Market Insights

Off-Grid Cities Study Exposes South African Energy Transition Crisis

June 10, 2023 by Claire Turvill

Researchers from Johannesburg, South Africa, are considering the social implications of the transition to sustainable cities.

According to the United Nations, the global urban population surpassed the rural population in 2007, when the global population was 6.6 billion. By 2050, the global population is expected to reach approximately 10 million, with 68 percent living in cities. Cities are responsible for about 66 percent of the world’s energy consumption.


Johannesburg, South Africa

Johannesburg, South Africa. Image used courtesy of Pixabay

 

In Johannesburg, a research project called Off-Grid Cities – co-funded by the National Research Foundation (NRF) and the Gauteng City Region Observatory (GCRO) – is investigating the integration of elite infrastructure transitions into discussions to create environmentally sustainable and equitable cities.

 

Energy and Water Security

Across South Africa, residents are simultaneously experiencing an increasingly debilitating energy crisis and water shortages. In 2022, electricity interruptions were experienced during 75 percent of 205 days. 

Ekson, the state-owned power utility in South Africa, has conducted rolling power cuts for years, but so far, 2023 has proven to be the worst, with longer outages and no apparent solution. The electricity shortages result from frequent failures in many coal-fired power stations across the region and corruption, draining the utility company of $50 million monthly.

Johannesburg is the largest contributor to the country’s GDP, with a population of about 5 million people. Energy security is crucial to the ongoing vitality of the city, but the worsening electricity cuts are impacting productivity, leading to increasing demands for a solution to the crisis.

In late 2022 and into 2023, a combination of heat waves, sporadic water pumping due to electricity disruptions, and infrastructure breakdowns have resulted in an overwhelming demand the available water supply cannot meet. Residents in Gauteng have been confronted with nearly daily low water pressure or even complete water cuts.

 

Alternative Supply Options

Data from the GCRO at Wits University shows more households utilizing alternative energy and water sources to ensure supply stability. Christina Culwick Fatti, a senior researcher at the GCRO, says this is more common in the city’s high-income households, who have the resources to invest in water and energy alternatives. 

At the beginning of 2023, GCRO researchers used survey data compiled between 2013 and 2021 to examine how households in Gauteng were investing in electricity and water alternatives at that time. During that time, access to alternative sources increased. 

In 2013-2014, 0.8% of all residents responded that they had access to solar or wind energy, and only 0.3% had a generator. The 2020-2021 surveys showed that these numbers increased to 5% and 4% respectively. 

However, this increase in access is disproportionate between higher- and lower-income households. 

Between 2015-2016 and 2020-2021, access to solar power within the lowest income groups increased from 0.3 percent to 3 percent. In contrast, the highest income group saw a rise in solar access from 4 percent to 12 percent during the same period.

 

difference in solar and generator access from 2015-2021 across income brackets in South Africa

Data from the Off-Grid Cities project shows the difference in solar and generator access from 2015-2021 across income brackets in South Africa. Image used courtesy of GCRO

 

In 2020-2021, 2 percent of respondents whose monthly household income was below 3,201 ZAR (177 USD) possessed a rainwater tank. Four percent of households in this income bracket had access to a borehole or well. 

In contrast, a considerably higher percentage of 9 percent of respondents in the higher income groups, with a monthly household income over 25,600 ZAR (1,415 USD), had either a rainwater tank or borehole.

 

percentage of residents with a borehole or well in 2020/21

Light blue indicates the percentage of residents with a rainwater tank in 2020/21, and dark blue indicates the percentage of residents with a borehole or well in 2020/21. Image used courtesy of GCRO

 

A growing disparity is emerging between wealthier households, who can protect themselves from electricity and water disruptions, and poorer households, who lack the means to do so.

Rainwater tanks cost about 4,000 ZAR (220 USD), a borehole costs up to 180,000 ZAR (10,000 USD), and residential solar panels cost 8,000 ZAR - 10,000 ZAR (440 USD - 550 USD), depending on the panels’ power output. Individuals investing in inverters and batteries will pay even more. 

In an already unequal country, the poorer households of South Africa are less able to protect themselves from utility supply disruptions with power and water alternatives.

 

Self-Generated Electricity Trend

There is a potential for an even greater disparity to emerge due to the financial framework governing municipal services. 

Municipalities rely on income generated from providing essential services such as water, electricity, and waste management to support their mandated functions. They use the revenue from industries, businesses, and wealthier consumers to subsidize services for disadvantaged communities. As a result, this funding model could widen the gap between privileged and underprivileged segments of society.

The current trend among residents and businesses to adopt self-generated electricity carries significant implications for the economic stability of municipalities and equitable access to essential services. It also presents technical challenges. 

Private investments in self-generated electricity have the potential to strain and complicate the existing power grid. Grid-charged battery systems contribute to increased electricity consumption and post-load shedding peaks. While solar installations alleviate pressure on the grid during the daytime, they do not address evening peak demand. Power plants then continue generating surplus electricity during the day to meet the heightened evening demand.

However, opportunities to leverage private investments to address the growing energy crisis and potential future water challenges are emerging.

Municipalities are exploring incentivizing households and businesses to sell excess power to the grid. Doing so would reduce the cost of electricity for cities and allow more resources to remain available for cross-subsidizing services for those with lower incomes.

Households and businesses that have invested in battery storage are being offered the option to sell excess energy back to the grid during the evening peak periods. This innovative approach can help alleviate strain on the grid and optimize the utilization of renewable energy resources.

 

Ongoing Off-Grid Cities Research

The Off-Grid Cities research project is an ongoing endeavor to understand the transition to hybrid and off-grid energy supply among higher-income households in South Africa. The findings aim to contribute to discussions on climate change impacts in the global South, emphasizing the need to consider infrastructure transitions within higher-income groups when striving for environmentally sustainable and socially equitable cities.

The research team is conducting interviews in Cape Town, Johannesburg, and Ekurkuleni with residents, business owners, alternative energy suppliers, government officials, and various experts to assist in their conclusions.