The frequency and duration of distribution-related electricity supply interruptions is rising across South Africa and will continue to increase unless far-reaching reforms are undertaken, an independent energy consultant has warned.
Dr Willie de Beer, who is a former executive of EDI Holdings, set up to oversee the consolidation of the country’s fractured electricity distribution sector before the programme ran into Constitutional constraints, said that the role of the distribution sector in recent disruptions had been masked by the country’s power generation shortfalls.
“The supply challenges are so well known and promoted that all power interruptions are currently blamed on generation,” he said at a South African National Energy Association event. De Beer highlighted a World Bank report, which stated that South Africa was experiencing around 56 days of distribution-linked disruptions yearly.
However, the prevailing suppressed demand, which had seen electricity sales fall to levels last experienced in 2007, was creating “artificial comfort” that all was well in the area of electricity distribution. There was also a suggestion that all South Africa’s electricity problems would be addressed once the generation supply constraints were eased.
In reality, the country faced a major distribution investment backlog, which was estimated at R68-billion in 2014.
In addition, the business model for municipal and utility distributors was being disrupted by the emergence of new generation alternatives that were resulting in some consumers either defecting from the network, or seeking to supply surplus capacity into the grid. It had also become increasingly difficult for municipal distributors to collect revenue from electricity sales and to secure the servitudes required to increase network capacity in certain urban centres.
De Beer argued that there was an urgent need for South Africa to begin to tackle the backlogs and adapt to the changes, suggesting that any current reforms in the sector were by “default” rather than design.
“The current arrangement of the electricity supply industry in South Africa is not yielding the right growth results for the country,” he said, adding that an unbundling of the vertically integrated model was increasingly necessary to improve visibility of the costs across the full value chain.
The new model would also have to cater not only for large-scale renewables, but also embedded generation, such as rooftop solar on households and business facilities. Licensing and grid-code requirements should be overhauled where these presented a constraint to new capacity, De Beer argued.
The National Energy Regulator of South Africa (Nersa) announced last year that the long awaited regulatory framework for small-scale embedded generation would only be finalised after the Department of Energy (DoE) completes new licensing regulations for all generation facilities.
The DoE was reportedly in the process of drafting the regulations in line with the Electricity Regulation Act and has initiated consultations on the proposed rules with Nersa and other stakeholders.
Independent Power Producer (IPP) Office special adviser Mike Rossouw gave assurance that the new licensing regulations were not only being prioritised, but would seek to address the issue of embedded generation and cater for other emerging technology solutions.
Rossouw indicated that the regulations should be published during the course of the year and gave an assurance that they would make it easier for embedded generators to be licensed and for investments to proceed.