By Taru Madangombe, Vice President: Power and Grid for Middle East and Africa at Schneider Electric
22 May 2024,
By hook or by crook is certainly a statement in determination that applies to South Africans. Faced with an almost-insurmountable power provision challenge, we have in the last few years turned into a country with a bona fide prosumer status.
It is a changed energy landscape with households and businesses not only generating their own power, but also contributing to the fight against climate change. In their arsenal, households are for example using existing technologies such as solar rooftop photovoltaic (PV) systems to support in driving down residential emissions.
The Schneider Electric Towards Net-Zero Buildings - a quantitative study shows that residential emissions can be cut by 60 % today, on existing homes by utilising renewable energy, while new homes show a 80% improvement.
However, the prosumer landscape has also led to a conundrum of sorts for municipalities, on the one hand it is undoubtedly alleviating demand on an overtaxed grid, on the other it is impacting the municipal revenue stream traditionally generated from electricity sales.
The reality is as more individuals and businesses embrace self-generation; the revenue generated from electricity sales diminishes. This reduction directly impacts municipalities and the utilities it operates, affecting their ability to fund essential services, infrastructure projects, and maintenance of the energy grid.
The rise of prosumers
Prosumers are engaging in the system, generating their own energy and, in certain instances, also giving back to the grid. Here, municipalities must adapt to these changing behaviours and establish new business models that work with—not against—prosumers.
The growth of distributed energy generation (DERs) and storage technologies, for example, requires a more flexible, intelligent grid capable of managing bidirectional power flows. By adopting a more holistic approach to managing the grid, like offering virtual power plants (VPPs) that aggregate and optimise DER output, utilities can maintain their role as key players in the energy sector.
Along with the new systems of management, utilities will need to develop and offer services that help prosumers manage their energy. That means creating demand response (DR) programmes, energy management services, and integrating DERs to keep the grid solid and dependable.
Also, services like energy storage, microgrid development and energy efficiency consulting can provide an important revenue stream to utilities. By investing in and facilitating the creation of these localised (DERs), municipalities can maintain a role in energy provision while accommodating the growing number of prosumers.
Additionally, by embracing digitisation and closer customer engagement, utilities to develop innovative revenue models tailored to the needs and preferences of prosumers.
Forging partnerships
To realise the above, municipalities can learn from one another, saving on valuable time by using similar blueprints, if you will, to transition and implement best practices.
The City of Cape Town is good example, exploring new revenue models as a result of the prosumer self-generation in the province. The city is investing in infrastructure that supports decentralised energy generation.
Utilities can also collaborate with grid solution providers to address the growing need for load management and energy efficiency. Here, utilities can utilise the necessary technology solutions to shift loads during peak usage periods to maintain stability while facilitating the further adoption of renewable energy sources.
Also, data-driven technology can further utilise renewable energy and DERs. Schneider Electric’s AutoGrid Energy Data Platform provides valuable insights to utilities, allowing them to make better-informed decisions about grid operations and DER deployment
At Schneider Electric, we are committed to helping utilities steer this rapidly changing world of prosumers and make the best of the challenges and opportunities they represent.
