A quarter of a century of electrification – part one

January 7th, 2014, Published in Articles: Energize

 

by Jac Messerschmidt, Pr. Eng.

“In times of need, vision separates real leaders from the rest” – Anonymous

The slogan “electricity for all” was first used in 1988, and in the same year the first electrification joint venture was created in the Eastern Cape. Over the next twenty-five years, this initiative grew to bring electricity to more than 6-million homes, schools and clinics. Initially, the focus was on the urban townships. Large scale electrification came into its own in the early 1990s when it rolled out into to the rural areas all over the country. Since then, it has become a beacon of light and hope to many and a signpost of progress – but has it achieved its goals?

A remarkable feat has been achieved in South Africa over the last 25 years. In that time, more than 60% of the population gained access to electricity in their homes for the first time. It was an effort of truly gigantic proportions, scope and vision. Yet when it started, few had an inkling of what it could achieve, and now that it has matured, questions naturally arise about its future. In 1987, less than 13-million people in South Africa (not even 40% of the population) had access to electricity in their homes [6]. Most of these were whites and Asians living in the more affluent urban areas supplied by municipal distributors. These municipal undertakings also had the responsibility, but usually not the resources nor the political backing, to provide electricity supplies to large swathes of mainly black or coloured customers as well, most of whom lived in squalid, unsafe and unhealthy dormitory townships and squatter camps. By the 1980s, the supply systems in many townships had deteriorated to a point where access was often no more than theoretical. Further away in the rural areas, the situation was even worse: there was virtually no electricity available at all and in most cases there was little or no incentive for local authorities to improve the situation.

This dysfunctional structure of the electricity supply was a frustration to Eskom, the large utility which generated almost all the electricity in the country and supplied the municipalities, mines, large industries and farmers. Eskom served only 10% of the direct electricity customers in the country. This prevented it from carrying out its ambitious policy of  “electricity for all”, which was articulated on the front cover of its 1987 Annual Report (published in 1988) [6]: “Electricity is a key factor in spurring economic development and improving the quality of life of all our people. Eskom’s aim is to ensure that electricity is affordable and, ultimately, available to all.” Despite the criticism from many quarters [4], the slogan “electricity for all” was soon adopted throughout the electricity supply industry.

From this visionary beginning, the electrification programme spread throughout the country and, championed  by Eskom and some of the municipal undertakings, changed the life of millions of people. It was not an easy road to travel. Politics, for one thing, made things difficult or even dangerous: in the early years, politicians and officials were mainly opposed to electrification, and ways had to be devised around that. When the political climate changed, there was support for large scale electrification, but not necessarily the resources or the capacity to make it happen. In spite of this, near-miracles were achieved, witness to which are the more than 30-million South Africans who gained access to one of the most versatile forms of energy and all its benefits.

An inauspicious start

Apart from a vision of “electricity for all”, there was not much to recommend widespread electrification in the early years. It was deemed uneconomical to electrify poor communities, especially those in rural areas. The capital costs per connection were high and the consumption levels were too low to expect reasonable returns. The first, often hesitant steps in the electrification programme can perhaps be more accurately described as a “re-electrification” phase. It focussed mainly on the large urban townships where the population was increasing but existing systems had deteriorated because the municipalities were unable or reluctant to do anything about it. This hampered growth and expansion of access to electricity, so Eskom adopted a strategy of gaining control in these areas through joint ventures and partnerships. The intention was to grow the revenue base by increasing access and service levels, but many of these efforts ran aground in the political turmoil of the 1980s. They were nevertheless important learning experiences for the much larger programme which was to follow. 

Experience from some electrified urban townships pointed to the fact that access to electricity was a boon in many ways not always realised by those who took it for granted [6]. For instance, the health benefits of using electricity instead of wood or coal are enormous. Food or hot water (or a warm drink) can be prepared without first having to obtain fuel and without having to suffer all the inconveniences, dangers and drudgery of making a fire. And more than fire is needed to produce a cold drink or to keep produce fresh. Perhaps the most important advantage of access to electricity is that it is a powerful driver of economic activity, directly and indirectly. Many enterprises, from the humble corner shop to the enterprising baker, barber, tailor or ice-lolly maker need electricity to make a success of their business. The doctor or nurse needs it in the clinic; the teacher needs it to light up the classroom and to use an overhead projector or run a computer. Without electricity, development can be no more than a dream. The early pioneers of electrification wanted to see this dream come true.

