Alternative energy supply company Specialized Solar Systems (SSS) is making significant headway in driving the large-scale implementation of its solar-powered distributed direct current microgrids, which incorporate the Internet of Things (IoT) to supply energy to low- income areas in the form of affordable power packages.
The power supply solution was piloted by start-up company Zonke Energy in July and has successfully serviced nine houses in Philippi, a township in Cape Town, for nine months without any problems, providing 100% production and a 100% payment ratio. Following this, SSS was granted all the necessary approvals to proceed with an energisation and e-learning project last month, which will benefit 3 000 households in the Thokoza township, in Johannesburg.
The project is being funded by e-services provider My Power, subsidiary of US-based incubation company Poverty Dignified, which has agreed to finance the electrification of the households upfront, thereby enabling consumers to pay for the investment and services over a reasonable period. In addition, the households will be provided with Internet access, with the funder facilitating the establishment of an e-learning platform that will focus on training in English, mathematics and science.
Balancing the Business Model
SSS director and CEO Jonathan Hodgson explains that, while some governmental policies delineate areas for power supply from State-owned power utility Eskom, there are other policies that enable private businesses to formulate business models that will deliver power at affordable rates to meet the basic needs of people.
In light of this, for the past six years, SSS has been working on implementing a local business model using distributed power solutions to deliver energy to low-income areas, with a view of transferring this on a larger scale to other African countries facing similar energy supply problems.
Key to this endeavour has been balancing the provision of electricity at an affordable cost with a return on investment for suppliers in the distributed power network. “The structure of the business model necessitates a method of power supply that can be distributed at a low cost, but where the capital cost is equal to the potential return on investment while remaining attractive to international investors.”
Taking these factors into account, SSS has developed solar-powered distributed ‘smart’ microgrids, which can operate in three variants: decentralised microgrids, which allow for power to be generated and stored at the point of use; subcentralised microgrids, which allow for power to be generated and stored at a central point and distributed to a small number of houses; and centralised microgrids, which allow for power to be distributed to a larger number of houses.
Hodgson highlights that key to the business model is the need to control overconsumption, which would have a detrimental effect on the business model, owing to its upward influence on the amount of capital required. To address this, SSS has incorporated the IoT in its microgrid solutions, which enables the supplier to monitor customers’ power use according to the package or agreement that has been agreed upon between supplier and customer, and control overuse by remotely activating or deactivating the power supply.
This technology can, moreover, be used to discourage what Hodgson refers to as “bad energy-use habits” – such as powering damaged appliances that draw unnecessarily high amounts of electricity to operate. It is also the first step in introducing wireless local area networks in low-income areas.
Hodgson is confident that returns on the Thokoza project will be good and, once capital is returned, ownership will be transferred to the local small and medium-sized enterprises, making it a vehicle for employment, management and skills development opportunities.
With the proven success of this project, a South Africa-based funding house has further agreed to roll out a national model that will enable individuals to buy a power package that meets his/her energy needs at an affordable price in designated areas.
SSS will also oversee the piloting of the system in other African countries, including Namibia, Botswana and Nigeria. In addition, the company has a range of locally manufactured direct current appliances that are compatible with its power supply solutions.