MARC ASHTON: Learn from load-shedding and prepare for the water crisis

The first time most South Africans heard the term load-shedding was in 2007, so if you are under the age of 16 you’ve never experienced a year without power interruptions in Africa’s most industrialised economy. 

It is unlikely that load-shedding will be alleviated before this group turns 21. While there has been a rapid rollout of rooftop solar in the past three years, there are some structural lessons we can draw on as we prepare for our next supply crisis of a basic commodity: water. 

There is no question that the water crisis is on our doorstep. You have to take only a cursory look around Johannesburg to see the infrastructural collapse, with burst pipes everywhere and notifications of water interruptions gathering momentum.

While electricity blackouts can be devastating to businesses, the average citizen can cope with four to eight hours of electricity interruptions each day. The impact of water interruptions is far more immediate. 

Fortunately, we can take some of the lessons we have learnt from the load-shedding crisis and apply them to the water infrastructure situation. 

Specialised skills

Every man and his dog is now a “solar installer”, but apart from the SA Photovoltaic Industry Association (Sapvia) green card, there is no real standardised training or learnership in the solar space. Sixteen years into the crisis and we have not seen significant investment in the skills required to deliver high-quality solar installations.

One of our most forward-thinking clients has invested in a training facility that has already trained more than 100 solar technicians, but on the traditional broad-based BEE (BBBEE) scorecard, organisations can’t claim this as skills development.  

A similar challenge is going to face the water sector shortly as demand soars for quality plumbing and engineering skills.  

Right funding models at the right time 

The Renewable Independent Power Producer Programme (REIPPP) is widely regarded as one of the most successful public-private partnerships in the world today. Even so, the model has its flaws, among them problems delivering fundable business models. Many of the power producers are premised on unsustainable tariffs. Between bidding, being selected and breaking ground, the funding models simply haven’t worked.

Despite the REIPPP’s success, the real catalyst for the adoption of rooftop solar was when SA hit load-shedding stages 4, 5 and 6. From there we started seeing funding solutions, rent-to-own and solar-as-a-service becoming mainstream. 

Similar to solar, if you are looking for a quality wastewater recovery solution for your home or small business you would be looking at an investment of R100,000 to R200,000. Since the average middle-class South African does not have this at hand, they will either need a rental solution or a way to integrate it into things such as their bond or an small business lending facility.  

This is one of the areas where we have a head start in responding to this crisis, as banks and lenders can use the load-shedding lessons to adapt their financial product structures to cater for water infrastructure.  

Citizens as partners

We cannot be 16 years into an economy-crippling energy crisis and still have senior policymakers bemoaning the fact that the transition to solar is robbing municipalities of revenue. This is such an important ideological point — municipal revenue increases when the economy grows and property values rise, not by trying to squeeze blood from a stone.  

By all means enforce standards, but recognise that innovators need an environment to rapidly roll out their solutions. Since these are new areas for funders to explore, they require certainty before they will leap in and rely on the government to set the tone. 

Think incrementally 

While the REIPPP has been strategically important, SA spent a lot of time on the primary generation side of the energy crisis. We wanted big, transformative projects that would move the dial in terms of impact.  

Depending on your data source, rooftop solar has added 3GW-4GW to the ecosystem. We make the distinction between ecosystem and grid because presumed small changes have changed the quality of life for many residents, business owners and social initiatives.  

Battery storage, microgrids, wastewater recovery and purification ... the small solutions add up quickly when there is a focus on them.   

Democratising access  

Enterprise and supplier development (ESD) funding remains one of the easiest ways to unlock funding for solar projects, and yet this has received only limited attention from corporate SA. In recent months it feels like a light bulb has gone on, with corporate funders starting to recognise that by deploying ESD funding in this space they can tick multiple boxes, including: 

• ESD commitments as part of their BBBEE scorecards;
• Ensuring energy security for their suppliers and customers;
• Social impact projects to align with their socioeconomic development and corporate social investment commitments; and  
• The alleviation of stress on existing infrastructure.  

Ideally, we want to find solutions that democratise access to infrastructure that benefits communities. Access to solar has for much of the past five to 10 years been limited to those who can afford it, and it would be a real injustice if the most vulnerable are precluded from alternative solutions in the water sector for that long as well.  

The SA water infrastructure crisis is looming. The load-shedding crisis and the adoption curve around solar has taught us some valuable lessons. We just can’t wait another 16 years to realise the urgency of the situation.   

• Ashton is CEO of consulting firm Decusatio Impact Investment Solutions.