South African businesses ditching Eskom

South African businesses are rapidly adopting renewable energy to protect against load-shedding and other power interruptions.

According to the latest data from the National Energy Regulator of South Africa (Nersa), there has been a significant surge in the number of large private power facilities installed by businesses over the past five years.

The regulator registered over 4,490MW of private power installations with minimum capacities of 100kWp in 2023, well over double the capacity registered in the previous year.

The total capacity registered for 2023 is equivalent to the amount of power shed in around four stages of load-shedding.

2022’s registered capacity was already 12 times higher than in 2021, jumping from 134MW to 1,646MW.

All these numbers dwarf the meagre 23MW of private power capacity added in 2019.

In addition, the total value of investments in the facilities, which excludes what households spent on private power, skyrocketed from R464 million to R84.96 billion over the past five years.

The table and graph below show how much large-scale private generation capacity was registered by Nersa in the past five years.

A major factor in the rapid growth of private power installations has been government removing a cap on private generation capacity that required installations with more than 1MW output to be licenced by Nersa.

In June 2021, President Cyril Ramaphosa announced that privately built generation would no longer require a licence from Nersa if its installed capacity was below 100MW.

This was already 100 times higher than the previous 1MW threshold.

A year later, the energy department completely scrapped the requirement for a generation licence as long as the facility does not import or export electricity to or from the grid.

The facility is also exempt from licencing if its operator wheels electricity to customers via a connection agreement with a transmission or distribution licence.

The licencing requirement was previously criticised as a major stumbling block for private generation uptake, with many companies complaining that Nersa dragged its heels on approvals.

While the licence requirement has been eradicated, entities must still register facilities with over 100kW capacity with Nersa.

MyBroadband perused the list of registered entities in 2023 and found that the vast majority were farms, vineyards, and agricultural businesses.

Property developers such as Attacq and Growthpoint and retailers like Shoprite, Pepkor, and Pick n Pay were also featured.

There were also several Independent Power Producers (IPPs) with larger-scale commercial facilities.

Private solar uptake has played a significant part in keeping Eskom’s overall daytime electricity demand and peak demand down, helping the utility avoid load-shedding for over two months.

The South African Photovoltaic Industry Association (SAPVIA) has a portal that tracks cumulative installed solar PV capacity in the country, with breakdowns by customer segments.

According to its latest estimates, households accounted for 621MW of the 5,659MW capacity installed in the first quarter of 2023.

Commercial, industrial, large-scale, and utility-scale installations made up the remaining 5,038MW of capacity.

These numbers have changed substantially over the past year.

MyBroadband asked SAPVIA for an update, but it did not provide feedback by the time of publication.

However, Eskom has estimated there was around 5,490MW of “behind-the-meter” rooftop solar installed by households and businesses in April 2024, an increase of more than 2,100MW from April 2023.

This capacity excludes 2,287MW of utility-scale PV solar power and 500MW concentrated solar power run by IPPs that supply electricity to Eskom’s grid.

Stats SA’s latest household survey estimated that about 475,000 households in South Africa had solar power installations by the end of 2023, the capacity they contribute is unknown.

If one assumes that the average household with solar had 3kWp generating capacity, supported by entry-level arrays of five or six panels, that would work out to about 1,425MW of combined capacity.