the entire country”.

This point, however, did not appear in verbal arguments before the judge.

Instead, Eskom’s lawyers focused on RFS’ technical mishaps in getting their voiding approved by Nersa, as well as their filing of documents for the case. 

Azhar Bham, senior counsel representing Eskom, accused RFS of using “small footpath solutions, all of which fall outside the carefully structured rules and regulations”.

They also argued that RFS failed to approve its alternative form of electricity supply through Nersa, which, as custodian of the Electricity Regulations Act (ERA), it should review before any changes or implementations are made.

The missing affidavit

Although there were originally four applicants in the case, the third applicant, Mafube Local Municipality, failed to provide its own signed affidavit before the court hearing closed on Wednesday afternoon. Bham expressed concern about the legality of the party’s absence and what it might mean for the outcome of the case.

Daily Maverick approached Mafube municipal manager Mothusi Lepheane, asking whether the municipality supports this application with Rural Maintenance, seeing as Mafube Local Municipality is named as an applicant in the case.

Lepheane responded: “No comment.”

But according to Bosch, Lepheane was on board with Rural Maintenance’s plan from the start, saying: “Eskom cannot do this to the people in Mafube” and that the affidavit would come.

But then the treasury official for the municipality told them, “this has got nothing to do with Mafube, this has got to do with people outside trying to make sure that this project doesn’t happen”, and when they asked for the affidavit again, it never arrived.

Rural Development speculated that the reasons for the missing affidavit could be political interference, especially because senior counsel Bham continuously brought it up with the judge on Wednesday.

After hearing arguments from the applicants and respondents on Wednesday, Judge Edwin Molahlehi reserved judgment. 

Johannesburg High Court Judge Edwin Molahlehi has reserved judgement of the case between Rural Maintenance and co versus Eskom, heard at the Johannesburg High Court of South Africa in Johannesburg on 5 April 2023. (Photo: Julia Evans)

The bigger picture

Theo Covary, who holds a PhD in energy policy from UCT, told Daily Maverick: I feel that Eskom and the government aren’t ready to let go of the vertically integrated utility model and believe that Eskom will rise again – this is very difficult to imagine.”

Read more in Daily Maverick: Introducing the four crime cartels that have brought Eskom and South Africa to their knees

Bosch reiterated this point, saying that “if [using our own solar-supplied energy] now works, everybody sees that this is the way to go. What is now the next step is to increase the PV plant and add batteries because now our batteries don’t come from Eskom. Our batteries actually come from a new generation source. And that helps the grid.”

Other municipalities, including Johannesburg, Cape Town and eThekwini, have said they are working on building small-scale embedded generation, independent power producer programmes and wheeling to help to achieve municipal energy independence and energy security built on sustainability. DM/OBP

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Comments - Please in order to comment.

  • Mark Gory Gory says:

    Good for Frankfort and other municipalities
    In the real world if you can’t supply, you can’t get paid. High Time eskom was taught about proper competition instead of hold our economy to ransom
    Load shedding has killed our business and destroyed 8 livelihoods. No sympathy at all for these crooks.

    • Nic Tsangarakis says:

      Totally agree Mark.

    • Roelf Pretorius says:

      Exactly – and it should really apply to farmers too. Why should farmers still pay for the connection to Eskom when Eskom is unable to provide electricity? Or else Eskom must pay every farm damages for the cost when Eskom does not bring its’ side! To me it seems that Eskom & the politicians behind it has become so spoilt that they forget that SA still live in the real world. I remember that this was the case in the last decade of NP rule also, regarding the roles of some of the government parastatals.

  • Hermann Funk says:

    That’s what happens when the inmates are running the asylum.

  • Chris Herselman says:

    Well done Rural Maintenance and Mafube Municipality for doing the right thing. I wish you a positive outcome in court. And shame on Eskom, who continue to fail the citizens of our country with their incompetence and outdated take on energy generation.

