Pros and cons of industrial alternative energy sources

Globally, increasingly competitive renewables-based generation, especially solar and wind, are rapidly transforming power systems as countries try to meet the deadline for Net Zero levels by 2030. In South Africa, the motivation to get off the grid is driven by blackouts.

Ailing Eskom’s decline in electricity generation capacity comes at a high cost. In 2021 there was a record 37% increase in downtime compared with 2020. The sharp increase is probably because of reduced demand from Covid-19 lockdowns in 2021. However, load-shedding will escalate for the remainder of this year and into 2023, with Eskom planning to spend around R1,2-billion a month on emergency diesel.

The government has implemented plans to increase the national generational capacity with the aid of Independent Power Producers (IPPs). But the projects must battle through the National Energy Regulator South Africa (Nersa’s) volumes of red tape for approval before implementation begins.

Build Africa Energy (BAE) directors Miles Oates, and Nick Weggelaar suggest that sawmillers and manufacturers should investigate the extensive benefits that solar energy holds for their businesses without delay.

BAE has successfully installed photovoltaic systems (PV) at several commercial and industrial complexes, including White River Sawmill and Densa Sawmill in Mpumalanga. BAE’s contracts division, Infoled, does the maintenance of the system.

Infoled’s Nadia Rossouw explained the advantages and disadvantages of four alternative energy systems: diesel generators, battery backup, and grid-tied PV and hybrid systems.

 

Diesel generators

Many businesses have invested in emergency diesel generators to continue operating. However, in addition to the noise and air pollution, ongoing maintenance costs of fuel, and rising fuel costs, this solution has become an unsustainable business expense.

 

Battery backup

Smaller, non-industrial businesses and commercial facilities like shopping malls have opted for battery backup solutions to ensure that critical functions continue operating during grid failures. The systems are more expensive in terms of capacity installed than generators. However, they are quieter to run in an office environment, need less maintenance and no additional fuel, and don’t emit hazardous fumes.

 

Evolving batteries

Lead-acid and lead-crystal batteries last about two years before needing replacement. Rossouw says these technologies are not ideal for industrial settings as their discharge voltages can only supply a low and constant load and not the spikes industrial applications require.

In recent years lithium-ion-phosphate batteries and high-voltage lithium packs have hit the market. The prices have stabilised to the point where there is a real return on investment (ROI) in using this technology during downtime. The expected lifetime of such batteries is also significantly higher than their predecessors, with an expected life cycle of 10 to 15 years.

 

Downside

Rossouw says the downside to using a generator or battery bank as an emergency electricity supply is that it is still more expensive to operate per kWh than buying Eskom power. By only relying on the generator or battery power during grid failures, a business will still increase its overall electricity expenses to compensate for the downtime.

However, where technology allows, the batteries may be used for “peak-shaving” during peak times, and during high-energy spikes, the ROI of batteries exceeds the cost of generators.

 

Grid-tied solar PV

Grid-tied solar PV has been available for more than two decades in the South African market. In recent years, the escalation in electricity costs is making solar financially feasible. In a grid-tied solar PV, electricity is generated during the day, providing the business with electricity at a lower cost over time than Eskom can supply.

A realistic ROI for a grid-tied solar plant is around four to six years. The system should pay for itself more than three times during its lifetime, assuming it was capital expenditure.

The initial outlay is purchased at current value, while the lifetime of a good quality solar system can exceed 20 years. Rossouw explains that solar technology bought at the present value will produce returns based on the future value of Eskom electricity cost.

If Eskom increases of around 13% per annum continue, energy costs may rise to a staggering R8,71/kWh within the next ten years. The solar-plant owner saves energy costs at future value with equipment purchased at current value.

The downside of grid-tied solar PV is that it uses the Eskom grid as its battery because the grid remains the link between generated solar power and the user. When the grid fails during load-shedding, a grid-tied solar system will power down to ensure that solar-generated electricity won’t cause an electrification-hazard downstream.

 

Hybrid supply security

“The future power plant might not be one solution but rather a combination of alternative supplies. These hybrid solutions aim to assist business operations during rolling blackouts while still offering financial returns in the long term,” says Rossouw.

A typical hybrid plant will combine solar generation with backup battery storage and potentially integrate existing diesel generators as a fall-safe for long-term blackouts. This combination of generational capacity means that solar power is generated during the day at a lower price than Eskom energy can be bought. Excess solar energy is stored in the battery bank for potential grid failures during the day or night.

An additional benefit of such a system is that energy cost savings can be obtained by using the battery bank as a power supply to the site during the peak Eskom tariff period, thereby increasing the overall ROI of the system.

 

Long-term investment

Rossouw, Oates and Weggelaar emphasise the long-term nature of investing in hybrid systems and the need for quality technology.

“Developing countries are infamous for being the dumping ground of inferior quality solar inverters and PV panels banned in countries in Europe and elsewhere. It is essential to use providers with a proven track record and a thorough understanding of their product performance and safety when investing in these technologies,” Oates remarks.

“A ‘bakkie-brigade’ installer might offer products at a cheaper cost, but the buyer needs to ensure that the supplier will be able to provide the long-term relationship and deliverables to ensure the longevity and ROI of the system installed.”

Source: Build Africa Energy