The South African energy landscape has undergone a significant transformation. While scheduled load shedding appears to have been beaten, it has been replaced by a new set of challenges: high and erratic price increases, frequent and prolonged outages, poor power quality, and, in some areas, scheduled load reduction.
These challenges are most acute in areas plagued by dysfunctional municipalities, electricity theft and illegal connections, which have reduced maintenance and capital spending, overburdened the local grid and compromised the reliability of the power supply.
As a result, businesses, farms, and residential estates must rethink their energy strategies to ensure reliability, sustainability, price predictability and cost-effectiveness.
For many, embedded behind-the-meter generation solutions are increasingly seen as part of the answer, not only for when the local grid fails but also for the benefits of peak shaving, demand charge management and time-of-use tariff arbitrage.
Solar PV is the most obvious part of the solution and needs to be integrated with the unreliable and increasingly expensive grid, ever cheaper batteries and generators.
The two primary fuel options for generators are diesel or gas – either piped or compressed natural gas or liquid petroleum gas (LPG). In South Africa, diesel generators have traditionally been the solution for emergency backup power, with gas generators becoming a more attractive alternative for customers who seek not just emergency backup power, but also long-term savings and environmental benefits.
Diesel generators have dominated the market for backup and off-grid power solutions for many years. The upfront capital cost of diesel generators is typically lower than that of gas generators, making them a good option for businesses and residential estates with limited resources.
However, the operating and maintenance costs of diesel generators very quickly add up. Diesel is expensive, is subject to the General Fuel Levy for most users, and the efficiency of diesel engines is lower when compared to gas engines, meaning they burn more costly fuel to produce the same amount of electricity. Diesel generators also require more frequent maintenance, which adds to the long-term cost.
The environmental impact of diesel generators is another important consideration. Diesel engines produce significantly higher emissions of particulate matter, sulphur oxides, and nitrogen oxides compared to gas engines.
In a country like South Africa, where air pollution is a growing concern, this presents a significant challenge. While diesel generators provide a relatively cost-effective solution for short-term needs, they are not the best long-term choice in an increasingly environmentally conscious world.
Gas generators, while requiring a higher initial capital investment, offer compelling advantages in the long run. One of the most significant benefits is their improved fuel efficiency.
Gas is inherently more efficient than diesel, meaning a gas generator can produce more electricity for the same value of fuel. This translates into lower operational costs, especially when running the generator for extended periods, such as every day during peak demand hours or for time-of-use tariff arbitrage.
Gas engines also tend to have lower maintenance costs compared to diesel engines. This is because gas combustion produces fewer harmful byproducts, resulting in less wear and tear on the engine components.
In addition, gas engines are generally more durable, with longer lifespans and lower likelihood of expensive breakdowns.
Beyond cost savings, gas generators offer significant environmental advantages over their diesel counterparts.
Gas generators run much quieter than diesel generators and gas combustion results in considerably lower emissions of harmful pollutants such as particulate matter, sulphur oxides, and nitrogen oxides. In fact, when compared to the South African national grid, which relies heavily on coal-fired power plants, gas generators emit fewer greenhouse gases and pollutants overall.
This is a particularly important consideration in the context of South Africa's ongoing energy crisis, where coal reliance is a major contributor to poor air quality and environmental degradation. Eskom's coal heavy electricity production is widely cited as emitting approximately 0.95 to 1.05 tons of CO₂ per megawatt-hour (tCO₂/MWh) on average. Whereas for a mid-sized stationary gas engine running on LPG, the carbon intensity is estimated to be around 0.26–0.30 tCO₂/MWh, delivering a material reduction in CO₂ emissions.
By comparison, a mid-sized diesel generator also beats Eskom, however the carbon intensity is significantly higher than a stationary gas engine running on LPG, with the estimated range for diesel generators being around 0.7–0.8 tCO₂/MWh.
Furthermore, when integrated with renewable energy sources like solar PV with battery storage, gas generators can enhance environmental sustainability by providing cleaner backup power during periods of low solar generation and reducing reliance on the grid during peak demand hours.
