Municipal electrical utilities face mounting challenges

Municipal electrical utilities, the distributors of electricity to many, if not most, of the country’s electricity consumers, face mounting challenges as technological developments change the way in which electricity will be generated, distributed, sold and possibly resold in the future.

Refilwe Mokgosi

The rising cost of electricity is likely to result in further reductions in demand, either through self-generation or further advances in energy-efficiency, or both. This will reduce the revenue paid to municipal utilities which remain responsible for keeping the distribution networks running.

As I start the new year as only the second female president of the Association of Municipal Electricity Utilities (AMEU), I am reminded how I became involved in AMEU activities. I was introduced to this association and nominated by Hannes Roos, from Ekurhuleni, under the stewardship of Mark Wilson, the head of the energy department, to represent the Highveld branch as a female rep at the AMEU executive council.

Four years later, I was nominated to be the vice president elect by the previous president Sicelo Xulu. Immediately, the council nominated me to lead the Women in Electricity (WiE) programme.

The responsibility of presiding over this association lies heavily upon me as I am aware that I take on this responsibility during a period in which the sector is facing some significant challenges:

  • The rising municipal debt especially debt owing to Eskom.
  • The rising cost of electricity.
  • The evolving business models for utilities to ensure survival.
  • The view that the current sale of kWh business model is dead.
  • The need to incorporate renewables into municipality power grids.
  • Challenges faced by municipalities with regard to revenue collection, overall funding and being under-capacitated.
  • The relationship between Eskom and municipalities, and the need to have service delivery agreements (SDAs) in place.
  • Ageing infrastructure.
  • The impact of the fourth industrial revolution on utilities.

The gap between the first industrial revolution and second industrial revolution was about 100 years or so. The transition between the third industrial revolution and fourth industrial revolution is only about ten years.

The history of technology, from 1804 with the invention of the steam locomotive, to the modern age of cars, microwave ovens, computers, the internet and cellphones shows how much has happened in the last 214 years.

Technology has transformed our lives to the extent that we unable to imagine life without even the simplest examples. Nonetheless, as exciting as these past revolutions have been, they brought along with them their own challenges, including pollution and global warming.

We are now in the early stages of a new era, dubbed the fourth industrial revolution. In retrospect, all past revolutions appear like dress-rehearsals to the main event.

The fourth industrial revolution is changing how we live, work, and communicate. It is reshaping government, education, healthcare, commerce and almost every aspect of life. In the future, it can change the things we value and the way we value them.

As we start a new year, I have some questions for you to ponder:

  • Is the electricity supply industry ready for the energy revolution and its impact?
  • Will the market respond quickly enough? The biggest risk involves not moving fast enough to seize new opportunities and adopt new hyper-automated processes.
  • Is the industry turning a blind eye to issues such as cybersecurity? According to experts, data is now the new gold and so we will see a spike in data theft, site hijacking, etc.
  • We have thousands of engineering students currently at universities. Will these students be employable in the next five years?
  • Do you think we are training and educating future employees in line the fourth industrial revolution?

During the period of my presidency of the AMEU I hope to see the sector and this association advancing in technology and investing in research and innovation.

I would also like to see the AMEU, together with its chosen partners, play a critical role in addressing municipal challenges, especially embarking on initiatives and programmes which will ensure the continued and sustained financial viability of all utilities. Since we all know how crucial it is for the sector to accommodate females within industry, I will therefore remain interested in the subject of women empowerment through the AMEU’s WiE programme. The AMEU must face the impact of the fourth industrial revolution effectively and efficiently, with programmes which will assist government and the education system to align with the future.

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