JON KORNIK: Cape Town’s plans lay basis for clean energy system; Joburg’s don’t

Tackling load-shedding presents us with a unique opportunity to leapfrog to a modern, decarbonised grid — but only if all key ingredients are put in place. Cape Town and Johannesburg, with their recently announced plans to eliminate multiple stages of load-shedding, provide interesting and contrasting test cases. 

How do we eliminate the inconvenience of load-shedding? Understandably, this is the question most South Africans are asking. The problem is that a lot of our current solutions come at the cost of the long term impact on our energy system and the economy. It doesn’t need to be that way, but it requires a change in perspective.

A tale of two cities

Cape Town and Johannesburg have announced plans to eliminate multiple stages of load-shedding, each underpinned by slightly different strategies. While both cities should be commended for tackling the energy crisis for their citizens, will they leave us better off as a society and position SA’s economy for the future? The answer remains unclear.

The headlines look similar: Joburg hopes to slash three stages of load-shedding, while Cape Town aims to eliminate four stages. Scratch a bit below the surface and it’s clear these strategies are starkly different.

Joburg plans to recommission 74MW of old diesel-powered gas turbines, invest in a 80MW ripple relay system (to turn off geysers and pool pumps when needed), and widely deploy smart meters to limit how much power residential customers can use.

Cape Town, on the other hand, has issued a tender for 200MW of renewable energy plants, while activating a “Power Heroes” campaign for residents to be rewarded for voluntarily reducing demand by 60MW when needed. The city is also breaking down regulatory barriers to residential solar, and plans to procure 500MW from large renewable energy plus batteries, and gas to power projects.

Do the strategies matter if the result is eliminating load-shedding in both cases? Absolutely.

The importance of tackling peaks

Any viable strategy to eliminate load-shedding needs to address two challenges. The first is to get more supply onto the grid. Whether additional electrons come from Joburg’s diesel or Cape Town’s renewables and gas, the impact on the total energy balance will be similar. Secondly, supply needs to be matched with electricity demand throughout the day. This is most challenging during peak periods in the mornings and evenings, when demand on our electricity grids is at its greatest.

These periods are also when electricity is most expensive. Eskom sells power to Cape Town and Joburg, which then resell it to their residents. This is a big part of municipal revenue — 32% for Cape Town and 25% for Joburg. But Eskom charges both cities four times more for peak electricity in winter than they do for daytime electricity in summer. The result is that your municipality sells you power at a 150%-plus profit during summer days, but a 40%-plus loss during winter mornings and evenings.

The proliferation of solar spurred by the energy crisis means Cape Town and Joburg are increasingly selling less profitable daytime electricity, and relying more on loss-making peak times sales. What does this mean for municipal revenue? In short, it threatens the ability to supply free basic electricity to indigent households as well as other basic services provided by the city, subsidised by electricity revenue.

Contrasting peak strategies

Joburg’s approach to peak periods is to burn diesel, enforce limits on how much power homes can use, and unilaterally turn off geysers and pool pumps with ripple relays. While these methods may have the desired short-term impact, they may not be viable long-term strategies.

Take ripple relays. This is technology from the 1970s that allows a utility to remotely turn your appliances on and off. This was widely deployed by Eskom last century to help manage peak demand, but few of these systems remain operational today. Residents hate them because they often result in cold showers, so they bypass the system, and because utilities can’t monitor this remotely the city doesn’t pick this up until long after the fact.

Cape Town, by contrast, plans to incentivise residents to voluntarily reduce their demand, store renewable energy with batteries for use during peak periods, and burn gas to fill the gap. This is a more future-proof strategy that addresses the problem while maintaining or improving the quality of service to residents.

And there are home-grown technologies to help them do that.  As an example, consider intelligent thermostat systems. Like ripple relays, installing these on 10% of homes can eliminate an entire stage of load-shedding. Unlike ripple relays, intelligent themostat systems use the latest technology to ensure that you still get hot water without changing your behaviour, and save an average of more than R250 per month. And it’s future proof too, meaning not only can they reduce demand during peak times, they also dynamically shift this demand to align with times when clean energy is available.

Climate change as an imperative

We face an existential threat from climate change, both to the survival of humanity and the competitiveness of our economies. In turn, we need to be doing everything possible to mitigate carbon emissions.

Unfortunately Joburg’s plan threatens to increase the city's structural reliance on carbon-intensive fuels — both from their planned diesel peaking plants, and from the static nature of their demand-side interventions. For example, the ripple system may reduce peak demand, but it will cause geysers to go cold during this period and then all turn on simultaneously afterwards — shifting the peak later, often towards times when renewable energy is not available.

Cape Town’s plans instead lay the foundation for a clean energy system. It increases renewables in the generation mix, and couples this with battery storage and demand flexibility to handle times when renewable energy is not available.

These opposing approaches could have dramatic effects on the relative future strength of each city's economy and attractiveness for foreign investment.

The load-shedding crisis presents SA with a unique opportunity: to put in place the pieces that will not only improve the reliability of our electricity system but also ensure electricity is affordable and clean.

In time, the right approach will enhance municipal budgets to support continued service delivery, and position our economy for global competitiveness.

• Kornik, former lead of Google's Africa energy business, is CEO of smart energy company Plentify.