Johannesburg wants to buy households’ excess solar power

This interview was originally aired on RSG Geldsake (in English). The Afrikaans introduction has been translated into this transcript.

RYK VAN NIEKERK: The Johannesburg Metropolitan Municipality wants to follow in the footsteps of the Cape Town metro and buy excess electricity from households and businesses with rooftop solar panels to feed into the grid.

The households and businesses will thus receive a credit on their electricity accounts. Household customers and small businesses will receive around 85.5c/kWh, and if there are businesses that can provide more than 9kW of electricity they will receive 71c/kWh.

Thami Mathiso is the general manager for revenue management at City Power in Johannesburg, which supplies electricity to the metro. Thami, thank you so much for joining me tonight. This is an interesting development. Just give us a bit of background as to how this initiative would work.

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THAMI MATHISO: Thanks, Ryk. Good evening to you and to your listeners. Yes, the initiative is quite exciting. What City Power is looking at is to have residents who have already installed any form of power generation at their properties to be part of the energy resources of the city. If they generate enough they can sell back their excess energy back to the city.

RYK VAN NIEKERK: Do you know how many households and businesses would have an excess supply of electricity to actually feed back into the metro grid?

THAMI MATHISO: We actually started about three years ago doing voluntary registration of customers who are installing solar panels and other forms of generation for their properties.

Today we’re sitting with 416 customers who have registered.

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We know that there are more, because the process was voluntary. Maybe there are customers who have not registered – but with communications like this we expect more people to come forward.

RYK VAN NIEKERK: How would it work? So you have a household with solar panels on the roof that generate more power than the household uses. How would that process work to get the electricity back into the metro grid?

THAMI MATHISO: How the process will work is that if you’ve got a solar [installation] that generates more than you’re using at your property, you’ll then have your solar [system] feeding back into the system. What we have done is that we are currently investing in what we call ‘bidirectional meters’, meters that can read what the customer is using from the grid and what the customer is sending into the grid.

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So those meters will be able to measure how much the customer has used and how much the customer has sold back to City Power.

When the billing takes place, we should be able to bill a customer for what they’ve used and be able to credit them with what they have sold back into the grid. So literally you can supply your neighbour with electricity.

RYK VAN NIEKERK: Does the household need to buy and install that bidirectional meter, or would the city do that?

THAMI MATHISO: The current process that we have is that the city is currently installing those bidirectional meters for the residents.

So as soon as you apply, if you do not have a smart meter, we’ll be able to replace your old meter and have the smart meter installed at your property once we confirm that your installation or your generating unit is in compliance with the City of Johannesburg [requirements].

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RYK VAN NIEKERK: But would the household have to pay for that?

THAMI MATHISO: No, they won’t have to pay. If you apply we will install it for you as part of us having a meter to your property. You don’t have to pay.

RYK VAN NIEKERK: The tariff that households and small businesses would receive is around 85.5c/kWh. How much do households currently pay for electricity from the metro?

THAMI MATHISO: Our average selling price is currently sitting at around about R2.89/kWh, excluding Vat.

So the benchmark of what we’re paying back is based on Eskom’s peak tariff, plus some form of markup.

The city buys most of its energy from Eskom, and that’s why we are benchmarking the tariff that we’re going to be paying the customer is what we pay Eskom as a supplier.

RYK VAN NIEKERK: So you would pay a household the same as you would to Eskom?

THAMI MATHISO: Yes. What we would do is that, if we buy from the household, [the rate at which we] would have bought from Eskom is the rate we’ll then pay the household.

RYK VAN NIEKERK: Now the big question is when will this initiative kick in?

THAMI MATHISO: What we’ve done is that we’ve already published, as part of our tariffs, the feed-in tariff as part of our tariff promulgation.

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The tariff is actually approved from the 1st of July, but what we’re currently doing is setting up the system.

We are expecting that we may be able to go by September 1, if not earlier.

RYK VAN NIEKERK: The first of September this year?

THAMI MATHISO: Yes, it should be this year. We have a tariff already published, so what we are working on is to make sure that the billing system aligns to [what] we owe the customer.

RYK VAN NIEKERK: The City of Cape Town will actually pay cash for electricity. It doesn’t seem like the Joburg metro would offer cash, but rather credit an electricity account. How much flexibility do you have, for example as City Power, to change the model? And maybe [for] other metros out there that are also working on such projects, can these systems and initiatives differ significantly from each other?

THAMI MATHISO: What we’ve done is [create] a benchmark for some of the entities that have started to implement the feed-in tariff.

I know the City of Cape Town is currently talking about cash, but as we continue – because this is a new model – we expect a lot of changes to take place in the industry, and in that way we should be agile and able to respond to the changes and adapt to whatever is currently there.

But what we are seeing currently is that the only platform that we have currently is to be able to credit the customer, using their bill.

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But as we improve we should be able to do it much better and quicker.

RYK VAN NIEKERK: Would that also apply to prepaid customers?

THAMI MATHISO: What we’ve noticed, Ryk, is that the prepaid customer does not have an account with us. So once you are intending to sell back to the city, we’ll replace the prepaid meter and install a bidirectional meter. With that we should be able to pay you on your bill.

RYK VAN NIEKERK: It’s an interesting initiative. Do you have any indication or expectation of the amount of electricity you could get from these households and businesses?

THAMI MATHISO: What we are currently doing is that from the voluntary registration we’ve quantified about 90 megawatts of installed capacity from these small businesses and some of the residential customers.

And this 90 megawatts would eliminate about one stage [of load shedding] for the City of Johannesburg.

But what we’re saying is that there might be more customers who have not yet registered.

If this happens we should get more customers who are able to sell back into the grid, and maybe avert one or two levels of load shedding in that process.

RYK VAN NIEKERK: Thami, thank you very much for your time tonight. That was Thami Mathiso, GM for revenue management at Johannesburg’s City Power.

You can also listen to this podcast on iono.fm here.

This article originally appeared on Moneyweb and was republished with permission.
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