Reconnecting through joint ventures

It was important from the start to drive down costs by accelerating the pace of new connections. Eskom tried to do this by creating joint ventures with local authorities, businesses and communities. The first prototype venture, Kwanolec, was established in late 1988 as the electricity supply authority for the town of Kwanobuhle near Uitenhage in the Eastern Cape. Eskom owned half the shares in the entity and the rest was held by a consortium of members of the Uitenhage branch of the Midlands Chamber of Industries, in which international car maker Volkswagen played a prominent role. The project was in part financed by loans from the Development Bank of Southern Africa [4].

Even though the Cape Provincial Administration intended to adapt the concept to other areas, it proved to not always be a panacea for the ills that bedevilled ill-fated communities. Today, Kwanobuhle is still rife with unemployment and poverty, resulting in widespread misery and resentment. This underlines the fact that electricity is a necessary, though insufficient, requirement for socio-economic development, peace and prosperity. Nevertheless, the switch had been thrown and the demand for access to electricity grew despite the political tumult that roiled the townships in the 1980s. To add to the complexity of the situation, non-payment for electricity became a part of the civil disobedience campaign in the townships. The discredited local authorities operating there, whose service record was already abysmally poor, quickly descended into chaos. Many customers who nominally had access to electricity were cut off for days or even weeks. Meters were not read, bills not sent out, accounts not paid. Following the collapse of the billing system, the reticulation systems itself often collapsed through vandalism and a lack of maintenance.

As the bulk supplier, Eskom was at the receiving end of it all. However, instead of cutting off non-paying townships, the utility tried to take over electricity supplies in these areas itself. For example, it attempted to set up a supply authority in Soweto on the model of Kwanolec, hoping to depoliticise electricity and start power (and the associated income) flowing again. Innovations like flat rate charges and prepayment meters were introduced, but proved too expensive. Despite tremendous effort on the part of many people, the re-electrification of Soweto met with only partial success over the years. Public mistrust and apathy remained high, and even to this day, payment levels remain low despite significant improvement in service levels. In this respect electrification has not lived up to expectations. However, from these hesitant and not always successful beginnings in the industrial heartland of the Eastern Cape and the townships on the Witwatersrand, electrification soon spread its wings to other, more promising ventures. 

Other, more successful ventures like Phambile Nombane in the Western Cape, and Orange Farm south of Johannesburg followed in the 1990s. Several larger cities such as Durban, Cape Town, Pretoria  and Bloemfontein (Botshabelo, Centlec) started their own electrification programmes as Eskom’s focus shifted to rural and semi-rural areas, where access was not a stumbling block and where hundreds of thousands of new customers were eagerly awaiting the benefits of electricity. This also required a shift in thinking and approach, for the new customers were usually poor and it was more difficult to promote the economic advantages of electricity as the main driver of the programme. The conflicting realities of higher initial cost and lower consumption per connection remained a difficult hurdle to overcome.

Driving down costs

Initially it was relatively easy to achieve lower costs as there was a surplus of supply. Lines and transformers were not necessarily fully loaded and the extra electrification demand was relatively light so that it was not a major constraint in the early years. In fact, it helped to improve system load factors. In addition, many technical innovations were introduced to help drive costs down further. Specifications were reviewed and unnecessary onerous  provisions were dropped or replaced. Arial bundle conductors and pole-mounted transformers were used extensively. Although these may be considered to be unsightly, they are much cheaper than underground cables. A new generation of prepayment metering was introduced early on. Instead of coin slots, the meters used tokens, magnetic-strip cards or encrypted numbers and had only a light indicating a healthy supply. These tokens, cards or numbers could be bought in handy denominations at local shops. Prepayment did away with the need to physically read meters and run sophisticated (and costly) billing systems. 