By relying on both solar energy and gas power, businesses can materially reduce their carbon footprint while also improving their energy security.
Limeroc Business Park, Centurion
The Limeroc Business Park has installed 2.5 MWp of solar PV integrated with 2.2 MW of gas generators and the grid. The purpose of the hybrid installation is to provide emergency backup to businesses within the business park, to “peak shave” or reduce the business park’s maximum draw from the grid during peak tariff time-of-use periods, and to reduce the overall carbon intensity of the business park’s energy requirements. The gas generators also enjoy lower fuel and maintenance costs than alternative generators – and an engine lifespan 4 to 5 times longer than diesel generators.
One common misconception is that gas generators are only cost-effective for businesses or estates that require high levels of continuous power generation. While gas engines have higher upfront costs, the savings from lower fuel consumption and reduced maintenance costs make them an attractive option for a wide range of use cases.
The crossover point – the point at which the total cost of ownership for a gas generator becomes more economical than a diesel generator – often comes at fewer operational hours than many people assume.
In fact, for many applications in South Africa, this crossover point can be as low as 1 600 cumulative running hours. This makes gas generators a viable solution even for businesses or estates with moderate energy demands, such as those engaging in peak shaving, demand charge management, or frequent emergency backup.
In cases where the generator is used primarily to optimise energy consumption during daily high-tariff periods, the gas engine will deliver greater cost savings over time compared to diesel.
Another important factor in favour of gas generators is the evolving LPG market in South Africa. Historically, the market has been heavily reliant on local petroleum refinery byproducts, but recent years have seen increased imports and a far more robust supply chain.
This has resulted in a more reliable and competitive fuel source, which enhances the attractiveness of gas generators for both commercial and residential applications.
LPG supply chain
Petredec, a leading global LPG company, is making significant strides in improving LPG distribution in South Africa. Petredec operates a crucial LPG import terminal in Richards Bay. Developed in partnership with Bidvest Tank Terminals in 2020, it facilitates the import of bulk LPG to meet the growing demand for this energy source. The Richards Bay facility is part of a larger strategy to enhance South Africa's energy security and LPG infrastructure.
In addition to its operation at Richards Bay, Petredec is collaborating with Transnet Freight Rail to establish a modern LPG logistics system. This includes the creation of a dedicated rail freight service and a new intermodal hub at Sentrarand, Gauteng.
These developments are set to improve the efficiency and environmental sustainability of LPG transportation, ensuring better distribution across South Africa and even the broader Southern African region.
As the South African energy landscape changes, businesses and residential estates need to evaluate not just the upfront capital costs but also the total cost of ownership when deciding between gas and diesel generators.
Gas generators are a more cost-effective solution for those with moderate to high levels of generator use, as they offer superior fuel efficiency, lower maintenance costs, and reduced environmental impact.
For those looking to integrate gas generators into a broader energy strategy, hybrid systems – such as those combining solar PV, battery storage, and gas – are becoming increasingly popular as they provide the best of both worlds: renewable energy during the day and reliable backup power when solar generation is low.
This hybrid approach can further reduce dependence on the grid, decrease energy costs, and enhance sustainability.
Decentral Energy is a leading provider of comprehensive energy solutions in South Africa, offering a range of products and services including solar PV, batteries, and both diesel and gas generators.
The company designs, installs, owns, and maintains energy assets, catering to customers in the retail, tourism, residential, and commercial and industrial (C&I) sectors.
Recognising the growing importance of gas-powered solutions, Decentral Energy has recently been appointed the sole service provider for the Guascor Energy range of gas engines in South Africa. Guascor Energy is a renowned manufacturer of high-quality gas engines known for their reliability, efficiency, and durability.
This partnership further strengthens Decentral Energy's position as a leading provider of sustainable and cost-effective power solutions for the South African market.
By carefully considering the total cost of ownership and the evolving energy landscape in South Africa, businesses can make informed decisions that optimise their power generation strategies and ensure business continuity in the face of an increasingly unreliable and expensive grid.
