1. KES – a case study Presented by Vicky Basson
Ladies And Gentlemen, My name is Mkhuseli Faku and today I am going to present a paper on the renewable energy in rural applications.
Presented by Vicky Basson
CEO - KES Energy Services Company

2. KES SHAREHOLDING
15%
50%
35%

3. KES in South Africa
This slide indicates where all our Energy Stores are located.

4. KES - KZN Company began operations in 2001 (tender in 1998).
The project in KZN is funded by the DOE.
Development of project was intermittent due to contractual issues. Areas of installation were Msinga, Maphumulo and Ndwedwe.
In Nov 2009, KES was awarded a new tender for SHS installations in Central KZN - will be completed within the next month. Installation areas include the existing areas and also Nquthu and Umvoti.
At the end of this project there still remains many non-electrified households in our concession areas.
KES submitted a proposal for the remainder of 2012/13 financial year and until 2015 – awaiting feedback.
Total KZN active customers will be at end of current tender.

5. KES – Eastern Cape KES was awarded a tender in 2007.
This project is funded by KfW (German development agency) for a total of +/ households. Concession area is in Eastern Cape specifically DC 13 and DC14.
Total of 7300 customers installed in Eastern Cape to date in the areas of Tsomo and Mount Fletcher
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.
Looking at larger size systems or multiple offerings
Please emphasis current problem with the identification of non-grid areas as current electrification plans indicate there is few areas of non-rid left which is not the reality.

6. Fee for service model
Capital investment – 80% subsidy 20% KES investment
Customer “rents” system for a monthly fee 89 rands per month – 365 days pa
Depending on area monthly tarrif is subsidised by Free Basic Electricity from Local Municipality
FBE policy was 48 rands per month per customer in Funded through EBSST – has never increased and rarely followed (unconditional grant) results in disparities in customer tariffs.
KES has full operational/maintenance contract for systems for 20 yr period
A prepayment meter system is used

7. Solar Home System 55 /65 wp solar panel 3 CFL lights, 1 LED
Each solar home system consists of a panel either 55 Wp in KZN, or 65 Wp in Eastern Cape. Size varies due to solar irridation factor. Four lights – three internal one external, a prepayment meter which also has a cell-phone charger and facilities to plug in either a black and white tv (could be colour if DC) or a radio
Meter and battery enclosure

8. To give you an idea of the remoteness of our houses – here is one of our customers in the Valley of a Thousand hills in Maphumulo. You will not no road access etc….

9. Here is the same house close up.

10. A typical energy store – often not buildings in these areas so we use converter containers. Here you can see KES also answers other energy requirements such as thermal needs through the provision of LPG.

11. Challenges
Institutional delays pose problems to sustainability of project
Financial costs of delay – fixed costs and commitments to SMMEs – increases overall operators investment.
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.
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
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. ,

13. Benefits to the community
KES is a services company - Msinga households already have 10yrs of service
The SHS replaces more expensive and hazordous energy sources.
Exterior lights increase security.
Access to media and education – radio and tv.
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

14. 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”
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
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

15. Electrification Rate 2010 – 75%
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%

16. INEP and Roadmap 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

17. 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.

18. Thank you for your attention
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