The Potential for IoT in Managing the Energy Crisis in South Africa

IoT technology functions as a bridge between the physical and digital worlds. Across the globe, increased adoption of 5G networks is driving the need for faster, decentralized, and real-time feedback, particularly for organizations promoting the digitalization agenda. While the improvements IoT technology brings to the running of industry and the home are substantial, there is one critical impact that IoT technology brings which is of high importance in the South African context. That is energy optimization.

Although energy management is a hot topic across the globe, the critical nature of the energy crisis in South Africa makes this application especially prevalent. Home and business owners alike are seeking out smarter ways to use and save energy. Already the presence of persistent blackouts has forced South Africans to seek out alternate energy sources. The solar energy market has, for instance, grown significantly and is expected to increase by 23.31 terawatt-hour units from 2021 to 2026 with the growth momentum accelerating at a CAGR of 29.74 percent. 

Alongside solar diesel-powered generators have also risen in popularity, offering a lower start-up cost but higher ongoing expenses. South Africa now has the largest per capita backup generators in Africa, with revenue forecast to reach over $159 thousand by 2030.

While both solutions are necessary for business to continue as usual, organizations are in desperate need of energy management tools.  This is where the value of IoT solutions becomes clear. For many, managing energy consumption involves balancing several sources of energy to optimize spend and maintain consistent uptime.

In most cases, this is solar, grid, and generator power. This means turning off non-essential assets such as air conditioners when they are not needed and balancing battery power with on-grid energy consumption, and diesel to ensure an efficient mix. Rather than manually turning off non-essential assets, IoT technology can do this automatically, or enable users to do this remotely.  

In addition to balancing the use of different power sources, IoT technology can help in monitoring essential items. This includes tracking battery and diesel levels, switching between different sources, and alerting you to instances when one or the other is running low, ensuring business continuity.

Having the ability to manage these levels remotely is essential, especially for businesses with facilities in remote areas as every minute of over or underutilization has a cost or revenue association. 

The same smart insights can have cost-cutting benefits for office spaces. With the pandemic fundamentally altering how office space is utilized, IoT solutions help companies ensure that office space is used efficiently, reducing unnecessary energy consumption and costs. 

Additionally, real-time monitoring of assets in conjunction with planned load shedding enables smarter remote monitoring of business operations through key alerts and outcomes. 

Above and beyond ensuring business continuity, there are environmental, social, and governance (ESG) benefits to IoT technology. Unfortunately, the increased use of diesel-run generators has a negative environmental impact, often having implications for businesses' ESG agenda and goals. 

In many cases, solar and grid power alone are simply not sufficient to run high-demand facilities. By helping to optimize how different power sources are used, IoT solutions can help businesses minimize their diesel use.

Similarly, it opens the possibility of new approaches such as virtual power wheeling which are promoting the growth of sustainable energy solutions in South Africa. In this way, rather than being a hindrance to the adoption of IoT and progression into the digital future, load shedding and the challenges it causes have the potential to act as a driving force for digitalization in the country.

Unfortunately, South Africa is still lagging behind the rest of the globe in terms of IoT adoption. However, as smart home technologies continue to grow in prominence, this will likely spur further adoption in the business sphere as decision-makers start to better understand the need for a shift to the digital world. In addition to this, pilot projects have the potential to increase IoT adoption through necessity.