Eskom’s new microgrid plan

Power utility Eskom rolled out only a fifth of the microgrids it planned to launch by the end of its last financial year, but it is substantially increasing the capacity of some of the new systems.

Microgrids are small-scale containerised systems with generation and distribution equipment that can be deployed in unelectrified communities at a fraction of the cost of powering them via the national grid.

They are typically powered with a few dozen solar panels and substantial battery storage for dispatching energy during the night or periods without enough sunshine.

Eskom announced the launch of three microgrids in 2024 — in Ficksburg, Lynedoch, and Swartkop dam — and said it planned to roll out 100 across the country by the end of March 2024.

These microgrids form part of the multi-billion-dollar Just Energy Transition (JET) project, which aims to transition South Africa to more renewables while ensuring poorer communities also benefit.

Eskom told MyBroadband it had installed 20 microgrids to date, just 20% of what it had planned in its previous financial year.

The power utility said the goal up to March 2025 was to install an additional 33 microgrids of various sizes based on load requirements.

The utility has halved its microgrid target while also doubling the rollout period. It did not provide a reason for this change.

A microgrid installation with solar panels, batteries, security fencing, and security cameras

Eskom’s current containerised microgrids comprise 32kW or 40kW plants, but it is manufacturing much larger ones with capacities of approximately 150kW.

Together, the new microgrids will electrify 440 households.

The power utility said the approximate cost of each microgrid was R1.5 million and that funding was being provided by the Department of Mineral Resources and Energy (DMRE) and Eskom.

Eskom did not specify exactly how much capacity R1.5 million could create, so it is difficult to determine a precise per-kWp cost.

For 32kW and 40kW microgrids, the effective cost per kW of capacity would be R46,875 and R37,500.

While this might sound like a lot compared with the initial cost of capacity on a coal station, it is substantially cheaper than extending its transmission capabilities to serve customers in remote areas.

For example, with the community in Swartkopdam, Eskom would have needed to spend R250 million on a 200km 132kV line from Gordonia substation and a new substantiation at Noenieput.

Eskom would be able to recoup the cost of the microgrid over a much shorter time.

Even if the 39 households using the microgrid in Swartkopdam used a modest 200kWh of electricity at a discounted average tariff of R2 per kWh, they would pay Eskom about R15,600 per month or R187,200 per year.

On that basis, the microgrid would have paid for itself in eight years.

Eskom has also proposed microgrids as a solution for nature conservation facilities like those run by SANParks and provincial parks boards.

“Not only may these sites be remote, but overhead power lines built in conservation areas are prone to damage by mammals and then cause an electrocution hazard to wildlife,” Eskom said.

“Using a renewable, clean energy with backup just makes sense in pristine nature conservancy areas.”

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Eskom’s new microgrid plan