- Organisation profiles

Kwabhaza Energisation Project - South Africa

Prepared by RAPS South Africa for SPARKNET

Project Type

Energisation - Solar Home Systems, appliances and Liquefied Petroleum Gas Distribution

Project Summary

Location

Emzweni Village, KwaBhaza area, KwaZulu Natal
Latitude 28° 33' Longitude 30° 10'
Magisterial District: Msinga
Regional Council: Umzinyathi

The KwaBhaza energisation project is in the province of KwaZulu Natal (KZN) situated deep within the hilly terrain of the KZN midlands. Due to this location beyond the escarpment of the coastal plain, KwaBhaza falls within a fairly arid region and experiences seasonal thundershowers. The village is located about ten kilometres from the nearest existing power line. It is a typical remote rural village. The closest reasonably sized shopping centre is at Tugela Ferry, which is 20 km away, and the nearest urban centre is the small town of Dundee, 87 km away. Pomeroy, also a small rural town about 30 km away, is accessible for some basic necessities.

Key Statistics

Scale: Small scale pilot project
Budget: R 500 000
No. Households - Total Approximately 250
- Targeted 120
Total energy installed in kWp 5.88

Contact Details

Mark Williams Eskom Marketing mark.williams@...
Tel: +27 21 915-2378, Fax: +27 21 915-2066
Chris Hazard Formerly Marketing Services Manager at Eskom cjhazard@...

Replication Potential

There is great potential for this project to be replicated even though this has not been done so far. Despite this, the area falls into the Electricity de France (EDF)/Total concession area, which is a government supported programme aimed at providing about 50 000 solar home systems to remote rural households located in each of the five concession areas. Since the interim agreements with the government were signed in the first quarter of 2002, households' thermal needs have not been addressed yet in the EDF/Total concession, and the kwaBhaza area has not yet been incorporated into the large programme.

Funding

The main sponsors and their roles were:

Eskom - South Africa's national electricity utility. A few divisions of the utility namely; Eskom Strategic Marketing of Bellville, in Cape Town and Megawatt Park and the Non-Grid Electrification regional office were involved in this project. Eskom identified the site, procured SHS products and provided project management, subsidy and interim finance.
Total Oil - A French petroleum company, has a large LPG distribution network in KwaZulu-Natal. They took responsibility for gas cage installation and training on LPG filling procedures.
The Liquefied Petroleum Gas Association of Southern Africa (LPGSA) - This is an industry body representing mainly LPG producers and suppliers, which are mostly large petroleum companies. The LPGSA arranged gas supply, subsidy and interim finance.

Background

In 1997, an energisation steering group was formed by supply-side players involved in energy for development under the leadership of Eskom Marketing and Communication Group. The steering group consisted of a small team from Eskom Strategic Marketing Services and representatives from the Department of Minerals and Energy (DME), REFSA, Eskom's Grid Electrification and Non-grid Electrification departments, the LPGSA as well as representatives of Shell, BP, Total and Afrox oil companies. While these suppliers are generally competitors, they collaborated on this project in order to share programme risks associated with developing new alternatives for rural energy provision, and possibly creating a new market. This approach of providing appliances, energy for thermal applications plus electricity (for lighting and media needs) as a complete package became commonly known as energisation.

The motivations for the cooperation included:

The rural population of South Africa are without any meaningful service infrastructure. This has lead to a constant flow of people into the urban areas, causing overcrowding and the development of many informal settlements. There is an urgent need for economic empowerment of the rural population of South Africa. Access to both electricity and LPG allows opportunities to be exploited for economic and social upliftment.
To extend the existing electricity grid into rural areas is costly due to dispersed population and low usage and hence revenues obtained do not warrant the expenditure.
While the energy market in South Africa consists of some large players, Eskom being just one of them, only grid electricity has carried the main burden of expansion into rural areas. However, the other large energy players have capacity and resources to also have a meaningful role in the upliftment of rural communities.

Project Description

This was the first pilot site for rural community energisation or energy service provision with solar power for lighting and media applications and LPG thermal for thermal applications. Energisation is the supply of a combination of energy carriers or sources to meet the basic energy needs of rural households. The combination of energy sources chosen for the KwaBhaza pilot project is at present restricted to Solar Home Systems (SHS) and Liquefied Petroleum Gas (LPG), and the project included a gas cylinder, and a two-plate stove.

