The cost of a battery-plus-inverter system to meet the needs of an average household under Stage 4 loadshedding – which is about 6 hours of outages every 24 hours – is about R100,000 to R150,000 (about US$5,000 to $7,600). Eskom is already reporting that there is an added demand of 1.4GW to recharge battery storage, or about 5% additional load on the grid. This has been driven mainly by the use of lithium batteries. On the demand side, the blackouts have led to shifts in the use of grid electricity at a different time of the day/night cycle. Figures of diesel consumption are not available, but, based on the electricity shortfall, I estimate, using the data for April 2023, that the additional diesel usage, excluding Eskom and the independent power producers, was about 660 million litres per month, which is almost the same as the amount used by the whole transport sector. Consumers who require stable energy supply have made alternative plans, in most cases shifting to the use of diesel generators. On the supply side, customers are increasingly using alternative energy sources. Blackouts have changed supply and demandĪnalysis of the usage data from the Eskom portal suggests that rolling power blackouts have led to changes in the country’s energy landscape. As a result, the country has a shortage of generation capacity, a shortage of connection and transmission capacity, and a growing environmental disaster. Instead, it has kept alive an increasingly inefficient and dysfunctional state-owned utility. South Africa indicated an intention to follow such an approach in 1998. The UK, Canada, the US and many countries in the European Union have undertaken market reforms like this, with positive outcomes. Many countries in the world have already restructured their electricity supply industry to establish such a market and introduce greater competition among the power producers. It facilitates contracts between the energy producers, the transmission system and the distributors. But there is another equally important contributor – the failure by the government to unbundle Eskom (the state-owned electricity utility) and create a market operator and a transmission system operator as independent entities.Ī market operator is an energy “stock exchange”.

Much of the media’s attention to the energy crisis has been focused on generation capacity, or lack thereof. However, the new technology cannot be used without reform of the wholesale energy market. I argue that South Africa can solve much of its energy crisis by building new facilities consisting of battery storage with photovoltaic panels. But this technology is affordable relative to the options consumers are already adopting in significant volumes – diesel generators or small-scale batteries coupled to inverters – as long as it is at large scale and is used for peak power only. The batteries then supply the stored energy into the grid over peak periods.Ĭombining solar with storage makes it more expensive than coal – which still accounts for 80% of South Africa’s electricity generation – when comparing units of energy produced. Batteries are the biggest outlay, accounting for about 40% of the total cost.Ī photovoltaic panel converts solar energy to electricity, which can be used to charge a bank of batteries or supply consumers directly. A solar farm consisting of 50 MW of photovoltaic panels with 240 MWh of storage capacity will cost R2.6 billion. It has raised input costs for producers and retailers, and has triggered a new round of inflation and interest rate increases.Īny solution will obviously incur cost because it will require the adoption of new technologies, such as large-scale grid-connected solar farms that are linked to battery energy storage. The electricity crisis is a barrier to growth, destroys investor confidence and handicaps almost every economic activity. Rolling blackouts are costing South Africa dearly.

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