More big companies going off the grid

Written by Ciaran Ryan. Posted in Journalism

Out of sheer necessity, Zimbabwe leads SA in exploring alternative energies. From Moneyweb.

The R20m microgrid at Siemens in Midrand is controlled by an Internet of Things platform that switches between solar energy, battery storage, diesel generator and the Eskom grid. Image: Supplied

The R20m microgrid at Siemens in Midrand is controlled by an Internet of Things platform that switches between solar energy, battery storage, diesel generator and the Eskom grid. Image: Supplied

Businesses in Harare, facing power outages for up to 18 hours a day, are making plans to generate their own power and wean themselves off a hopelessly unreliable national grid that relies on supply from Eskom and the hydro plant at Cahora Bassa in Mozambique.

Virtually every business in Harare and most well-off homes have a generator as a back-up, but these are expensive to power and heavy on maintenance.

Out of sheer necessity, the country appears to be streets ahead of SA in moving off grid. Renewable energy companies are selling up a storm in Zimbabwe, offering hybrid wind-solar and other power sources that promise to help the country’s business sector go off-grid.

Read: Companies planning to go off the grid

Bryan Frank runs Sable Press in Harare and recently acquired a new printing press that would allow the company to launch a new range of printed products. But the printer is gathering dust because it requires a steady supply of electricity – something Harare cannot offer. Several businesses have clubbed together to erect a hybrid solar-wind generator that will take them completely off the grid.

It’s a question of survival, and Zimbabweans are masters at it.

Virtually every business and household in Harare has a Plan B for the top three issues of concern: when the power goes out, when hard currency disappears, or when government services cease altogether.

The contract offered by a US energy supplier erecting the microgrid locks in electricity prices for several years and ensures businesses can continue running their plants without leaning on a decrepit national grid. It’s not so much the price of electricity that concerns businesses as the continuity, says Frank. Companies tapping into this microgrid will purchase electricity from the supplier, which eases the up-front cost of having to acquire wind turbines and solar panels.  

The successful installation of solar panels at the 118-room Road Lodge Centurion has resulted in large-scale solar panel installations at 25 of the group’s hotels, due to be completed by end-2019. Image: Supplied

Local businesses are accustomed to power outages, but things got a whole lot worse this year when the government reintroduced the Zimbabwe dollar, creating a shortage of hard currency among businesses. The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) was unable to pay its debts to Eskom, resulting in the lights going out for between 13 and 18 hours a day.

The situation became so desperate in July that platinum producers reportedly coughed up $10 million of a $70 million debt to Eskom and Cahora Bassa to keep the lights on.

Microgrid benefits

In Midrand in Gauteng, Siemens recently unveiled its new microgrid covering part of its 22 351m2 parking lot and office building. This is part of a new wave set to sweep over Africa, says Marco Rahner, head of technical sales at Siemens. “Demand is huge in places like Rwanda, Kenya, Ghana, Tanzania and Zimbabwe.”

The cost of retrofitting the Siemens office park for solar panels was R20 million, with a payback period of just five years, as opposed to the 11 years originally envisaged when the project was first conceived. The company saves 174 000 kilowatt hours (kWh) a month, equivalent to half its normal consumption.

Some fancy intellectual property has been built into the system to optimise lower time-of-use tariffs from Eskom.

Excess power generated during sunlight hours is fed into a 140kWh battery, which gives a relatively short 15 minutes of additional power when the sunlight fades or the Eskom grid goes down.

The importance of the battery back-up is that it allows ‘peak shaving’ – a reduction in the amount of Eskom energy used during peak demand. Surplus power during peak sunlight hours can also be sold back into the Eskom grid. The entire system is monitored and controlled via an Internet of Things energy platform that switches between solar, battery storage, diesel generator and the Eskom grid.

Up-front costs coming down

One of the big drawbacks of alternative energy systems is the high up-front capital cost and long payback periods, though these have been coming down in recent years due to better solar technology and the lower cost of panels. Payback periods have dropped from 12 to eight (or even six) years in the last 15 years.

A payback period of five years starts to look attractive for many businesses concerned about Eskom’s continuity of supply going forward.

Microgrids have the potential to create business opportunities in poor or remote parts of the country by selling excess energy to surrounding businesses. You could take it one step further and create a transparent energy retail environment, where a resident in another part of the country could choose to top-up their electricity directly from a microgrid supplier based elsewhere, says Sabine Dall’Omo, CEO of Siemens Southern and Eastern Africa.

Decentralising power

“The concept that energy must come from one central source is inefficient and outdated,” she says. “By decentralising energy and allowing people to generate and use energy as needed, you’re allowing people to take charge of their own prosperity. On a continent like Africa, with the incredible opportunity for solar and wind generated energy, keeping energy centralised severely hampers the potential for economic growth.

“Microgrids are an effective way to quickly and effectively diversify a centralised energy grid. By employing microgrids you not only take the strain off the central grid and lower your carbon footprint, you also create economic opportunities where people can sell off excess energy produced.”

Moneyweb previously reported on companies going off grid, such as Anglo Platinum, Sibanye-Stillwater and Makro. Telkom, too, has erected solar panels at its Centurion campus as part of a plan to eventually go completely off-grid, using batteries and gas generators when the sun stops shining.

Companies want to ensure continuity of supply at an affordable price, and microgrids are one way to do it. South African businesses are nowhere near the kind of grid collapse facing Zimbabwe, but many fear a reprise of the power outages experienced in recent years and are making alternative plans.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.