Communities in three provinces are looking to generate their own power to secure an uninterrupted supply of electricity and avoid Eskom’s rotational black outs.
A section of Linbro Park near Sandton, north east of Johannesburg, a community in the Eastern Cape and a business group in the special economic zone in Harrismith in the Free State want to give Eskom and their municipalities the boot by sourcing power privately.
The National Energy Regulator of SA (Nersa) is processing an application from independent power generator, Greenstone Energy which wants to distribute power to parts of Linbro Park.
Nersa spokesperson Charles Hlebela said the Greenstone Energy application is the only application they have received so far.
“This application was motivated by the Schedule 2 Notice to have a generator supplying customer(s). However, Greenstone Energy applied for a distribution facility, which is from the generator delivery point to its customers ... [and this] is now under consideration,” Hlebela said.
Nersa held a public hearing two weeks ago “to gather more information from stakeholders” as part of the public participation process and information gathered will be taken into consideration, he said.
Thomas Garner, who chairs the SA Independent Power Producers Association, said the initiatives showed South Africans wanted “reliable, sustainable energy from suppliers of choice”.
“This is something we are going to see more often ... the government, Eskom and Nersa have in the past 20 years tried to make it difficult for the energy market to be liberalised,” Garner said.
He said the Harrismith initiative was prompted by three months of power cuts from December to March after the Maluti-a-Phofung municipality reported damages to a mini-substation and a switch gear.
In the Eastern Cape, independent power producers are behind an initiative which, if successful, will see a public-private partnership project to introduce hydroelectric power to the grid.
The Greenstone Energy application with Nersa, which The Sunday Times has seen, says their client, Adamjee Energy has been appointed by a developer to administer the utility of power at the developer’s portfolio in Linbro Park.
Adamjee Energy is looking for alternative supplies because of repeated power cuts, theft and failure of infrastructure, and high tariffs and capacity charges, the application reads.
In the past 12 months properties in Linbro Park have experienced a total of 1,594 hours without power, excluding load-shedding, it adds.
The application covers 18 properties including two schools, religious facilities, a hotel, a conference centre, three office blocks and residential estates consisting of 1,781 homes.
Jenny Rose, founder of the Linbro Park Developers Forum and an estate agent in the area, said projects have stalled as a result a shortage of electricity in the area and a substation is required.
The lack of supply dates back to 2015 so Balwin [Properties, the developers] had to find a hybrid solution which involves solar to be able to buy their land and develop 3,000 units,” Rose said.
She said the land could house 15,000 units, but the projects are stalling due to a lack of power.
“If this application to Nersa is successful, it’s going to take 18 properties, including two schools, off Eskom’s hands and free up electricity to continue development,” Rose said.
Eskom has opposed the application. Daphne Mokwena, the state-owned utility’s customer services senior manager in the Eskom Gauteng cluster, said Nersa was against having two licensed distributors within the same geographical space.
“Eskom is now supplying customers in that area and also has network in the area,” Mokwena said.
Eskom welcomed any efforts to assist in alleviating pressure on the national grid, however this should be conducted within Nersa regulations, she said.
Spencer Tarr, chair of the Linbro Park Community Association, said they supported the Greenstone Energy application, as the area’s infrastructure has been a problem for about 10 years, with Eskom unable to resolve it.
“Our cables are stolen on a daily basis, electricity supply here is a major problem and there has been no meaningful response from Eskom,” Tarr said. “In the greater scheme of things, independent power suppliers who can supply to the grid must be welcome.”
Thabo Khesa, a spokesperson of the Maluti-a-Phofung local municipality in the Free State said it had taken “far too long” to fix a substation that had completely burned down, leaving their Special Economic Zone (SEZ) in Harrismith without power.
Khesa said their electricity system is “overwhelmed and gets worse in winter”.
Matt Ash, an energy specialist and head of energy at Norton Rose Fulbright SA, said their research shows that distribution licences have been issued to “private” distributors in very limited circumstances.
These included a distribution licence issued in 2010 to West Rand Power Distributors for customers and end-users in West Village, and a distribution licence issued in 2012 to Vleesbaai Dienste for Vleesbaai Holiday Town.
“If the distribution system within the Harrismith SEZ is privately owned, then it appears it would be possible for a ‘private’ distribution licence to be issued to the owner and operator of that distribution system,” Ash said.
He said if a new privately owned and operated distribution system is developed within Linbro Park or other municipal areas, precedent indicates it should be possible to obtain a distribution licence for that private system.
Clyde Mallinson, an energy consultant, agreed that a licence was much easier to obtain for a new development than an existing one which is already served by Eskom.
“I can’t see Nersa granting a distribution licence to carve out a part of an existing grid,” Mallinson said.
Prof Anton Eberhard, a senior scholar at the Power Futures Lab at the University of Cape Town’s Graduate School of Business. said: “Where municipalities are failing, consideration should be given to the nearest functioning metro, Eskom distributor, or indeed willing private operators, to take over responsibility for electricity distribution under a service level agreement or a private concession agreement.”
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