  • Jennifer Hughes says:

    Sounds like Eskom is simply angry they’re losing authority. Better get flexible, Eskom, because Saffas are making new plans.

  • William Stucke says:

    “Eskom’s ability to effectively manage the grid will therefore be severely compromised”

    Absolute rubbish. This case is NOT about Eskom’s Transmission grid. It’s about Distribution, which is on the downstream side of the Eskom substation. That right to embedded generation exists. RFS simply needs to dot their Is and cross their Ts to get NERSA approval.

    This point is clearly made by the fact that Eskom actually agreed to a 3-month trial and then reneged halfway through. It’s clear that the centralised Eskom model has failed. Squirrel has indeed instructed Eskom to separate its Generation, Transmission and Distribution divisions. For good reason.

    100 years ago, we had many small generators dotted around the country. Eskom bought the Victoria Falls Power Company, the biggest generator in Southern Africa in 1947 and connected it to its grid. Thereafter, they grew centralised generation, mainly in the Northeast of the country, where coal is available. The last 25 years, after the ANC nationalised Eskom (previously a non-profit entity) in 1997 have led to its inevitable decay. Cadre, anyone?

    We have moved past that, and embedded generation of up to 100 MW is legal. NERSA needs to up their game. We will, in a few years’ time, return to the situation where we have many smaller generators all over the country. Some supplying local loads like in Mafube, and others wheeling over Eskom’s grid (for a fee, of course!) to customers elsewhere in the country.

    Fighting this is like Cnut.

  • Rob Fisher says:

    Why have the big players like Cape Town let a tiny municipality take the lead when they have the money and lawyers to take on EISKOM? Well done to Frankfort for having the cajones to do the job

  • Trevor Pope says:

    I hope the judge sends Eskom away with a fleas in their ears. This is the way of the future at so many levels. We can expect many others to follow on.

  • Jane Crankshaw says:

    The short sightedness of the ANC is just astounding! They would rather see failure in any Initiatives that highlight their own failures than see the long term benefits for all South Africans! Time to privatise the SOEs, rid ourselves of racist BEE policies and become a competitive capitalist democracy with a future.

  • William Dryden says:

    I wasn’t aware that anyone needed Nersa permission to connect solar panel generated electricity to an independent substation (not an Eskom substation) and supply houses that want electricity. Yes there will be a need for battery storage for during the night. It’s like the municipalities wanting to charge you for collecting rainwater into your tanks. They don’t own the rain, wind or sun power.

  • Johan Buys says:

    It will be a technical debate and the town will lose. The way NRS48 works is a council must shed 5% of their peak demand all day long.

    So firstly it is on peak demand. You can have surplus solar daytime but if you need 20MW at 8PM then you are labelled 20MW.

    So what the town does is shed 1MW of substations all day long. A substation would experience that once a day in stage 1 and four times a day in stage 4. (there are places with 4h breaks that work differently)

    By not shedding in daytime the town is not following the regulation. Not saying it is fair, just what the rules say.

    If the town had solar plus storage and they switched the Eskom side of a substation off at 2PM and ran that substation with stored solar energy, they would be legit exactly how they would be legit if they powered that substation with diesel gensets while disconnected from Eskom.

    • Rob Fisher says:

      NRS 048-6:2009
      So then how is Cape Town able to be 1 or more stages of load shedding below the rest of the country?

      • Johan Buys says:

        Rob: that scam is totally nonsense. Their pumped storage scheme is 180MW – compared to 2GW demand profile. And they generate a sum total of exactly squat. And to make things worse the dam refill discharge wastes 40MWh each cycle.

        If a council ordinarily manages to keep half its loads satisfied with OWN GENERATION AND STORAGE that takes half the loads “off grid” it could turn stage 2 to stage 1 for the town viewed as a whole. CPT has NO GENERATION, Steenbras is consumptive exactly how a battery plus inverter is.

