Transcript Kes energy services company

Presented by Vicky Basson
CEO - KES Energy Services Company
KES SHAREHOLDING
15%
50%
35%
KES in South Africa
KES - KZN
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Company began operations in 2001 (tender in 1998).
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The project in KZN is funded by the DOE.
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Development of project was intermittent due to contractual issues.
Areas of installation were Msinga, Maphumulo and Ndwedwe.
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In Nov 2009, KES was awarded a new tender for 10000 SHS
installations in Central KZN - will be completed within the next
month. Installation areas include the existing areas and also Nquthu
and Umvoti.
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At the end of this project there still remains many non-electrified
households in our concession areas.
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KES submitted a proposal for the remainder of 2012/13 financial
year and until 2015 – awaiting feedback.
KES – Eastern Cape
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KES was awarded a tender in 2007.
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This project is funded by KfW (German development agency) for
a total of +/- 30000 households. Concession area is in Eastern
Cape specifically DC 13 and DC14.
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Total of 7300 customers installed in Eastern Cape to date in the
areas of Tsomo and Mount Fletcher
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Currently we need to identify new areas as soon as possible. KES
needs clarification from the role players for the grid roll-out and
subsequently the identification of non-grid areas.
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Looking at larger size systems or multiple offerings
Fee for service model
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Capital investment – 80% subsidy 20% KES investment
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Customer “rents” system for a monthly fee 89 rands per month –
365 days pa
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Depending on area monthly tarrif is subsidised by Free Basic
Electricity from Local Municipality
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FBE policy was 48 rands per month per customer in 2004. Funded
through EBSST – has never increased and rarely followed
(unconditional grant) results in disparities in customer tariffs.
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KES has full operational/maintenance contract for systems for 20 yr
period
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A prepayment meter system is used
Solar Home System
55 /65 wp solar panel
3 CFL lights, 1 LED
Meter and
battery
enclosure
Challenges
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Institutional delays pose problems to sustainability of project
 Financial costs of delay – fixed costs and commitments to SMMEs – increases
overall operators investment.
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Sustainability
 Current model implies customer tariff should cover payback of investment, life-
time replacement costs (batteries), maintenance costs – all which are bourne
by the operators. In reality, it cannot.
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Payment issues
 All operators experience low and continued decreasing collection rate which
impacts upon the sustainability of the model.
 Affordability of the monthly fee is a large contributor to non payment
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Operational Challenges
 Difficult Terrain, theft of systems and tampering all increase costs. There is a need
for the system to evolve to balance demand and supply issues whilst always
considering affordability.
,
Benefits to the community
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KES is a services company - Msinga households already have 10yrs
of service
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The SHS replaces more expensive and hazordous energy sources.
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Exterior lights increase security.
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Access to media and education – radio and tv.
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JOB Creation – directly 91 permanent jobs created by KES and 6
BEE SMME Subcontractors appointed employing 100 people. This
excludes all indirect jobs.
Energy stores used to introduce other modern, safe forms of
energy for thermal needs such as LPG, efficient wood burning
stoves
98 MWh per month of green energy
In rural areas less expensive than grid connections and quicker to
roll-out
In line with the government’s strategic plan
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Electricity access is the cornerstone to social upliftment
Jobs – Create 5 million
new jobs by 2020,
-KES, suppliers and households
- 5% of newly connected households are able to do
additional, income-generating work, adding on average
of R175 per month to the household
Quality Basic Education
87% of newly connected households indicate a positive
educational impact, with average learning times
increasing by 1 hour 40 minutes per week
Health
Reduction of smoke inhalation, fire risks
Housing – “Sustainable
human settlements and
improved quality of
household life”
▪
Crime - “All people in
South Africa are and feel
safe”
Exterior lights - About 62% of newly connected
households are of the view that electrification has
benefited their community; of these, 42% mentioned
improved security and safety3
▪
Newly installed SHS save households on average
between R81 and R188 per month2
Benefits are primarily driven by savings in lighting
costs (68%) and cellphone charging costs (18%)2
Universal Access
 Between 1996 and 2010, 5 million households electrified
 In 2012, 3.4 million still unelectrified
 Currently electrification rate is 150k-200k pa.
 Unless rate increased = 20 years
Electrification Rate
2010 – 75%
INEP and Roadmap
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DOE held Energy Indaba in 2012
Working Groups and steering committee set up with all role-players
to review all aspects of electrification including:
 Access
 Funding
 Planning and Delivery
Roadmap to be presented to Minister and Cabinet for approval
Goal is for universal access, using best mix of solutions including a
dignified level of service for all.
KES looks forward to a clear framework for business development
KES and KZN Municipalities
KES has the concession for DC22, DC23,
DC24 and DC29
 Municipality identifies non-grid areas to
DOE, DOE fund it
 KES enters into Service Level Agreement
 FBE crucial to ensure affordable by your
communities.
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Conclusion
KES has been in operation for more than a decade supplying electricity to
the deep rural areas of South Africa.
However, there are challenges to the sustainability of the project that need
to be addressed.
There is a role for non-grid electrification in South Africa to obtain
universal access.
KES is a public private partnership, and looks forward to
continuing its role of bringing energy to the rural
communities.
Thank you for your attention