The objectives of the project were to:

Create a demonstration site for subsequent reference in the national roll out of the off-grid electrification programme.
Develop cross cultural community and rural customer consultative processes, communication and education methods.
Facilitate commercial joint ventures for the provision of rural energy schemes by bringing in other major energy suppliers,
Develop rural energy supply, sales and services models;
Formulate and test the concept of Rural Energy Service Companies (RESCO's) and Rural Energy Agents;
Test various economic and financial models for the sustainable commercial provision of energy upliftment;
Benchmark provision of funds for the energization programme and micro financing for household energization packages;
Instigate international research and networking to support the energization project. This would ensure the learning from the experience of others and help in collaboration with other global leaders in the successful provision of modern energy to the third world;
Find solutions to the constraints of rural energisation; and lastly
Gather relevant information for planning and facilitating a national energization or rural energy provision implementation plan for rural South Africa.

Technology

The energisation package consisted of:

SHS - 49Wp solar module, module mounting structure, 2 compact fluorescent lights of 9W, Monochrome DC TV connection and DC-DC converter and a multi-plug for a radio, 12V battery with battery box and charge controller fitted, a 10A regulator, plus 50 m of cabling
LPG/Gas - Two-plate gas stove, two 4,5kg (NO. 10) gas cylinders

Customers had a choice between the Standard Package which consisted of a roof mount solar module mounting structure and a pole mount solar module mounting structure option.

Cost Of Services

Customers paid a deposit of R140 and monthly repayment was R55 for the standard package, to be paid for over a period of 35 months or 65 per month for the pole mount solar module option. The monthly payments add up to R1925 and R2275 respectively over the repayment period. The repayment itself includes the refill of one gas cylinder per month. Additional 4.5 kg gas cylinder refills cost R22.50.

Delivery Structure

A local Emzweni resident, Mr Baba Ndlovu, was appointed as the Energy Agent. The Energy Agent received training in basic business and accounting skills, Solar Home System (SHS) installation and maintenance, and Liquefied Petroleum Gas (LPG) refilling and safety procedures. Four other villagers also received training in the installation and maintenance of SHS and are recruited when needed.

The Energy Agent is responsible for sales, installation and maintenance of SHS, gas sales, repayment collection, some administration of end user loan accounts and bulk payments to the financier of systems. The Energy Agent also collects deposits for new systems and when he receives a sufficient number of applications, he arranges for the delivery of required equipment.

Services Provided

The SHS provides basic electricity for 2 lights, radio and television and LPG caters for water heating, cooking and ironing needs. The option of including a black and white television as part of the package was considered because TV is valued by the community for education and entertainment purposes. Unfortunately, this consideration was not carried out due to the costs involved. When fully charged, the SHS provides a maximum of 240 Wp per day.

Other Service Infrastructure And Needs

Television: KwaBhaza receives a very poor television signal. Households that would like to use televisions have to install satellite dishes. Discussions are underway with the signal authorities to improve the TV signal in the area.

Water Supply: There are 3 boreholes (wells) in the village that are equipped with hand pumps. Currently two of these pumps are not working and the third requires a lot of physical effort for a small amount of water, a possible indication of pump element problems. After reporting the failure of a pump it normally takes a few months before a repair team arrives. If all the pumps fail, residents have to rely on the small stream about a kilometre, down in the valley, from the village.

Telecommunication: A fixed line telephone network passes the village but very few people are connected to it.

Schools electrification: Both the primary and the middle school were solar electrified under the schools electrification programme. Unfortunately these systems were not maintained and theft of components rendered them useless by October 1999. Both schools were initially fitted with 700Wp solar systems. Due to theft, the primary school has lost 1 solar module, 2 batteries and the inverter. The middle school lost 3 solar modules.

Project Status

Installations started in July 1998, and a total of 120 systems have been installed in the villages surrounding Emzweni, at KwaBhaza through this energisation project.

