South Africa’s Energy Commons

ENERGY systems linked by information technology could deliver a revolution in energy provision as the PC does for electricity what Windows and Macintosh did for operating systems. Remember the days when the only computers to be found were large mainframes in universities? The personal computer helped consumers escape from the clutches of centralised computing and large corporates like IBM.

Netmetering could revolutionise electricity provision in South Africa. We have reached the point of grid parity, “in which the cost of producing electricity and the cost of purchasing it from Eskom are the same’, points out David Lipshitz of Mypowerstation, one of the many online metering projects which have sprung up on the back of the revolution in connectivity, It is therefore only a matter of time before alternative energy grids powered by the Internet become a reality.

New emerging technologies which allow consumers to produce and share energy are already surpassing the state’s ability to deliver affordable electricity, as centralised power grids become a thing of the past and abundant free electricity becomes a very real possibility. It all comes down to how one defines the energy grid and how the new netmetering projects are going to be structured — whether as energy cooperatives or as micro-enterprises — the result determines whether a new energy commons connected by the Internet becomes a reality.

Free electricity systems and the smart grids of the future could be just around the corner. But first, lets rewind to how we got here.

Problem is the manner in which South Africa has structured its energy system as a cash cow for municipalities which purchase bulk electricity from Eskom, the national energy provider. The City of Cape Town for example, earns billions from the resale of electricity to consumers. Municipalities, according to the National Energy Regulator may be receiving up to 60% of their revenue in this way. There is thus no real incentive to support the new decentralised energy systems which could end up, not only saving consumers money, but also providing cheap, low-cost and near-to-gratis energy for everyone.

Historically, small power stations owned and operated by municipalities were gradually replaced by the centralised power grid. In South Africa, the grid is operated by an apartheid-era parastatel, Eskom which took on a new metastasized form after 1994. Following rolling black-outs, Eskom embarked on an aggressive expansion exercise with successive increases of about 25% a year and most recently announced plans for a 16% rise. Eskom Chief Executive Brian Dames explains the reason for the costs: “we need to continue to invest in the electricity infrastructure which can support higher rates of economic growth and development and extend access to electricity to all South Africans.” In other words, needless infrastructure projects which merely benefit tenderpreneurs.

The solution to the double bind of increasing capital and infrastructure costs and the resulting increase in tariffs appears to be in shifting energy away from being just a commodity (to be bought or sold) into a public good. In other words, a broad social commons. Paul Hartzog of the Forward Foundation sees the Energy Commons as one of the five commons (along with food and culture) which emerges as energy production ‘shifts from massive technological production infrastructures to smaller scale distributed energy production networks’.

The return to the idea of small scale energy provision, whether by Independent Energy Providers (IPP), or via small home installations, has been long coming, and is in part fueled by Eskom’s spiraling energy costs.

Relocating energy provision within a social commons, as advocated by academic John Byrne in a deregulated environment would open the way for the networked energy systems and smart grids also envisioned by the futurist Jeremy Rifkin, in which energy is supplied to consumers by thousands of small producers, much like Internet content is supplied by a network managed by service providers. The obstacles are thus not technological, but rather political.

There is no technical reason why small scale suburban and urban energy collectives cannot organise around energy provision, entering into collective bargaining agreements with their respective municipalities in a framework in which the grid acts as a battery, storing energy when there is a surplus, and providing energy when it is needed. It all depends upon the enabling environment, access to the cables which connect homes to each other and the resulting energy traffic.

The entire feed-in tariff debate which has been going on for almost a decade, hinges upon the idea of consumers being able to feed surplus energy back into the grid, and finding some means of metering the result. Climate Smart’s Hilton Trollip, confirms there is no technical reason why your electricity metre cannot run backwards. Online energy companies such as Mypowerstation have already begun to offer netmetering services in anticipation of deregulation, while the feasibility of net-metering and other technologies which could allow consumer-producers to buy and sell electricity, thereby freeing ordinary citizens from the dictates of centralization, is quite advanced.

Yet it could take decades for Eskom to unbundle its infrastructure, granting consumers access to the “local loop” so far as the traditional grid is concerned. If only the South African government would review its monopolistic grip on the local energy market, the market could be freed to deliver what consumers really need, instead of being dictated to by interest rates, the cost of lending, in an environment in which the only winners are the banks, the broad energy commons could provide the same valued added services we find in other deregulated systems such as mobile phones.

* NOTE: Eskom has asked the National Energy Regulator of SA for an increase of 16%/year for the next five years, starting in April 2013. That comes on top of average annual increases of 25% for two consecutive years, plus a 16% r ise in the year to March 2013. Eskom now charges 61c/kWh, before municipalities add their own charges.

** Wind is the now the cheapest form of electricity generation, with an average price of 89c a kilowatt hour compared to 97c/kWh for Eskom’s new coal-fired power stations.

*** The 2012  bidding round for alternative energy projects should add an additional 3,200 megawatts of power to the national grid by 2020. The government is targeting 1,470 megawatts from onshore wind projects, 400 megawatts from concentrated solar power and 1,075 megawatts from solar photovoltaic projects, Biomass and biogas projects should each generate 47.5 megawatts, small hydropower projects 60 megawatts and other small projects 100 megawatts