Nelson Mandela Bay Municipality leads in embedded energy generation

JULY 21, 2015

Small-scale embedded power offers viable solution to energy crisis  

Small-scale embedded energy generation has real potential to ease South Africa’s electricity crisis, and to assist private businesses and consumers with the significant challenges they face with load shedding and rocketing tariffs, while contributing to much needed local economic development.

Elana Keef, sustainability planner at AfriCoast Energy, said the Nelson Mandela Bay Municipality had emerged as a national leader in embedded energy generation.

“The Municipality is at the forefront of pioneering a new model of energy security in South Africa through private sector investment in small-scale renewable energy generation in the city.  Companies and individuals are moving towards small-scale embedded generation as a viable way in which to offset their own electricity costs, lessen the burden on the national grid and make the transition towards sustainable business practices,” she said.

In 2012, following the success of a small-scale wind and solar energy generation pilot project spearheaded by the Nelson Mandela Bay Municipality, the National Energy Regulator of South Africa (NERSA) approved conditions that allow the connection of generation units less than 100 kW in size directly into electricity grids.

Keef says investment in this kind of energy generation within Nelson Mandela Bay is largely as a result of the Municipality’s drive towards a low carbon urban future, economic and socio-economic development, and improved energy security through the diversification of the local energy mix.

“From the outset, the Municipality has adopted a longer term perspective and focused on the contribution that small-scale embedded generation can make towards economic growth, energy security and the challenges of inequality, unemployment and poverty, as opposed to the potential revenue loss due to decreased electricity sales.

“The benefits of small-scale embedded generation include additional generation capacity, potential for increased grid stability, and the mobilization of private investment with broader participation.”

To date, there have been more than 60 private connections within Nelson Mandela Bay.

The transition towards a low carbon future is further facilitated by a 15-year wheeling agreement between the Nelson Mandela Bay Municipality and Amatola Green Power (AGP), the first private sector energy trader licensed by NERSA to buy and sell renewable energy in South Africa. AfriCoast Energy assisted AGP in facilitating the successful agreement. Nelson Mandela Bay is currently the only city in South Africa where such an agreement exists.

“AGP operates independently of Eskom and from local municipalities,” Keef explains.

“The company trades in clean energy by connecting willing buyers to willing sellers. AGP is therefore not limited to the Eskom price of electricity. As a trading platform, it enables a generator to size its system according to peak winter demand, the most expensive electricity, knowing that any excess electricity generated during off-peak and summer times can be sold through AGP to mitigate any potential loss on a renewable energy investment.”

Besides contributing to sustainable business practices, Keef says, small-small embedded generation is also an important step in growing the green economy in Nelson Mandela Bay and the province through, amongst others, localization of energy services companies and component manufacturers, and the simultaneous creation of much needed job and associated skills development opportunities.

“Within Nelson Mandela Bay, as with the wider region, there is great potential for development, but our energy and water resources are limited. AfriCoast Energy aims to play an important role in establishing the region as a renewable energy hub, and assisting companies with the design of sustainable energy systems and models.”