It was anticipated that the project would eventually form part of the EDF/Total concession area, contributing towards the goal of electrifying 50 000 within this concession.

Finance Terms

The KwaBhaza energisation project is a credit and loan assistance scheme with equipment ownership being transferred to the end user upon completion of payment. Eskom has subsidised the energisation package capital cost by R1 700 per household. The end-user pays a R140 deposit and the balance of the loan is payable over 35 and 37 months at 15.6% interest, depending on the equipment ordered. In addition to this amount, customers are charged R22.50 gas refill per month, a maintenance fee of R4.00 per month and a collection fee of R1.50. This brings the cost of the standard package to R55 per month.

Sustainability And Maintenance

The replacement of parts, such as the battery, outside of the product's guarantee period, which is one year, does not form part of the monthly loan repayment. In the unlikely event of battery failure within the loan repayment period an extension of the loan will be considered. An extension of the loan period is also under consideration to help cover future battery replacements.

The fee required and the structure for continued maintenance beyond the SHSs loan repayment has not been finalised. Despite the lack of a well-planned future maintenance programme and the agreement on the associated service-fees, the project has the potential to be sustainable over the longer term if the parties involved make the necessary arrangements during the next year or two.

Project Infrastructure Established

The energy agent conducts his business from home. No separate office space was established. A gas cage was erected 30 meters from the house. Gas bottles are stored and refilled within the cage for safety reasons.

Local Project Personnel

Energy Agent - Full time: Mr Baba Ndlovu 3 technicians working part-time on the project as and when their services are required

Project Management Team

Mark Williams Eskom Marketing mark.williams@...
Tel: +27 21 915-2378, Fax: +27 21 915-2066
Cathy Laing Eskom Marketing Planning Consultant cathy.laing@...
Tel: +27 11 800 4748, Fax: +27 11 800 4190
Chris Hazard Previously Marketing Services Manager at Eskom cjhazard@...

Other Service Providers

Total Gas -Working through its regional distributor, Zama Gas, is responsible for supplying LPG Ithala Bank -Administrated the loan RAPS (Pty) Ltd -Provided SHS technical training for the Energy Agent and assistants (Willemse, 1998) Bruce Kloot -From the Energy and Development Research Centre (EDRC), University of Cape Town Conducted research on the developmental and project initiation aspects of the project as part of his Master of Sciences (MSc) dissertation (Kloot 1998)

Lessons Learnt

Social

End-user acceptability of project process. From a detailed customer survey and market research carried out after installation, the quantitative customer satisfaction rating of the process was excellent, even better than expected.

Uptake of the Energisation package The uptake of the energisation package was influenced by the presence of a television set in the package. Initially a black and white TV was included in the package offered, but due to poor signal quality in the area, this option had to be withdrawn. When the TV was included, almost 100 household expressed interest at the first energy day, but this figure dropped to 40 when the TV option was withdrawn. The inability of the screening system to identify households with little or no signal did not help either, as households who had bad television reception could not be prevented from buying the television package.

End-user perception of service. The post installation research indicated that customers were happy with the service provided. Customers included the better quality lights and cleaner and faster cooking as reasons for their contentment with the service. Customers however wanted improvements in the number of appliances they could use. They also wanted refrigeration and ironing facilities.

Theft. Only one incident of theft - from the households - has been reported since the project's inception. However, the panel was returned through community pressure within 24 hours. Theft, particularly of modules, is a common problem for projects of this nature. However, it is difficult to pinpoint the specific set of circumstances that explain this particular projects success in this regard. There are a couple of inter-related issues that need to be considered. First, the project is fairly well contained, being located in one particular village. This acts as a deterrent against theft and vandalism. Related, the project appears to enjoy considerable community 'buy-in' or sense of ownership which similarly reduced the likelihood of incidences of theft and vandalism.

Economic

Payment history. At least 80% of households are up to date with their loan repayments. None of the households are more than 2 months in arrears. No SHSs have been removed due to non-payment. Incentives were used to encourage payment. These included the introduction of flexible payment systems where, if households do not pay their monthly instalment, then they did not receive "free gas" but could continue to use the PV system.

