Stellenbosch to leave Eskom: what does this mean for homeowners?

Eskom has announced its plans to increase electricity prices in South Africa by nearly 16%. As of 1 April 2020, the average standard tariff will climb by 5.44c/kWh to 134.30c/kWh. The average rate of electricity in Stellenbosch is also expected to rise, something that residents are not happy about. Adding to their dissatisfaction, residents are fed up with the disruptions caused by loadshedding.

Since the Coronavirus pandemic, many residents are now working from home. They rely heavily on electricity to make sure that work is completed. Factors as such encourage the use of alternative sources of energy. The recent amendment of Schedule 2 of the Electricity Regulation Act has sparked an interest in a decentralised system of renewable energy generation and distribution system.

Taking this into account, in his fifth state of nation address President Cyril Ramaphosa highlighted the potential use of alternative energy. He stated that 2 600 megawatts of wind and solar energy would finally be procured. This will be a part of the government's bid window five in the next few weeks, followed by another round in August. The bid window will allow independent power producers to pitch price offers for electricity to the government.

With this in mind, the Stellenbosch Municipality plans to become the first town in the country to explore alternative sources of renewable energy to ensure that residents are "always lit". According to Gesie van Deventer, Executive Mayor of Stellenbosch, the municipality benefits from years of sustained good governance and being in the fortunate position of having access to some of the "brightest minds in the energy sector" may just make it possible to cut energy ties with Eskom.

Experts from Stellenbosch University, the Council for Scientific and Industrial Research (CSIR), internal research entities, and the Western Cape government are to work together on a study to determine the road to producing Stellenbosch's own 'green' power.

This study will explore:

• the use of methane mining and solar panels that will allow residents to generate electricity to sell to the municipality;
• purchasing electricity directly from registered independent power producers; and
• potential electricity sales to willing buyers from other municipalities.

How this affects property prices

Remote workers will choose to move from the city and other towns to a more sustainable and electricity reliable Stellenbosch once they get off Eskom's grid. Residential property in Stellenbosch will be highly sought after, leading to a suburban boom. As space becomes more scarce in the town, prices of properties will rise higher than municipalities that are yet to go green.

Stellenbosch will attract more manufacturing and high-tech companies who would also enjoy never using the word loadshedding again. This would inevitably lead to an increase in employment in the town. It would, in turn, secure the need for more residential developments. Owners of commercial and industrial properties will have a long list of tenants just waiting to take advantage of no production losses. This will allow landlords to lease their properties at a higher market price.

Advantages of using renewable energy

• Renewable energy will not run out

Since renewable energy is sourced from the environment to generate power, it will not run out. These energy sources include sunshine, wind, tides, and biomass. Currently, Eskom uses many types of fossil fuels which will one day no longer be available. As the Earth's quantity of fossil fuels decreases both the cost and environmental impact of extraction is sure to increase.

• Maintenance requirements are lower

Renewable energy requires less overall maintenance than Eskom's generators that use traditional fuel sources. Solar panels and wind turbines either have few or no moving parts. They also not rely on flammable or combustible fuel sources to operate. Low maintenance requirements lead to more time and money saved.

• Renewables save money

Using renewable energy that generates power from the sun, wind, steam, or natural processes means that you do not have to pay to refuel. You can end up saving hundreds to thousands of rands by moving over to renewable energy.

• Health and environmental benefits

When generation renewable energy sources emit little to no greenhouse gases or pollutants into the atmosphere. This leads to a smaller carbon footprint and an overall positive impact on the environment.

Disadvantages of using renewable energy

• Higher initial cost

While in the long run, you will be able to save money by using renewable energy, the cost of equipment and installation can be high.

• Unavailability of resources

Although renewable energy resources will not run out, they are not available all the time. For instance, some days may be windier than others and the sun does not shine at night. There can be unpredictable weather events that can make these resources unavailable.

Jump on the bandwagon before it is too late. Renewable energy is on its way to Stellenbosch. Securing your property investment with Knight Frank today will lead you to a more sustainable and profitable future.