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The viability of taking a small town like Prince Albert off the electricity grid

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By Tim Cohen
03 May 2022 7

Tim Cohen is editor of Business Maverick. He is a business and political journalist and commentator of more years than he likes to admit. His freelance work has included contributions to the Wall Street Journal and the Financial Times, but he spent most of his life working for Business Day. After a mid-life crisis that didn't include the traditional fast car, Cohen now lives in the middle of nowhere in the Karoo.

A long time ago, as some readers of Daily Maverick might recall, I wrote about the process of going off the grid. I live in the Karoo, where there is lots of sunlight. To go off the grid was a fabulously good idea, so much so that I wish I had thought of it myself, but I did not. It was a kind of accident of history.

So, for the past 12 years, when my colleagues complain about load shedding, I remain very quiet. One doesn’t want to rub someone’s poor choice in their face. We have our own private load shedding when it is overcast for three days running, but if that happens once a year, it’s a lot. Despite spending packets on batteries and solar panels, I calculate I’ve saved about R500,000 in total over the past decade and a bit.

Having felt how this actually works, and how successful it’s all been, your brain kinda goes wild. My first thought was whether it would be financially viable to take my nearest town, Prince Albert, off the grid. How much would it cost? How long would it take? Would it be worth it? This could be a fantastic new role for local governments. 

As it happens, there was a point when the public enterprises minister wanted to promote small-scale solar projects, so it seemed the planets were aligning.

Despite the help of some wonderful lawyers who went through the small mountain of documentation pro bono, we eventually gave up – even though the finances of the process are ridiculously good.

So, here are some numbers and calculations on what it would take to get a small town in a sunny area off the grid. Just one warning: these numbers can change dramatically, and they really are back-of-the-cigarette-box numbers, but they do illustrate the point.

Prince Albert pays Eskom about R16-million a year for wholesale electricity, which it then distributes to its 15,000-odd residents. It’s a roughly breakeven service. Every “indigent” user gets 50kWh free a month, and the municipality just gives that to every single household in the township.

How much is that? Not enough, but not too bad. My wife and I use about 125kWh per month each, and we have fridges, freezers, computers and water pumps all going. This is where the maths gets a bit tricky. Eskom’s average cost to its wholesale buyer is about 1.33c/kWh, so it’s supplying each household about 250kWh of electricity per month.

So, how much would it cost to replace this expenditure with solar?

To replicate that, Prince Albert would need about 60,000 panels. Throw in installation and electronics, and total expenditure would be about R80-million. Assuming that this saves the city about a third of its electricity bill, and it saves about a third of its cost to Eskom, it would take about 14 years to pay off the installation.

That is assuming the electricity price does not increase over the next 14 years, and trust me, it will. My guess is that it would take Prince Albert about eight years, conservatively, to pay for the installation.

What if you included in that number the cost of a storage dimension, so the town would be completely off the grid? Sadly, this just doesn’t work. The town would need about 13,000 battery packs and that would cost roughly R900-million. It would take more than 50 years to pay off.

Still, this is all worth watching. There was a time when solar panels cost R6,000 each; they now cost R1,600 like for like. But the expense of storage demonstrates why the mines are not building a storage systems, and they will use Eskom most of the time.

But there is bad news here too. Despite the existence of legislation designed to help municipalities get involved, the actual process is just gob-smacking difficult. You need an accredited adviser, an official auditor, sign-offs from a gazillion organisations and a BEE partner. Almost everything you buy has to be made locally, and the legal papers are book-length.

Yet, as we can see, in principle the project is totally viable. Go figure. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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All Comments 7

  • Because of the storage problem, it’s not really viable to go 100% off-grid. You need to employ a combo of power sources, like gas, which could power fridges, stoves & water-heating. The gas, at some cost, could also be taken “off-grid” by properly utilising our personal human waste (shit) and turning it into methane, also replacing the municipal income stream lost through selling-on Eskom power. The biggest stumbling block though would be the State, which has been turned into a kinda socialist-capitalist hybrid by the ANC. It simply cannot get itself to lose the kind of control the various SOE’s provides it with, never mind the cash-cow milk it would lose if towns go off-grid.

    • Carsten : a small town should be a nice microgrid project. The town could put down HUGE solar – way more annual GWh than they consume because solar is dirt cheap. I would bet that their night time usage becomes negligible after 9pm and until 6am, so satisfying that from batteries is possible. A genset and batteries and inverters could bridge the peak period. But likely, they can drop from being say a 20MW peak demand Town to a 4MW peak demand Town which would change their Eskom bill radically. Surplus solar Eskom will buy back…. Run the genset on hydrogen generated from solar or run a fuel cel to directly generate electrical energy. Hydrogen can store over seasons and should work out more effective than trying to store battery energy.

  • Medium to large-scale energy storage is evolving rapidly using gravity (motors lift weights during the day, and generate power as the weights go down at night) and other means, and as you point out the cost of solar panels is coming down. However Eskom is between a rock and a hard place – if municipalities are allowed to generate or buy their power elsewhere, Eskom’s financial situation will soon become far worse than it is already, triggering a vicious circle of government subsidies, increasing taxation and declining demand. I suspect government simply hasn’t the balls to ban private energy supply outright so they are hiding behind regulation and obfuscation.

  • Yes, using solar for MOST of your electricity is a lot easier than going off-grid. The anti-renewables crowd loves to say how impossible off-grid is, and therefore says renewables are inefficient. The reality, as you say, is that we live in a sunny country. My suburban set-up (nine panels, inverter + 5 kva battery) cost R127,000; we used to spend about R4,000 per month, we now spend about R1,200. We also have pumps to pump rainwater into our solar geyser, which gravitates down to the bath, and then irrigates the garden using the same pump from the bath; solar geyser and rainwater tanks and pumps cost us R37,000 when we bought them five years ago! We use one third of the water and one third of the electricity we used to use. This is how renewables are useful and efficient – right now, we have load shedding, and we did not even know it until I walked into the garage and saw the power light was off – we had to use our gas hob to cook lunch as the oven does not work off the battery, but we heated something else with the microwave! But as you remark, it is fiendishly difficult to get any sizeable projects through the red tape! Why is Gwede Matashe so wedded to coal and nukes? I would hate to make any insinuations, but perhaps you should go read the Zondo report, and, as Pravin Gordhan said, “Join the dots”!

  • Would i be correct un assuming that the complicated administration has been designed to protect ESKOM and government against the initiative?

  • Not so sure about the math but can point you to some Solar PV suppliers who will sell you PV power at R1.10 / kWh or less for that size installation. Current PPA contracts are typically roof top so more expensive to install and maintain. Payback is immediate, the issue is the legal framework and “Eish”kom not wanting to see paying customers reducing their demand.

  • Prince Albert lies at the very foot of the Swartberg, towering surely 1000 m above it.
    Dams top and bottom, storing and releasing elevation energy for a mini Eskom-Ingula peak-lopping scheme, should be a better local solution than R1bn of battery packs, or stand-by diesels. Surely cheaper (and more reliable) than the R70 000 per resident that you state storage batteries would cost.
    The maths of your costing is interesting, to say the least. R16m cost per year, marked up at least 50% for retail distribution, with 80% (typically) of the 15 000 population freeloading, and 15% of consumption being municipal, does it mean that the paying minority are soaked about R9 000 / mth each on average? Strong case there for the paying farmers and residents building private storage dams per the L’Ormarins hydro-electric scheme. How did Rupert J. overcome DoE-Mantashe red-tape-reinforced resistance?

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