Technical

DC-DC converters. The initial DC-DC converters used in the programme were of good quality and are still working. However, the SHS product supplied was of low quality resulting in numerous failures, as a result it has been replaced with new systems of higher quality. Lights. The ballast inverters driving the 9W compact fluorescent lamps were also giving problems. This was due to a defective product from the suppliers. This was later replaced. New lights provided, performed better, and new systems were installed with wall switches instead of pull down switches. Furthermore, the systems later installed incorporated three lights instead of two, and the systems have been able to handle the additional load from the third light.

Delivery. Lights returned for replacement or repairs do not come back to KwaBhaza. New customers have to wait approximately 2 months after having paid their connection fee before product is received and ready for installation. This has been due to a transport problem with courier companies or other transport service providers showing reluctance to deliver goods and products to remote areas. This problem was solved by asking these service providers to deliver into Tugela Ferry where the energy agent then collected all the replacements.

LPG. In stark contrast to the SHS related components, the delivery of gas normally takes place a day after receipt of an order.

Ecological/environment

Through the use of LPG by households that have signed up for the energisation project, it is assumed that there has been a reduction in the use of wood in the area. Reduction in the collection and use of wood for household fuel means less trees are cut, which ultimately minimises deforestation and reduces soil erosion. There is also a reduction in indoor air, which may have spill-over benefits of improved health. Smoke from burning wood has been linked to respiratory problems.

By using SHS for lighting, it means there is a reduction in the risk of accidental fires often caused by candles. However, because the number of lights provided for in the project was not sufficient for all households; the use of alternative fuels for lighting was not completely eliminated.

Implementation

There have been a number of valuable lessons learned from this project. Mark Williams from Eskom, lists the following lessons:

Project staff need to take time in consulting with relevant role players and involving them in process
Projects should have multiple choices of systems to cater for a wider range of households in the community. For instance, customers prefer a greater choice in the area of lighting - e.g. some prefer wall switches to the pull-down chords provided initially. Some would also prefer more lights - 4 or 5 lights, and most importantly an outside light for security.
While powering the radio using the PV system may be more economical, it was found that the portability of the radio was important to women at KwaBhaza, but the effect of using the PV system meant that it could not be carried around to the different dwellings forming up a homestead. These women used the radio as a companion and for entertainment.
The Television plays an important part of the package, and when it was withdrawn because of bad reception the number of customers interested in signing up for the system dropped significantly.
To a certain a extent, this programme has been successful in getting role players to think about the whole spectrum of household energy needs and not just lighting and media.
Although the energization package has taken away the need for wood collection, commonly assumed to be a drudgery for women, it has also removed an important status symbol - that of the woman as a provider. In the past the size of the pile of wood outside the door was a visible tribute to the effectiveness of the woman of the household to provide for her family.
The PV system poles need to be of adequate girth and length to avoid being knocked over by cattle, to discourage theft and to be best positioned to obtain maximum sunlight daily, and as long as possible.
Further training of the installers to use efficient wiring routes is essential
It is important to choose better quality equipment because the rural settings require extremely durable equipment. Unfortunately this is not always possible as economics plays an important role in material and equipment acquisition.
An important feature of the package was the flexible payment method, which was designed to take account of the erratic nature of the income in the rural areas. This proved very effective in this project.
Lastly, this energization project showed that when the rural poor are presented with something that meets their needs and that they have had some form of influence on either, conceptualisation or design, they are be prepared to pay for a service.

References/Further Reading

Banks DI, 1988. Off-grid electrification for the poor: constraints and possibilities. Energy & Development Research Centre, University of Cape Town.
Kloot, B, 1998. Deep rural defined: Energization viewed from the grass roots. Domestic use of electrical energy conference, Cape Technikon, Cape Town, 6-8 April, 1998
Rosselli, G, (1998). Energy upliftment solution for rural community. Proc. Conference on Domestic Use of Electrical Energy, 6-8 April 1998,Cape Technikon, Cape Town.
Willemse M. (1998) Solar Home System Technician Training Manual. Prepared for Eskom, South Africa, September 1998
Mark Williams, 2003. Personal correspondence

Pagename: :KwabhazaEnergisationProjectSouthAfrica