KES – a case study

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KES a case study
Presented by Mkhuseli Faku Director - KES Energy
Services Company
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KES SHAREHOLDING
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KES in South Africa
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KES - KZN

• Company began operations in 2001 following 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
  10000 SHS installations in Southern KZN.
  Installations should be completed within the next
  few months. 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.

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KES Eastern Cape

• KES was awarded a tender in 2007.
• 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.
• 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.

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Fee for service model

• Capital investment 80 subsidy 20 KES
  investment
• Customer rents system for a monthly fee 79
  rands per month 365 days pa
• Depending on area monthly tarrif is subsidised by
  Free Basic Electricity from Local Municipality (
  from zero up to 50).
• KES has full operational/maintenance contract for
  systems for 20 yr period
• A prepayment meter system is used

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55 /65 wp solar panel
Solar Home System
3 CFL lights, 1 LED
Meter and battery enclosure
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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 does not.
• 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. FBE (free basic
  electricity) is not applied uniformly and might
  not be sufficient for the poorest of the poor.
• 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.
• ,

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Benefits to the community

• The inclusion of off-grid electrification
  programs is essential to achieve the stated
  objective of 92 access to electricity by 2015.
• 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 87 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

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Conclusion

• KES can offer the most relevant identified
  solution for a specific area this could imply
  different technological solutions (i.e mini-grid)
  or levels of service.
• However, there are challenges to the
  sustainability of the project that need to be
  addressed. We thank DOE for this platform and
  would encourage prompt dialogue between all
  stakeholders to improve sustainability of rural
  electrification.
• 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