Rapid urbanisation, demographic and social change, climate change and resource scarcity, technological breakthroughs in the energy sector, and economic shifts are major disruptors in South Africa’s energy and social structures. The fourth industrial revolution is likely to introduce disruptive elements to every aspects of our lives. The generation, distribution and sale of electricity will not escape the effect emerging technologies will introduce and municipal electricity utilities need to be prepared for this.
A panel discussion was held at the recent AMEU Convention on this topic. The panelists were: Dr Willie de Beer (chair); Jonathan Cawood, PWC; Christopher Forlee, Nersa; Xolile George, SALGA; Nelisiwe Magubane, Eskom; Polelo Mphahlele, City of Tshwane; Ayanda Noah, Eskom; Prof. Daniel Plaatjies, Finance and Fiscal Commission.
Energy has always played an important role in all industrial revolutions. It started by moving from animal power to steam power, which then moved to electric power. The digital computer age introduced the third revolution, while the age of artificial intelligence enables higher levels of automation, data processing and robotics.
Utilities are likely to see fewer large-scale generation projects as flexible small-scale embedded generation becomes popular. This will require higher levels of investment in distribution networks to make sure they are flexible enough to cope with sudden changes in load and supply.
The industry should use technology to get visibility and control to improve customer service and reduce non-technical losses. Utilities should use modern technology to improve customer service: drones can monitor transformers and sell drone monitoring services. “Data is the new oil,” Xolile George said.
People should appreciate the value of data. New technology can gather and analyse data and provide utilities with trends which can be modelled to help them to make more informed decisions in their planning. It can also assist in the maximisation of revenue collection. “There are two worlds in SA: the haves and have-nots,” said Prof. Daniel Plaatjies. New technology should be used to bridge the gap between the education and material advantages enjoyed by the haves, to upskill the have-nots.
New technology, if used incorrectly, will entrench poverty. Public investment in technological innovation must serve the entire population, Prof. Plaatjies said. Utilities may have to rethink the way the distribution systems are managed, but they should be willing to challenge the status quo. Ayanda Noah reminded the conference not to lose sight of the fact that the electric supply industry exists to serve the public.
Smart meter rollouts may suit the utility, but not necessarily the users of electric power. This calls for a mind-shift to solve customer problems and prevent the fourth industrial revolution from becoming nothing more than a pipe dream which is unable to deliver the expected results. While certain municipalities may be gearing up to benefit from the fourth industrial revolution, Polelo Mphahlele said, the changes are not spoken about enough.
Employees need to be reskilled to ensure that they can continue to add value as technology makes jobs change, she said. It may be necessary for national government to take a lead in getting the municipalities right, she said, adding that the municipalities will not be fit enough to cope with the challenges the fourth industrial revolution will bring until they get the basics right.
Jonathan Cawood said that international research shows that most municipal utilities in most countries are concerned about the main challenges which accompanies the fourth industrial revolution: decarbonisation, decentralisation and digitalisation. To meet these challenges, municipal utilities cannot continue doing things in the same way and change is often difficult. While there are some pockets of excellence, he said, most utilities are struggling to change their way of working.
Decarbonisation means using cleaner generation technologies such as wind, solar and hydro together with some form of storage or gas-fired (rather than diesel-powered) peakers. The idea of decentralisation too relates to rooftop solar PV systems feeding into electric distribution grids which were designed to carry power from a central point to multiple points of load and have always been operated in this way. The idea of multiple points of supply and multiple points of load is often a serious challenge to municipal utilities. At the same time, digitalisation, adds new ways of doing things which municipal employees can find daunting.
The panel wrapped up their discussion by saying that we must rethink the municipal utility of the future. They will need to focus on putting their customers ahead of their processes – processes must be designed to offer excellent customer service. This means that even with the rollout of a digitalisation programme, municipalities should invest in human capital – training – and modernising their infrastructure to accommodate new technologies and systems.
Regulation and legislation should support and encourage the use of electricity by the public and should be used to protect users rather than limit them. Society needs to be free to use modern technologies, such as solar PV, safely, but without having to comply with complicated rules and regulations. Xolile George said that work is being done to define the extent to which the introduction of the fourth industrial revolution will affect municipal utilities’ workstreams and how it can be commercialised to assist to bolster a municipality’s finances.
The study will also consider what impact the fourth industrial revolution will have on employment figures and the types of work human beings will do in the future. The new revolution will, no doubt, have an effect on how new infrastructure will be designed and what changes might be necessary to existing infrastructure. The municipal utility business model may need to change, but, according to Magubane, South Africa has the intellectual capital to make the changes necessary for the fourth industrial revolution to benefit the country.
To enhance that capital further, she said, more training and education will be needed to encourage and support innovation at municipal utilities. In closing, Chris Forlee said that we need not chase the technologies of the fourth industrial revolution, but we should seek the benefits these new and developing technologies can bring to the country. “Let’s implement those elements of the fourth industrial revolution which fit real needs,” he said.
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