This method is now widely used in modern urban developments as well, thanks to the many innovations and improvements that were introduced as a result of the experience gained during the electrification programme. Another innovation was the “readyboard”. Since many dwellings in rural areas consisted of traditional mud huts and in squatter camps sometimes of no more than a piece of cardboard over a rickety frame, it was impossible to use traditional wiring systems. A readyboard consisted of a sturdy backing of wood, steel or plastic, large enough to accommodate a prepayment meter with an earth-leakage relay, a light and two or three socket outlets. Where the structure of the shack could not even accommodate a readyboard, a steel pole was planted next to the wall, which often became the central support for the entire dwelling. From the readyboard, the home owner was able to run extension cords to lights and appliances throughout the structure. The idea was adopted by many electrification programmes throughout the developing world.

Into the rural areas

From the 1990s, the focus shifted increasingly to the rural areas, in spite of official opposition [11]. Projects of note, in the early roll-out to less developed areas, were Elandskraal [11] and villages under the auspices of the Nebo Democratic Development Committee (NDDC) [16] in the former homeland of Lebowa. Many projects were undertaken in the deep rural areas of Eastern Cape and KwaZulu-Natal, as well as in the former homelands. These projects focussed mainly on new household connections, but increasingly also on small businesses, schools, clinics and farm-worker dwellings. Although not specifically highlighted in the electrification statistics, the electrification of schools and clinics in outlying areas received special attention. By 1999, for instance, over 6200 schools and 140 clinics were electrified, often in remote rural areas [11].

The contribution of electricity to the quality of life became more apparent as the programme matured. In a study published in 1994 [11], it was noted for instance, that levels of noxious gases and smoke were from two to ten times higher than international health standards when wood or coal was used in the home instead of electricity. There was also a notable reduction in fires caused by candles and paraffin lamps. Clinics with access to electricity could  more effectively sterilise utensils and use the sophisticated equipment required for modern medical procedures. Within a few years, electrification had become a significant factor in the changing political landscape in South Africa. By the time the first democratic elections were held, the number of connections had grown by 25% and the electrification programme was off to a flying start. It quickly became almost an “electrification race”, with Eskom achieving over 300 000 new connections in 1995 and municipal undertakings making over 200 000 new connections in 1997, resulting in almost half a million new connections being made in total (Table 1).

New connections

From To Eskom Municipal undertakings Farm workers Total Cumulative total connections Total population 1000s Connections per 1000 of population Percentage households connected
as at Dec 1990 2 998 897
Jan 1991 Dec 1991 31 035 51 435 82 470 3 081 367 36 199 85,1 36
Jan 1992 Dec 1992 145 522 74 335 12 689 232 546 3 313 922 36 992 89,6
Jan 1993 Dec 1993 208 801 107 034 16 074 331 909 3 645 831 37 802 96,4
Jan 1994 Dec 1994 254 385 164 635 16 838 435 858 4 081 689 38 631 105,7
Jan 1995 Dec 1995 313 179 150 454 15 134 478 767 4 560 456 39 477 115,5
Jan 1996 Dec 1996 307 047 137 534 9 414 453 995 5 014 451 40 342 124,3 49
Jan 1997 Dec 1997 274 345 213 768 11 198 499 311 5 513 762 40 584 135,9
Jan 1998 Dec 1998 280 977 136 074 10 375 427 426 5 941 188 41 227 144,1 66,7
Jan 1999 Dec 1999 293 006 144 043 6 241 443 290 6 384 478 42 131 151,5 69,5
Jan 2000 Dec 2000 250 801 139 780 6 438 397 019 6 781 497 43 050 157,5 70,6
Totals 2 359 098 1 319 092 104 401 3 782 591

Table 1: New household electricity connections 1990 – 2000.

Sources: [1, 3, 5, 6, 7, 10, 14, 15].

