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Embedded generation: growing Durban’s ‘prosumer’ market

The city of Durban is waiting approval from Nersa for its bi-directional tariff scheme for embedded generation

In South Africa, Durban’s eThekwini municipality launched a rooftop solar PV project this week in a bid to promote panels on homes, factories and office blocks. 

The Durban Solar City framework project is an attempt by city officials to wean the city off base-load power and onto power generated from solar energy, reports property website iol Property.

As part of the project, eThekwini municipality has submitted a proposal to the National Energy Regulator of South Africa (Nersa) to introduce a new residential embedded-generation tariff scheme that will allow residents to sell excess generated power back to the municipality.

However IOL Property claims in its report that should the proposal be approved, residents will receive a lower fee for their power compared with the power tariffs charged by the city.

According to the property website: “The Durban residential tariffs charged by the city would be roughly ZAR1.15/kWh, whereas residents would only be paid about ZAR0.75c/kWh of power sold to the city (and they would still have to pay a fixed electricity service charge of ZAR100 a month if they used less than 300kWh a month). Electricity officials say 320,000 Durban residential customers use about 700kWh of power a month in an average suburban home.”

Bi-directional tariff scheme

Despite the high costs attributed to the installation of solar PV panels and the high operating costs of small-scale home generators, city officials claim that the pay-back scheme will offer residents the opportunity to start reducing the costs of home power once the initial installation costs were paid.

Senior eThekwini electricity engineer Sanjeeth Sewchurran claims that should NERSA approve the proposal, Durban could become the first region in South Africa to introduce the bi-directional tariff scheme.

“The scheme would also require the fitting of bi-directional meters to measure the flow of electricity produced or consumed by homes, factories and office blocks. It also creates the potential for some electricity consumers to become ‘prosumers’ by producing and selling electricity back to the local and national grids,” iol Property reported.

Municipalities are concerned about the drop in revenue should this scheme be approved.

Jonathan Curren of the Camco Clean Energy consultancy, which is assisting the eThekwini Energy Office, said that Nersa is expected to give a response to municipal concerns later this year.

Curren commented: “Profit on electricity sales is significant. One of the main issues is the loss of revenue to maintain the municipal distribution network. In the worst-case scenario, the municipality has no customers left in 10 years and is left sitting on stranded infrastructure … So sources of new subsidies for lost revenue will be crucial.”

Feasibility of solar PV installations

eThekwini has created an online Durban Solar Map to assist factories, shopping malls, offices and residential homeowners assess the financial pros and cons of new solar PV installations.

Residents can type in their address, zoom in to see their homes and offices and then calculate the size, output and cost of fitting solar panels to their roofs,

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.