        • Christopher Bedford says:

          Sounds like sour grapes Johan. The fact is that Cape Town generates during the day and keeps us (mostly) one stage below whatever Eskom has the rest of the country on. You can’t call it a scam or nonsense when it’s happening. You can’t say CT has “no generation” when they really do.

          You might not _like it_ but that’s a different conversation. It might be a (wasteful) storage system but that too is another topic.

          • Johan Buys says:

            Christopher:

            Rubbish!

            Explain to all of us in age coherent sentences how pumped storage generates energy.

            Free tip : to refill Steenbras takes 220MWh and you can expect 180MWh back.

            Sit down, you have no idea what you are talking about so don’t call out people that do.

          • Rob Wilson says:

            Johan is dead right. Pumped storage is just a big battery, and somewhat less efficient than a battery is as well. However, it has a role to play in damping out the peaks and valleys. It does not have nett generation capacity.

          • Bernhard Scheffler says:

            Christopher is entirely correct. Apart from Steenbras pumped storage, Cape Town operates gas turbine generating plants at Athlone and at Roggebaai. Just check their website!

  • Richard Thompson says:

    Is it evil or insanity that makes Eskom oppose this?

  • Pierre Rossouw says:

    Whenever we see such illogical responses to successful initiatives, one has to think of a couple of things:
    Firstly, why? The answer is that there must be some benefit to someone else, other that the authority or power that be.
    Secondly, who? That is, the ANC.
    Just follow the money flow and the answers become clear.

    • Sheila Vrahimis says:

      I AGREE WITH YOU PIERRE. ONE DOES NOT NEED A PhD IN NUCLEAR POWER TO GRASP THIS! Just living in SA under ANC rule makes it obvious!

  • Yaakov Rashi says:

    Our Constitution protects our Right to Dignity and a Right to Water and Healthcare. This directly implies the right to receive resources that guarantee sanitation that support our healthcare. If Eskom cannot guarantee sanitation, water supply due to continuous loadshedding, Rural Maintenance must be constitutionally allowed to enable that Right for the residents of smaller, peripheral towns like Frankfort.

  • Katharine Ambrose says:

    While the rest of us have to adapt to the power failures every day and make a plan Eskom seems not ready to adapt at all or have feasible plans for the future. Adapt or Die Eskom. We need to find every workable solution not fight turf wars here.

  • Luan Nel says:

    As the economy keeps gasping for air, the country suffering daily, and our growth is now a crawl, all due to loadshedding, how can ESKOM possibly find a reason to object to a working solution to the problems it creates? This is the bully of our times taught a fine lesson and now it’s crying foul as bullies are never great sports and by definition only have power because they push others down. This is classic

  • Rama Chandra says:

    Awesome news if Eskom gets broken. The sheer cheek of suing to prohibit someone else providing something you refuse to provide is unbelievable. At this point you know Eskom is intentionally evil, and not merely incompetent. Anyone representing Eskom in this is against South Africa.

    • Neil Parker says:

      I think the basic problem is the ANC remains incensed at Andre de Ruyter’s all too telling remark:

      “You can’t steal from the sun!”

  • Frank Lee says:

    Eskom has FAILED to deliver on its obligations… now that other parties try to step in to alleviate the plight of people, now they want to prevent it!? How could this even be a legal discussion?

  • MD L says:

    It is all about maintenance of their monopoly, irrespective of the cost to the country.

  • Peter Atkins says:

    Good article! Having read the more than 30 comments when I got to the article, my overriding feeling was that Eskom and Nersa (and, by virtue of being in control of these state entities, our government and hence the ANC, are duty bound to find innovative solutions to problems, and not fight potential solution providers in court. Come on Mr President, provide leadership, spend the proposed coal extension project on sensible, permanent solutions such as renewable energy plus storage.

  • jcdville stormers says:

    Priorities, citizens can’t be independent,we must be controlled by the thiefdom ANC

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