Expanding access

During the 1990s, over 3,7-million new connections were made, more than doubling the number of households connected since the inception of the programme. Around this time, however, things were changing as most of the “low-hanging fruit” had been picked. From 2001 onwards, the number of connections per year dwindled steadily as the cost per connection rose inexorably. The average consumption of newly electrified customers decreased significantly by the move into poorer, rural settlements, putting additional strains on the programme. Although costs were reduced significantly, it became clear that rural electrification would never be self-funding. It would take a long time before electricity would become affordable to large sectors of the populace because the economic benefits of electrification were not being realised to the extent that it was initially hoped. Taking capital and operating costs into account, for instance, the average household had to use at least 

350 kWh per month for the programme to break even. The reality was that many customers did not even reach 100 kWh.  Today, indigent households receive considerable subsidisation through minimal connection fees and free basic electricity of 50 kWh per month. In spite of that, paid usage is low and meter tampering and illegal connections remain endemic. Consequently, in the mid-1990s electrification became increasingly considered a socio-economic imperative rather than a business proposition. Costs were subsidised by industry itself and later by the fiscus.  Table 1 provides an overview of the scale of these efforts. Not much is said about the benefits, direct and indirect, that electrification brought to so many in the last decade of the previous century despite the perceived failure of the programme to live up to its full potential on that score, especially in the rural areas.

There are gaps in the data, especially in the early years, because the percentage of household connections was not commonly reported before 1998. It was only during a census year that these statistics became available. Before 1991, new electrification connections by Eskom and municipalities alike were not counted separately, merely lumped together as “new consumer connections”. A few years later it was recognised that farm workers’ dwellings could be relatively cheaply electrified because many farm homesteads already had a supply, and were added as an new category. If one takes population growth into account, it is noteworthy that the number of new connections per 1000 people almost doubled at the end of the millennium to just under 160. This equates to just more than six persons per household connection, compared to perhaps three or four in developed countries. 

Very little taxpayer’s money went into this gigantic effort. Only municipal electrification was to some extent subsidised by ratepayers, the rest funded by electricity customers. Eskom paid its own way entirely for its share of the electrification programme, including, in later years, subsidising the municipal  efforts as well through a levy on generation. At the same time, the utility reduced the real price of electricity by 15% between 1994 and  2000 [4]. But the time had come for a new approach. Eskom and the municipalities had been working very much in isolation, largely setting their own goals and targets. This had reached a point where it was felt that the electrification effort needed better integration with the goals of government, and the scene was set for a change.

Part two, to be published in the next edition, will deal with developments as they unfolded in the new millennium…

References

[1] Association of Municipal Electricity Utilities (AMEU): National Electrification Advisory Committee (NEAC) documents, www.ameu.co.za/library/industry-documents/neac Accessed October 2013.

[2] W Barnard: Presentation to the National Electrification Indaba on behalf of INEP, March 2012.

[3] B Bekker, CT Gaunt and A Eberhard: “Uncertainties within South Africa’s goal of universal access to electricity by 2012”, University of Cape Town, 2008.

[4] SR Conradie and LJ Messerschmidt: “A Symphony of Power”, 2000.

[5] Department of Energy: Annual Reports, 2009-2013, www.energy.gov.za Accessed October 2013.

[6] Eskom Annual/Statistical Reports, 1923-2002: http://heritage.eskom.co.za/heritage/main.htm Accessed October 2013.

[7] Eskom Annual/Integrated Reports, 2003-2013: www.eskom.co.za Accessed October 2013.

[8] M Kolisa: Presentation to the National Electrification Indaba on behalf of SALGA, March 2012.

[9] N Magubane: Presentation to the National Electrification Indaba on behalf of DoE, March 2012.

[10] National Energy Regulator of SA (NERSA): Electricity Supply Statistics 1996-2002, www.nersa.org.za Accessed October 2013.

[11] National Electricity Regulator (NER): “Lighting up South Africa” 2003.

[12] A Noah: Presentation at the National Electrification Indaba on behalf of Eskom, March 2012.

[13] Statistics SA: General Household Surveys (GHS) 2002—2012, www.statssa.gov.za Accessed October 2013.

[14] Statistics SA: Mid-year Population Estimates, 1985-2013, www.statssa.gov.za. Accessed October 2013.

[15] Statistics SA: “Changes in standard of living among population groups in South Africa, 1998-2006” www.statssa.gov.za. Accessed October 2013.

[16] P Theron (Ed): Proceedings of the ANC National Meeting on Electrification, Centre for Development Studies, University of the Western Cape, Bellville, 1992.

[17] Parliamentary Monitoring Group: “Integrated National Electrification Programme” briefing by the Department of Energy, 7 Mar 2011. www.pmg.org.za. Accessed October 2013.

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