Bypassing Eskom
Big, centralised electricity generators are in a “death spiral”, says the man who is out to prove that small, decentralised solar utilities can deliver power to entire communities at significantly lower cost than Eskom.
George-based Specialized Solar Solutions (SSS) chief executive Jonathan Hodgson has already gone a long way in a five-year programme in which his company has provided power for lighting, and in some cases for appliances and devices, to informal settlements, one with 950 households in Stellenbosch, the other with 507 homes in the Northern Cape !Kheis municipality.
Along the way, Hodgson has become involved in manufacturing appliances, such as TVs and fridges that operate on direct current (DC), instead of the alternate current (AC) used in the national grid.
DC appliances and devices reduce costs of installing solar systems and of energy consumption. He is also developing a longlife battery with extended storage for longer night-time electricity generation.
His thinking is out of the box. Hodgson says monolithic, centralised electricity generation and distribution utilities are in a death spiral because of falling demand for their services and increasingly higher costs. Independent renewable energy developers are generating electricity at a lower price per kWh than Eskom will be able to do from its new Medupi and Kusile coal-fired power stations.
Eskom is buying this electricity and selling it to consumers at its much higher tariff, which will rise annually by 8% and more, while renewable energy prices remain low. So why can’t communities get the benefit of the lower cost of renewable energy by buying it directly from local utilities?
The market for this is huge. About 3,2m households in SA and 1,4bn in Africa do not have electricity.
Hodgson’s concept is based on refining and extending the Solar Home System (SHS) introduced by the department of energy (DoE) to supply electricity to rural households that cannot be connected to the national grid because they are too remote. About 20 000 systems are installed annually by private contractors, with government fully subsidising the cost of about R5 000 per unit and householders paying a small monthly fee to cover maintenance.
Each SHS has a solar panel, battery and inverter, which provide a basic electricity supply for internal and external lighting.
As a government contractor, SHS has installed about 15 000 systems in the Eastern Cape and Limpopo. “Having developed a good understanding of the rural market, we turned our attention to the rest of the market,” says Hodgson.
“We drew up a five-year programme to grow our knowledge base of different areas, and gain a good understanding of their needs and how to best meet them.”
An initial project involved the installation of 507 solar systems in an informal settlement near Groblershoop in the !Kheis municipality in the Northern Cape. Installation was funded by the DoE and Saudibased ACWA Power, which is building a concentrated solar power plant in the area under government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). SHS trained local people to install and maintain the systems.
In addition to providing basic lighting, the SHS installations are able to power a small TV, a radio and a mobile phone charger.
In order to save costs on the installation of appliances and electronic devices, SHS worked with fridge manufacturer Defy and TV supplier Telefunken to develop DC products.
This saves the cost of an inverter, which