A definition of energy as `the ability to cause change’ is particularly relevant for the Hessequa Energy Summit held in Stilbaai on 23 & 24 July 2015. The summit concluded with a vote of 64 to 36 in favour of the Hessequa Local Authority generating and or purchasing renewable energy from private producers. This clear message for change was tempered by the concerns underlying the dissenting votes, namely how to provide a reliable, affordable and environmentally sustainable energy supply. Over seventy delegates with a wide range of expertise participated in identifying the challenges and finding potential solutions. Solutions included the need for new financing models for service provision, changes to the legal mandates to allow electricity generation by LAs, the need for public and private partnerships and finding an optimal energy mix for Hessequa.
Officials from provincial government and other LAs including Saldanha Bay and Cape Town attended, reflecting widespread concerns about the future supply and costs of electricity. LAs are faced with dramatically increasing ESKOM prices and supply unreliability on one hand and a steady reduction in the sale of electricity as customers become energy efficient and or switch to generating at least some of their own electricity. At the same time, the cost of electricity from renewable energy technologies is reducing – in fact is lower than the predicted cost of ESKOM’s new coal plants Medupi and Kusile. It is time for ESKOM and the authorities to renegotiate and to change the electricity generation and distribution model. (ESKOM with a nuclear plug in will be too late, far too expensive and misses the opportunities and broad economic benefits of growing sustainable local renewable energy sectors. Comment of the author not the Summit)
The Hessequa Local Authority (LA) manages a large rural area with scattered villages and the towns of Witsand, Riversdale, Stilbaai and Albertinia. The LA commissioned the Stellenbosch University’s School of Public Leadership (SPL) and the Centre for Renewable & Sustainable Energy Studies (The Centre) to assist to develop a plan for an affordable, reliable and sustainable energy supply going into the future. According to the invitation, the summit facilitated by Prof Erwin Schwella of the School of Public Leadership aimed to “design the strategic roadmap to establish the Hessequa Energy Utility Agency.” It also aimed at sharing this process with a wider audience as part of growing understanding about the energy challenges facing LAs and to formulate a range of solutions from a broader experience base.
Mayor Nel reminded the delegates that solutions needed to be inclusive. Legal specialist Dr Dirk Brand challenged delegates to consider what he called the co-production of public services to grow both the services and the community a co – production that looked at co- design, co-financing and co-delivery. There was general agreement that adding clean and affordable renewable energy into Hessequa’s electricity equation would solve more than the energy crisis. Renewables have the potential to stimulate a vibrant green technology industry with new jobs and improved energy and economic resilience.
Prof Wicus van Niekerk of The Centre gave an overview of the renewable energy options appropriate for Hessequa giving a green light to local PV and wind. He warned that cost effective solutions for energy storage is still an issue. Further studies to examine the potential of a small hydro-electricity plant on the local dam and biogas from the waste water treatment plants would reveal if these are cost effective options for limited energy storage. Siting overseas examples of communities with high percentages of renewable energy, he reminded the summit of the 80 /20 rule. Typically, achieving 80% of affordable reliable renewable energy was doable – the cost of meeting the remaining 20% of demand given current technology is very costly. Hessequa would be wise to stay connected to the national grid but complement this supply with local generation.
While much discussion focussed on the technical opportunities and obstacles as well as economic and revenue issues, institutional challenges were identified as the biggest stumbling block. Complex governance rules and responsibilities and vested interests mean that many of the key challenges are political. Renewable energy technology is accessible and affordable but the role out at national level is too slow. In addition, the government’s focus on large scale REIPPP does not necessarily match the local electricity demand of specific LAs. To generate their own RE electricity or to negotiate their own IPP partnerships, LAs will need to ignore or tackle the legislation which currently gives ESKOM the exclusive right to supply electricity.
Hessequa has taken on the challenge of actively developing an energy road map that serves the needs of all of its residents. Like many LA’s Hessequa shares the role of local distributor with ESKOM which still serves specific areas within Hessequa. There are many interested eyes and ears following the independent energy explorations of Hessequa and other LAs and no doubt hoping for partnership models that will facilitate energy security and sustainability at the end of the distribution line.
A report of the findings is being prepared by the School of Public Leadership and will be available on their website. A summary of some of the key challenges and potential solutions follows.
National governance and legislation is a barrier. Local authorities need a forum to address this. The South African Local Government Association should be a good place to start.
Load shedding has a negative impact on economic development. This issue should be taken up with NERSA as an appeal for support for LAs to fast track independent RE.
The current independent power producer process does not adequately involve local government and business. Opening the process to ensure an optimal match between local RE and LA energy demands as well as partnerships with local business is required. This is especially relevant at the smaller scale of RE such as roof top PV.
What is the expected future demand and to what extent can it be served by local resources. What is the state and capacity of electrical infrastructure and what is needed to support local generation? A study is required to assess this.
The loss of revenue from electricity sales used to cross subsidize `indigent’ households and non-revenue generating services is a concern to all LAs. A new financial model is required possibly also including more support from government. Growing a green economy with decentralized scale-able RE would increase employment opportunities and decrease the number of indigent households.
Hessequa LA lacks the full range of capacity and expertise needed to embark on a RE journey.
Technical challenges include the present design of the local grid. Hessequa has a linear system with ESKOM supply connecting at the two end points. A circular distribution system would be more resilient.
Understanding local demand patterns and reducing consumption as well as shifting consumption to reduce peaks were identified as essential to building local energy resilience. This will need new ways of managing electricity consumption patterns across all sectors. It will be equally important to identify the optimal uses of local energy sources and ways of incentivising citizens to use energy optimally. E.G. It is not efficient to heat water with energy from a coal power plant thousands of kilometres away when the sun can heat it on site. Initiate a study to investigate consumer behaviour including opportunities to shift consumption patterns so as to match supply with demand.
Public awareness about energy and how to use energy efficiently is low. This is a barrier for active involvement by consumers. An Energy Advice Forum, a physical centre with examples of energy efficient technologies as well as an online platform could address this.
“Social systems are not governed by laws of nature. Hence they need a deliberate formulation of the outcomes they want to achieve.” Hessequa Energy Summit report. To read more view and download the reports and expert inputs by following this dropbox link https://www.dropbox.com/sh/tct03jyq0mgft6u/AADHLRFpnIzqKtpih2Tcl19Da?dl=0
Kim Kruyshaar 31 July 2015
Read more about the issues, responsibilities and opportunities facing municipalities who are considering own generation or purchasing from IPPs. at https://greenaudits.co.za/electricity-a-pro-active-role-for-municipalities/