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SADC energy crisis – demand management key to addressing shortages

September 2014

The current energy shortages being experienced by most countries in southern Africa could be addressed by a variety of measures including building new power generation stations.

However, another critical measure that the Southern African Development Community (SADC) is actively pursuing to halt the power shortages that date as far back as 2006 is to reduce the demand for energy in the region by managing the existing energy load.

This option commonly referred to as Demand Side Management (DSM) could effectively allow SADC to address its energy challenges in the short-term, while mobilizing resources to develop new power generation projects that will add more energy on the regional grid.

In this regard, the 34th SADC Summit held in the resort town of Victoria Falls, Zimbabwe urged Member States to “provide the necessary policy support to implement the Demand Side Management programme, including banning of incandescent light bulbs.”

The DSM programme was initiated a few years ago by the Southern African Power Pool (SAPP) to ensure that the region is able to manage its energy situation.

SAPP is a regional body that coordinates the planning, generation, transmission and marketing of electricity on behalf of Member State utilities in SADC.

The power utilities in mainland SADC Member States, with the exception of Angola, Malawi and the United Republic of Tanzania, are interconnected through SAPP, allowing them to sell electricity to one another through a competitive market.

As part of the DSM programme, at least four initiatives have been identified to ensure that the region is able to manage its existing energy load.

These are the introduction of Compact Florescent Lamps (CFLs), Commercial Lighting (CL), Hot Water Load Control (HWLC) and Solar Water Heaters (SWH).

For example, switching from traditional light bulbs to CFLs and CL have been effective in most SADC countries as they have significantly reduced energy use at home and prevented greenhouse gas emissions that contribute to climate change.

Research shows that residential lighting accounts for about 20 percent of the average domestic electricity bill in the SADC region.

However, compared to incandescent bulbs, CFLs have been shown to save up to 80 percent of the electricity consumption.

SWHs also have the capacity to ensure the availability of energy in the region, as the use of solar will conserve other forms of power such hydro and thermal, which are commonly used in the region.

Available data shows that most of the power used in residential areas is consumed by water heaters, placing a huge strain on traditional power sources.

Similarly, the HWLC programme being pursued by SAPP has enabled consumers to install load control switches that automatically turn off power during peak periods or when appliances such as geysers have reached its maximum demand.

South Africa’s Eskom and Botswana Power Corporation have reported savings of 130 megawatts (MW) and 40MW, respectively, from the HWLC programme.

According to the 34th SADC Summit Brochure released at the SADC Heads of State and Government Summit held on 17-18 August, southern Africa has made cumulative savings of about 4,561MW from DSM programmes between 2009 and 2013.

The bulk of the savings, totaling about 3,461MW, emanated from the CFLs programme. The commercial lighting programme contributed savings of 700MW.

It is envisaged that the SADC region will save more than 6,000MW by 2018 if such initiatives are implemented according to plan.

It is envisaged that the DSM programme will include a public education campaign whose primary objective will be to increase awareness about energy efficiency.

Other measures being considered include the use of cost-reflective tariffs, time of use tariffs, renewable energy feed-in tariffs as well as introduction of penalties for inefficiency use of energy by customers.

Cost-reflective tariffs encourage people to move their electricity consumption from peak times to off-peak periods by adjusting the price charged at certain times of each day. This helps reduce the overall peak load and is referred to as load shifting, a common practice in many parts of the world.

Related to cost-reflective tariffs is the time-of-use pricing concept whereby electricity prices are set for a specific time period on an advance or forward basis, usually not changing more than twice a year.

Prices paid for energy consumed during these periods are pre-established and known to consumers in advance, allowing them to vary their usage in response to such prices and manage their energy costs by shifting usage to lower cost periods or reducing their overall consumption.

Renewable energy feed-in tariffs have been successful in increasing the use of renewable technologies worldwide. They encourage investment in renewable energy generation by offering long-term contracts to producers and guaranteeing to buy and pay for all the electricity produced.

Feed-in tariffs have proven successful in Germany and other European countries like Denmark and Spain, where they are credited with the much greater adoption of wind and solar power there than in the United States.

There is, therefore, need to embrace the principle of energy efficiency in SADC and adopt regulatory principles that incentivise efficient use of electricity and penalise wasteful usage.