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Environmental Goods & Services (EGS) News

SA ponders business spin-offs from solar - 30 September 2008

Source: Engineering News Online
By: Guy Copans
Published: 26 Sep 08 - 10:10

South Africa is in the fortunate position of having one of the best climates in the world. Many South Africans, especially those living in the interior of the country, have become accustomed to monthly stretches of sun-drenched days. In fact, a study by Johannesburg’s City Power shows that, in Gauteng, there are only about 56 days a year when it is not sunny.

It is highly ironic – especially considering the energy crunch that the country is facing – that an obvious alternative source of energy, the sun, has been largely ignored.

But, perhaps, one of the virtues of the prevailing electricity crisis is the fact that it has forced govern- ment, Eskom and the private sector to relook at this obvious source of energy. And one of the lowest-hanging fruits in this regard is emerging as the conversion of electric geysers in South African homes and businesses into solar water heaters (SWHs).

It is reaching a point, in fact, that this process could well spawn a whole new industry in the country.

A NEW INDUSTRY
Chief director of industrial policy at the Department of Trade and Industry (DTI) Nimrod Zalk says that the electricity emergency presents a sizeable new industrial development opportunity for South Africa, with solar water heating a prime example of this.

“We expect the SWH industry to expand exponentially, deepening its value chains and industrial structure. Additional tiers to the value chains can also be created through facets such as a components industry and skills development organisations. The expansion of the local production of SWH components will also reduce pressure on South Africa’s balance of payments, as imports are substituted.”

This, he says, could put South Africa into an export position in the Southern African Development Community region, which is also experiencing an electricity shortage. Another potential economic benefit for South Africa, he notes, will be a reduction in the cost of SWHs for consumers as the industry achieves economies of scale.

State-owned power utility Eskom GM: distribution Andrew Etzinger says that there is vast untapped potential in the SWH industry, and the training of new SWH installers would amount to thousands of permanent jobs, and the creation of a new industry.

At the moment, small manufacturers and installers are involved in the SWH industry in the country, with only about 10 000 systems being installed a year. Etzinger says that Eskom wants that number to climb to over 200 000 systems a year, which would be “a massive change”. It also wants to stimulate the SWH industry to be able to manufacture and install the heaters, with installation the biggest bottle- neck at the moment.

“If the country could achieve a mass roll-out of SWHs, it would go a long way towards stabilising the electricity grid, which allocates quite a disproportionately high amount of power to electric water heating,” he says.

Johannesburg City Power MD Silas Zimu concurs that SWHs could create a new industry in South Africa, providing sustainable jobs. However, he says that the country must ensure that the jobs are localised, with maintenance people from local communities monitoring the running and efficiency of the SWHs, while the manufacturing does not have to necessarily be in South Africa, although City Power is pushing for that as well.

Zimu says that City Power plans to install SWHs in all the households in Johannesburg before 2010. It will introduce a SWH tariff, which will reduce the monthly rate of heating water from R200 to R150.

He adds that it should be issuing a request for proposals soon, for both funding and technology, with the intention of awarding the tender to several suppliers, as one supplier cannot adequately supply what City Power wants in the timeframe that it has set.

“We are sending out a request for proposals, because I do not believe that my solution is the best. My analysis is that the biggest suppliers can manufacture 400 000 SWHs a year, but they already have contracts with other countries, and are, therefore, stretched.

”Fewer than 20 people in Johannesburg, which was expected to be leading in gaining access to subsidies, have applied for the Eskom subsidy so far. However, Zimu believes that once Johannesburg has installed SWHs, one will see the whole country following through, and possibly the whole of Africa.

Zimu insists that the SWH programme be black-empowered, with the assembly, at least, taking place in South Africa.

“We are busy, at the moment, working on formulas on how it can be funded. We want to save at least 600 MW, the equivalent of a power station.”

Zalk maintains that solar water heating has proved to be a profit- able industry, with most installers having full order books. He says that the DTI expects the market to grow, which will create more volume demand, and more opportunities for firms. He adds that with the expected increase in demand and the number of operators, productivity is expected to increase as well.

Panels, called solar collectors, are mounted on the roof of a home, where they will receive direct sunlight. They are designed to heat up quickly, and, in turn, heat up water, either through a direct system, where the water is heated by passing through a collector, or through an indirect system, where the heat is transferred to a separate container, where the water is heated. The hot water is then stored in a geyser.

Etzinger says that, for SWHs to work adequately, one would need a roof with northern orientation to get the best results. He says that households that are using alternative sources of electricity will not be targeted as much as households using conventional sources of electricity. He notes that there will be instances where an SWH will not be the best solution for a particular household.

Zimu says that SWHs work even on cloudy days, with the rays of the sun breaking through the clouds with sufficient intensity to heat up a SWH system. However, the water heated by a SWH might be less warm on a cloudy day.

He says that ‘smart technology’, which is technology designed to fit demand-side management (DSM) purposes, will need to be used to ensure that a SWH does not heat water beyond 20°C. Further, he says, the moment that conventional electricity kicks in, one needs to measure it so that customers can be billed correctly.

Etzinger says that converting electric geysers into SWHs is an established practice. A team of SWH installers typically consists of three to four people that perform two to three installations a day. They come to a home, and within a couple of hours, would have removed the electric geyser, and completed the necessary plumbing and changes to the electrics.

The conversion team will comprise a plumber and an electrician. A certificate of compliance is required after one has changed the electrics, as there is an electrical element in SWHs that Eskom recommends so that, on a cloudy day, one still gets hot water.

LEGAL PROCESSES UNDER WAY TO REGULATE SWHs?
Eskom is offering a rebate to customers who install SWHs through an Eskom-accredited and South African Bureau of Standards- (SABS-) approved supplier.

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