Why Eskom invests heavily in South African rural electrification

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By Steven Minnihan

Lux Research

 

Lux Research recently spoke at the Power Gen Africa 2012 conference in Johannesburg, South Africa, where speakers wrestled with the logistical hurdles, costs and potential benefits of providing power to various on-grid and off-grid customers throughout the developing world.

 

Rob Stephen of the South African utility Eskom offered detailed analysis of the risks and the options, explaining that his company electrified four million households since the early '90s, and plans to continue electrifying exceedingly remote areas.

 

Favorable for utilities, Eskom has demonstrated that electricity demand and revenue increase sharply in the months after electrification. Initially, a rural customer will demand approximately 80 kWh/month. However, soon after electrification, demand grows by as much as 300%. Furthermore, electrification directly leads to immigration, with village populations increasing by 100% or 200% in the six months after electrification. In total, a village's power and electricity demand is likely to grow 10 times in the year after grid connection.