X marks the future of energy in South Africa

Image: Matthew Henry/Unsplash

Chris Adendorff and Des Collier are working on the 2nd edition of their book, to be published in June, on possible futures for South Africa towards 2055 based on the outcome of the upcoming election, with particular reference to the Fourth Industrial Revolution. This is the first in a series of articles written by them that will be published in the Daily Dispatch in the run-up to the May 8 general election.

As South Africans approach the 2019 election, the country is once again at a crossroads. Making an informed choice when voting during these elections will help shape a better future.

As a concept, Futures Studies can be used to forecast possible plausible, and probable, future scenarios, taking into account the likelihood of “wildcards”, based on research into emerging trends and the drivers causing those trends.

Some of these drivers are embedded in the consequences of past choices and others are the result of innovations.

The purpose is always to work towards improvement and create hope.

The Fourth Industrial Revolution (4IR) is already upon us – driven by the use of cyber-physical systems in which the barriers between people and machines dissolve.

Any decision about the future needs to keep this in mind as the impact of the 4IR will be vast.

Both individuals and elected governments need to consider the availability of energy and a number of other aspects such as infrastructure (science, technology and smart cities), education, and the implications of the Budget Speech and the State of the Nation Address when making their choices. When coupled with the implications and future possibilities of the fourth industrial revolution, “elected governments need to be aware of the future for which their constituencies are voting and enable appropriate executive decisions to be implemented”.

What are the possibilities?

By 2030 we will see wireless power light up invisible lightbulbs in the middle of a room. By 2030, over 30% of all cities on the planet will operate their electric utilities as micro-grids.

Related megatrends in technological drivers that will impact on future outlook include:

  • Energy efficiency;
  • Demand-side management;
  • Smart grids and cities;
  • Convergence of IT and distribution; and
  • Falling solar energy prices.

However, in SA’s current situation, Eskom has struggled to meet demand largely because of maintenance issues and design flaws at its new coal power stations and it had to resort to stage 4 load-shedding again a few weeks ago, which heightened worries over SA’s already ailing economy.

The solutions to establishing a stable power supply are interconnected and becoming increasingly complex such that no institution can achieve them in isolation.

Is government willing to work with other sectors and vice-versa? SA is diverse – geographically, climatically and demographically.

Are South Africans willing to adopt more of a self-help culture in order to implement decentralised solutions executed at local/district level?

Based on planning and review undertaken by Adendorff, Amathole District Municipality management and political leadership, to compile Vision 2058 towards a Smart District, an economic growth and development plan for ADM, a number of game-changing actions are possible. Those relating to energy include:

Modernising the electric grid towards 2030

Despite significant innovations in energy science and technology over the last few decades, SA’s grid has not kept pace. Built to convey power in one direction from large, centralised plants burning fossil fuels, the grid is not properly equipped to integrate new and intermittent, renewable supply resources.

The grid is also not prepared for smart homes, buildings, and devices, or to meet the demand for additional electrification of all sectors of the economy. The vast majority of ratepayers know little about their energy and thus have few reasons to change their behaviour and become more efficient.

Responsibility for modernising the grid is divided among private utilities and regulators located within a complex network of regional transmission organisations and independent system operators, each with their own guidelines and territorial responsibilities.

Energy suppliers and local governments, with their authority over land use, also have a stake in how the grid is transformed. Without significant changes to regulatory structures and policies, and without substantial new investment, South Africa will remain bound to a grid that pollutes and warms the planet, misses opportunities to innovate, and fails to meet growing demand.

Plan for more electrified, renewable energy districts

With the expected increase in population over the next 11 years, more electricity will be needed. Furthermore, as buildings and vehicles move toward greater electrification, that demand will grow even more. Unfortunately, too little transportation and land-use planning takes energy consumption into consideration. And if we continue down our current path, greater demand will be met through the burning of fossil fuels rather than by renewable energy.

Form District Energy Task Forces with all stakeholders

District Task Forces, bringing together regulators, public officials, utility executives, generators, and other stakeholders could plan more effectively for the future of energy production. These teams should foster the development of a comprehensive district assessment of future electricity demand and should be guided by the competitive market principles that govern the wholesale markets in each of the local municipalities to produce the lowest-cost outcomes and shield electricity consumers from the cost of bad investments and poor performance.

These teams should consider new technologies such as offshore wind, energy storage, alternative-fuel vehicles, and the potential implementation of coordinated networks to support these new technologies in response to market needs and adapt the grid for the greater variability of cleaner, renewable energy.

However, the growth of these renewable sources of energy will require modifications to the electrical grid. Compared to nuclear or natural-gas-fuelled power plants, the output of renewable energy generators is highly variable, with intermittent peaks and valleys of supply over the course of days and seasons.

Providers and regulators will need to take the following actions:

  • Use pricing and technology to smooth out peaks in energy demand. Energy regulators in districts should require all customers to be transitioned to time-of-use rate plans. As the grid becomes “smart,” users will know in real time how much power they are consuming and what the overall demand on the grid is. Smart home systems could adjust accordingly, taking actions to delay usage or turning off non-essential appliances – some of these systems are already available.
  • Enhance energy storage. The timing and “shape” of electricity use throughout the day will continue to change as a result of more efficient and smarter end-user devices, consumer behavioural changes, and the increased electrification of transportation and space-heating applications. Storing the power created for later use is critical to the widespread adoption of renewable energy, and national government and local municipalities need to further invest in R&D of new and cost-effective storage technologies.
  • Create a resilient grid with clean, stable energy sources and supply that can come online quickly to fill gaps. Renewables should make up at least 50% of the district’s electricity generation over the coming decades. Although the need for fast-ramping “peaker plants” will remain for the foreseeable future, their use should decline over time.
  • Make the grid flexible and efficient with distributed generation. Improved technology and economies of scale in terms of power production has paved the way for a more intelligent “two-way” grid. Distributed generation allows consumers to generate power onsite for direct consumption, and for small-scale grid-connected generation sources to support grid operations more cost-effectively than traditional “wired” solutions.

Paying for it

Many of the suggested improvements will require considerable public and private investment into new technologies and added infrastructure. Some of these costs could be covered by the proceeds generated from an expanded greenhouse gas market. Other measures will require private investments, which should rely primarily on wholesale competitive markets and potential distribution markets. District municipalities should maximise public funds by working with private sector investors to create low-cost, sustainable financing for clean-energy investments. Infrastructure to facilitate expanded customer and investor engagement in the distributed grid might be supported best by investment from utilities backed by ratepayers, who will ultimately pay more stable, and even lower rates, as a result of expanded choices and greater system efficiencies towards 2030.

Chris Adendorff (PhD, DBA, PhD) is an adjunct professor at Nelson Mandela University Business School in Futures Studies and Commerce and serves on the Presidential Commission on the Fourth Industrial Revolution. Des Collier is a freelance writer with experience in education and performance management consulting.