Electricity supply as a service and as a commodity not the same

29th September 2017 By: Kelvin Kemm

This topic keeps coming up, so I am going to address it yet again. It is important, very important. When referring to an electricity supply, there is the concept of despatchable power and nondespatchable power. This means that the light comes on when you flick the switch at any time – 24/7. Or the light does not come on when you flick the switch, but comes on only when someone else decides that you can have the power.

This factor of personal choice and convenience is extremely important. This is what distinguishes an electricity supply that is a service from one that is only a commodity supply. A ‘service’ has a time factor built into it. A ‘commodity supply’ means that you get some of the commodity, but not with a time factor inherent in it.

Let us think of water, as a comparison. Imagine that someone says that he or she will supply water to you at some price. The water comes out of taps in your kitchen and bathroom. To get the water, you turn the tap on.

But then someone says that he or she can supply your new house with water and, instead of waiting a month to be connected, he or she can have you up and running the day after tomorrow. So you say: “Wow! Okay, I choose the 48 hour option.” The guy arrives. He supplies the homeowner with a bucket and says that there is a river only one kilometre away and all you have to do is walk to the river and fetch as many buckets of water as you like. But, he points out, there is one snag: there is a high fence between your house and the river, but it does have a gate. However, the gate is not always open and the only way to find out if the gate is open is to go there.

Will the new homeowner be happy? Probably not. The homeowner will, no doubt, say: “But I thought that the water would come to my house.”
“No,” says the bucket supplier, “you never said anything about convenience – you only asked for a water supply.”

When one says that a house has water, there is an inherent assumption that it means pipes coming to taps and that the taps work all the time.

The same is the case with electricity. When someone says that he or she can supply electricity to your house, you assume that the lights will come on when you flick the switch, no matter when.

But that is not the case with solar- and wind-generated electricity. They are like fetching the water in a bucket. There is no solar at night. There is no wind electricity when the wind does not blow. You can flick the switch all you like – you will get no solar power in the dark.

Have you noticed the trick that the solar and wind power people use? They tell you that some solar plant can supply ‘enough electricity’ to power 95 000 houses. They do not tell you ‘when’. That is a trick to get over the fact that they are not providing an electricity ‘service.’ They are only supplying the commodity at a time that suits them, not you.

But when consumers buy electricity from State-owned Eskom, they assume that it is a service. They assume that the electricity will always be available – at the flick of a switch.

So, it becomes Eskom’s problem to convert the erratic, unreliable solar and wind electrical output into a steady, reliable flow of supply to your house.
Those costs have to be borne by Eskom; they are not included in the apparent solar and wind prices that are quoted in the newspapers.

Somehow, virtually all journalists fail to understand this very simple, but very important, point.

Just try running a TV news channel on solar panels. Imagine them all praying that a cloud does not pass in front of the sun just as the election results are being announced.