The evolution of the electricity sector and the role of innovation

The energy industry, particularly the electricity sector, has undergone exciting developments over the past two centuries. From fulfilling the basic functions of lighting and cooking at the turn of the 19th century, electricity is now the backbone of the world’s economy and a basic societal need.

Thava Govender

In his keynote address at the 2018 Africa Energy Indaba, Thava Govender, Eskom’s group executive for transmission and acting group executive for risk and sustainability said that innovation and technological advancements are changing the way in which electricity is generated and that power utilities need to be able to adapt to these developments while remaining financially and environmentally sustainable.

Speaking on behalf of Eskom and as President of GO15 – an organisation comprising the top 19 very large grid operators in the world which deliver electricity to over half the world’s population and accounts for more than two-thirds of global electricity consumption – said that we are in an exciting era where technological advancements are rapidly changing how we generate, deliver and use energy.

Traditional business models are undergoing transformational change and utilities and energy consumers have to adapt and embrace this new energy world. Energy experts and industry leaders must acknowledge that climate change has a direct impact on the industry and how we do business, he said.

Water availability, which the energy industry is heavily reliant upon, poses a serious challenge to energy security given that energy generation and water make inseparable bedfellows. While water scarcity is a cause for concern, South Africa is still facing a mammoth task and a global social responsibility to comply with the United Nations COP21 Paris Agreement, which South Africa signed on 1 November 2016.

The Agreement is based on three main objectives which are defined within the broader context of sustainable development and poverty eradication. These objectives are to limit the increase in global average temperature to below 2°C from now until the beginning of 2100.

Honouring the Paris Agreement is essential for the achievement of sustainable development goals, which are aligned to South Africa’s National Development Plan (NDP). The NDP seeks to, among other things, unite all South Africans around a common programme to achieve prosperity and equity, promote active citizenry to strengthen development, democracy and accountability, bring about faster economic growth, higher investment and greater labour absorption. It is for this reason that South Africa’s roadmap for climate actions must not only drive the reduction of CO2 emissions and build climate resilience, but also drive sustainable development and poverty eradication.

Sustainable development is a very localised matter defined by a country’s unique circumstances. South Africa drove its economic growth and development on the back of abundant coal resources. While global energy trends envision limiting reliance on coal, South Africa has diverging needs and obligations that need effective management. The absence of a clear energy policy makes it even more difficult to support what is sometimes conflicting objectives. The opportunity to harness South Africa’s national resources for broader societal goals is lost in the current policy vacuum. Electricity generation can be leveraged to achieve localisations of industry, skills development, economic growth and technology development.

According to Govender, Eskom recognises that there is no single technology option that is the answer to meeting sustainable development goals. It needs to strike the right balance in its pursuit of a lower-carbon future, providing universal access to electricity and leveraging electricity supply to achieve the country’s broader goals. It is therefore committed to the principle of no upfront technology exclusion and assessment of all options for meeting the imperatives we have for the sustainable development of our country.

Meanwhile, more than 40% of all the people in the world who are still without access to electricity live in Africa. According to the International Energy Agency (IEA), in more than ten countries in Africa, 75% of the population live without electricity. Apparently, 846-million people in sub-Saharan Africa have no access to a clean energy source for cooking.

The fourth industrial revolution presents a window of opportunity to embrace technology and innovation in the energy sector as technological advancements in renewable energy, distribution, generation, smart grids and other advances are rapidly unfolding.

Advancements such as energy storage, off-grid technologies and control systems, smart grid technologies, renewable, clean coal and nuclear energy all offer potential opportunities for investment and achieving the sustainable development goals, he said.

Opportunities often go hand-in-hand with challenges. One overarching challenge is that while the fourth industrial revolution presents us with opportunities, utilities across the globe face the realities of the death spiral as an immediate threat. This calls for utilities and energy leaders to rethink the approach and double our efforts in overcoming and adapting to these macro changes, Govender added.

This requires the energy sector to engage in honest and unclouded conversations; to strengthen mutual partnerships, mergers and acquisitions to accelerate market penetration and increase agility. International partnerships with entities such as GO15, EPRI, Cigre and the World Energy Council, among others, enable us to engage with leading energy players to advance our individual utility goals. Forums such as the Africa Energy Indaba, in its tenth year of existence, remain a key platform – to dialogue and to realise the dream of an African energy grid.

Africa has spoken about the dream of an interconnected smart Africa grid for more than a decade, he said. Regional power planning and an interconnector has the potential for instantaneous intervention by a regional backbone system operator affording reliable and secure power exchange with significant economic potential. Despite this dream, the sad reality remains that very little progress has been achieved.

Utility reform and refined business models could unleash our full potential and yield extraordinary results for the continent. As a collective, we can further unlock opportunities for volunteer partnerships with sister African pools, namely the Southern Africa Power Pool, West Africa Power Pool, East Africa Power Pool and Central Africa Power Pool, as utilities drive electricity power flows between neighbouring countries.

South Africa is making notable progress in diversifying the country’s energy mix, Govender said. Eskom has welcomed the connection of independent power producers and in so doing it is shaping a new electricity market for the country.

Large-scale renewable generation projects in areas such as wind and solar energy are being connected to the grid. To this end, close to R2,4-billion has been invested in the integration of IPPs to the grid, in support of the Renewable Energy Independent Power Producer Procurement (REIPPP) Programme Bid Windows 1 to 3, resulting in a total of 61 projects out of 70 being successfully commissioned and contributing some 3520 MW to the system. In addition, further renewable and conventional energy sources from IPPs, as determined by the Department of Energy through the Integrated Resource Plan (IRP) will outline further energy diversification.

According to Govender, it is imperative that the energy industry in Africa explores how new ideas can be borne through collaborative networks of research institutions that bring business, utilities and countries together. In this way, we can define a research agenda to address our specific industry needs, to build infrastructure, local skills and capability, and to develop appropriate intellectual property.

We are making notable strides in embracing technology and innovation at organisational level, despite operating in a financially constrained environment. To this end, we are leveraging resources through strategic collaborations with sister SOEs as well as reputable local and international energy organisations and entities.

In addition to keeping abreast of new technological developments as the country’s key energy player, Eskom has intensified its efforts in the Large-Scale Energy Storage technologies space, thereby augmenting its existing programme to include utility scale as well as beyond the meter storage solutions development. Energy storage can unlock significant opportunities, particularly for Africa. Eskom’s research unit has recognised that the future grid will need to incorporate energy storage in significant quantities. As a result, it has established a world-class and first-of-its-kind in Africa large-scale battery testing facility at its Rosherville site, with the objective of measuring the real-time performance of different battery types prior to widespread installation.

In conclusion, Govender said, the real innovation in the energy industry is in our knowledge, collaborations and unrelenting drive to improve people’s lives. It is not technology that will make the big difference, but the way people apply technology on the back of abundant energy, which is critical. Energy security will increasingly involve a diverse energy mix, energy storage, on-and-off-grid solutions, interconnections, information technology, human-driven innovation and the integration of all these elements into an intelligent and adaptive system.

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