Home is where the power is: The Saltuba Cooperative

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If every one of the 16 million households in South Africa put solar panels on their rooftops, they could supply all the electricity needed to power the country, say Patrick Brennan and Janet Cherry.

At the COP 26 meeting in Glasgow in November 2021 it became clear that a transition away from fossil fuels – in particular coal and oil – is necessary. But there is widespread concern about job losses in the coal mining and other industries that are dependent on fossil fuels. So far, it is mainly the big ‘green energy’ companies that have benefitted from government’s energy procurement programme. Because electricity from PV solar is now cheaper to produce than electricity from coal, it is time to look at how workers and working-class communities can benefit from this transition.

Government regulations have changed recently to allow for municipalities to buy electricity from local producers, and for companies and institutions to generate their own electricity through solar or wind power. In other words, they do not all have to go through Eskom and the ‘grid’ (which is how electricity is transported and supplied to municipalities, homes and factories) can be decentralised. This provides a big opportunity for socially-owned and community-owned renewable energy projects which can generate electricity and sell it to municipalities or to local businesses and institutions like schools and hospitals.

Starting small

One example of this is the Saltuba Community Primary Cooperative in Kwazakhele Township, in Gqeberha. This exciting pilot project is situated on a ‘gap tap’ in the old working-class township of Kwazakhele. The ‘gap taps’ are municipal land which is zoned as public open space, in between the municipal houses that were built in the 1950s.

The Saltuba Cooperative was set up as a pilot of the Transition Township project, an action research project of the Department of Development Studies at Nelson Mandela University. The idea of the Transition Township project is that existing land and infrastructure can be used by residents to generate income and sustainable livelihoods. This includes using the roofs of the houses for water capture, the land for growing vegetables, and the electricity grid for selling electricity from PV solar panels which are put up in a distributed solar array.

Saltuba co-op members erecting a food tunnel on the gap tap

The baseline research was conducted by a community research team funded by the NIHSS (National Institute for Social Sciences and Humanities) as a Catalytic Research Project. In the pilot project the renewable energy installation takes the form of a ‘car port’ structure with 15 PV panels forming a roof – but the panels can be put on the roofs of houses or bigger buildings like schools, or on the top of shipping containers. For the pilot project, a grant from a local trust, the Ezethu Trust, was raised to buy the solar panels and other inputs.

The residents of the houses around the solar array form a primary cooperative, in which they are all equal members and decide democratically on the distribution of income from the sale of electricity. While the cooperative is not an employer as such, and does not aim to provide ‘decent work’ to its members, there is some temporary work involved in putting up the structures and some ongoing work in maintaining them, providing security etc. The cooperative members decide themselves on who is going to do each job and what they should be paid.

This is a very small project with generating capacity of only  5 kW, mounted on a car-port structure and feeding  directly into the municipal grid. The installation operated for 20 months and produced 8 800 kWh of electricity (average 444 kWh per month). At the current pre-paid price per kWh (R2.18) in Nelson Mandela Bay this amounts to R19 314 or approximately R966 per month. These numbers are despite the impact of load-shedding, which occurred at various times during the period (when the grid is down Solar PV production also stops unless there is a battery system in place). In terms of environmental benefits, it is the equivalent of removing 3.5 tonnes of carbon from the atmosphere or planting 104 trees.

The carport with 15 PV panels that generated 5kw of electricity that was fed straight into the municipal grid

Challenges

However, there were challenges from the municipality side. It has been difficult to get a municipal account for the cooperative, even though it is registered, as it does not own the land (which is municipal land) and so the electricity department has to date not been able to install a smart meter to measure the amount of electricity generated.

While the residents have taken ownership of the gap tap and production facilities on the gap tap space, and have voluntarily provided security, two of the solar panels  were stolen in August 2021 which brought a temporary halt to the electricity generation.

A further challenge is that the municipality informed us recently that they have zoned some of the gap taps for housing development and plan to sell them off to private individuals or developers.

From the cooperative side, they have had challenges in opening a business bank account, an experience common to working class people who do not have a steady source of income. There are also unrealistic expectations of employment and income from the project. It has taken a long time to begin to give some benefit to the members.

Community-owned renewables can ensure a Just Transition

But despite these challenges, there is a strong argument that this model, community-owned renewable energy, which is decentralized production of electricity based on PV solar, and feeding into the local (i.e. municipal) grid, is the answer to the need for a ‘just transition’.

If the gap tap at Saltuba had a 50 kW installation it would be able to generate approximately R10 000 per month for 25 years or more. If the whole gap tap area was used and a 100 kW system was installed, it could improve household incomes substantially. As the overheads for maintaining the system, once it is established, are very low, this money will go almost entirely as cash income to the members of the Saltuba cooperative.

There are 120 gap taps in Kwazakhele township alone, and the community researchers of the Transition Township project calculated that:

  • Initial R1.5 million investment (R60 000 per household) generates approximately R600 000 per annum in revenue (R24 000 per household) for 25 years
  • The model assumes that a portion of this amount (R125 000) will be used to cover the marginal cost to run and maintain the installation and that a substantial surplus (about R18 000) will be available for distribution to each participating household (after fixed costs e.g. loan repayments etc.).
  • Average household income in the area is approximately R30 000 per annum so once a payback period is completed this has the potential to raise average household income by almost two thirds.
  • Note: this additional income is received as a dividend based on household ownership of a share in the co-operative which owns (controls) the means of production NOT in wages for employment (although there will be some labour required for the supply, construction, operation and maintenance of the installation).
  • In this context improved productivity using new technologies becomes desirable as it leads to an increase in the surplus available for distribution or re-investment.

Some critics think that this model is only going to meet a small part of the country’s energy needs. Our research shows otherwise: in theory household production could meet 83% of the whole country’s planned energy needs.

The current installed capacity (coal, nuclear, renewables etc.) is 52,104 MW. The latest Integrated Resource Plan proposes installed capacity rising to 77,834 MW by 2030 (with most of the increase coming from renewable sources). If all 16 million households participate in producing electricity, the installed capacity would be 64,792 MW – i.e. 124% of current installed capacity and 83% of planned capacity for 2030. The table below shows how much electricity can be produced by PV solar at each level (from the gaptap cooperative up to national level) and what its current value is in Rands:

Moreover, we see this model as working in an integrated and sustainable local economy. Such an economy would use existing unused factories, buildings and infrastructure to promote a circular economy which prioritises localised production for local markets.

One example in Kwazakhele is the Swartkops Power Station, a coal-fired power station that was decommissioned over 20 ago. It could be the hub of new industries based on renewable energy, food production and processing, and manufacture from recycled materials. Such a development would provide employment to a working-class which is without work.

Patrick Brennan and Janet Cherry are part of the Transition Township project at Nelson Mandela University, Gqeberha

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Patrick Brennan and Janet Cherry
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