Written by Craig Polkinghorne, Head of Commercial Clients South Africa at Standard Bank South Africa

After only passing the mid-way mark for 2022, South Africa has already broken its load-shedding record set last year. According to the Council for Scientific and Industrial Research (CSIR), by 3 July, Eskom had cut 2 528 GW of energy due to controlled blackouts, which is when it surpassed 2021 figures.

Even after this date, weeks of skipping between stage 2 – stage 6 schedules followed, leaving citizens and corporates frustrated and concerned about SA’s future energy security. As a response, President Cyril Ramaphosa addressed the nation at the end of last month, citing the reasons for current circumstances as an effect of years under state capture, old power stations’ declining performances, and delays of essential maintenance leading to breakdowns.

After acknowledging that our nation is facing a national energy crisis, the President shared what he called “a bold and courageous” plan to bridge the country’s electricity gap. One of the fundamental steps government will be taking, he announced, is to transform the electricity sector and position it for future sustainability.

Power cuts were preventable

According to government’s specific action plans shared in the address, sustainable energy will play a key part in this transformation. But there is still a long way to go.

As recently as two years ago, only 10.5% of our country’s electricity was generated from renewables.

A recent report by Meridian Economics shows that almost all of 2021’s power cuts could’ve been avoided, calculating that 96.5% of last year’s controlled blackouts were preventable had an additional 5 GW of wind and solar energy been generated. This equates to the approximate capacity of only two REIPPPP bidding rounds.

This means that if government wants to realise its objective of generating 11,8 GWh from renewable energy by 2030, the percentage must increase to 41%. The impact, should this become a reality, would have a tremendously positive effect on the country and its economy.

Some economists estimate that stage 6 loadshedding causes daily GDP losses of R4 billion. With a total of 1 165 hours of loadshedding in 2021 alone, the long-term economic impact is more than significant. To date, our country’s economy has already shrunk between 8 – 10% due to the energy crisis.

SA’s success depends on all of us

However, what many South Africans may have missed is that in the President’s address, he called on all citizens to be a part of the solution by contributing in any way they can to end South Africa’s energy scarcity. “All the people I have spoken to have said this is the time when the country must unite to address this challenge.”

Unfortunately, most citizens and corporates are simply blaming government, then sitting back and sulking in the dark. And with this mindset, it will be very challenging to transform an energy crisis into a sustainable energy environment. What is important to realise is that at the end of the day, it is the everyday man and woman that will suffer the most if a stable and secure power supply isn’t created.

Due to loss of productivity, loss of profit, loss of customers, and loss of products resulting from electrical surge damage, spoilage, and theft, many businesses are struggling to keep their doors open amid this energy crisis. This inevitably leads to retrenchments and unemployment rates increasing.

This is why the responsibility is on all of us to do whatever we can in our capacities as citizens and corporates to assist government with transforming our country’s energy industry.

Accelerating Africa’s growth

As an organisation, Standard Bank completely agrees with this sentiment. In fact, it entirely aligns with how we see our role as an entity, which is to passionately pursue ideas and partnerships that drive Africa’s growth.

One such initiative is PowerPulse.

Built to transform the way South Africans produce, deliver, and consume energy, the PowerPulse platform accelerates the decentralisation of energy production and consumption by analysing clients’ alternative energy feasibility, then matching them with credible Engineering, Procurement and Construction (EPC) providers. Ultimately, it enables the engagement between clients and accredited energy solution provides in an efficient and competitive manner, facilitating cost savings and sustainable energy solutions for businesses.

The procurement process is an incredibly important step in the journey to sustainable energy generation. With initial investment costs fairly significant to move into renewable energy, PowerPulse enables clients to make informed decisions based on trust, creditability, and data to ensure a successful journey to sustainability with the right partners.

From fragmentation to transformation

“In an industry that is extremely fragmented, with more than 3 000 solar energy installers, it is very important that corporates partner with vetted solution providers,” explains Craig Polkinghorne, Head of Commercial Clients South Africa at Standard Bank. “However, what is even more essential is that businesses understand that not everyone are suitable corporate candidates for solar energy solutions. It is an expensive exercise and requires a proper business case,” cautions Polkinghorne.

He advises that there are various factors that need to be taken into account when considering a renewable energy solution, such as funding, how energy intensive the type of industry is, the location, the lease agreement, and so forth. Furthermore, solar costs are fairly volatile due to importing factors, which makes budgeting accurately quite challenging.

“Many clients also make the incorrect assumption that they will be able to go completely off-grid once a solar solution is installed. They get a rude awakening when they realise that a battery system is also needed as a supplementary source, which usually forms 40 – 50% of the total cost of an energy solution.”

The good news is that in Standard Bank, clients seeking renewable energy solutions now have a partner to walk the path with while avoiding these pitfalls. With this first-of-its-kind platform, corporate energy seekers can be matched with energy providers that have Standard Bank’s mark of approval.

This is just another way that the bank is contributing to Africa’s growth by accelerating the adoption of renewable energy solutions in a supportive role. Through these pioneering platforms, such as PowerPulse – which has already started to expand into residential solutions through LookSee, Standard Bank’s integrated solutions platform for homeowners – the bank will continue to transform various essential industries through digitisation, ideation, and ambition to realise our continent’s potential.