Case Study

PROGRAMME Advan ce d Diploma in Business Man ag em ent

MODULE Operation s Managemen t in Supply Chain

YEAR $1$

INTAKE January $2024$

Marks $30$

Study the article provided below and answer the following questions.

QUESTION $1[15$ Marks$]$

South Africans Are Going Green to Escape Incessant

Power Cuts

With the grid collapsing, banks are steppin g in to help finance solar panels and renewables.

JUWI South Africa solar farm next to Elikhulu treatment plant, in Evander, in Aug. Photographer: Guillem Sartorio$/$Bloomberg

Adelaide Changole and Antony Sguazzin

November $9,2023$

With the grid collapsing, banks are steppin g in to help finance solar panels and renewables.

Th e Tin gala lodge is about a six$-$h ou r drive n orth east of Joh ann esburg w h ere th e savann a is dotted with dense clusters

of trees an d shru bs$.$ Locate d in a n ature con servan cy$,$ th e lod ge i s po pu lar with visitors lookin g to tour n earby Kru ger

Nation al Park. But unrelen tin g en ergy cuts h ave made run nin g th e busin ess a con tinu al ch allen ge$.$Wh en th e pow er g oes

off, the toilets don$$t work, the showers don$$t work and that is a major interruption $,$ said $80-$year$-$old owner Tom Joubert.

South Africa h as experien ced intermitten t pow er cuts, kn own locally as load sh eddin g$,$ sin ce $2008,$ but ou tages this year

have escalated to th e poin t wh ere th ey stall f actory operation s$,$ disru pt life an d sn arl traffic for exten ded periods on almos t

daily basis.

Imp osed by state$-$ow n ed p ow er utility Eskom S OC Ltd$.$ In an atte mpt to protect th e grid fro m collapse, th ese blackouts

occur in tw o$-$to$-$f ou r blocks, sometimes multiple times a day. Th e nu mber of ou tages reach ed record levels this year, an d

as of Au gusts, th e u tility$$s en ergy availability factor $$ a measu re of h ow much en ergy th e grid can h an dle $$ w as at $60\%-$

meanin g more than a third of power supply was inaccessible to customers.

While power cuts have eased for now, Eskom has continued to hike energy prices to cover its own rising costs.

Photovoltaic solar panels on the roof of a house in Johannesburg, in Aug. Photographer: Michele Spatari$/$Bloomberg

With n o imme diate fix on th e h orizon, Sou th Af rican s are in creasin gly turnin g to ren ew a ble en ergy, an d th e cou n try$$s

biggest ban ks are steppin g in to h elp. Sin ce th e be gin nin g of th e year, FirstR an d Ltd$,$ Stan d ard Ban k Grou p Ltd$,$ Absa

Grou p Ltd an d N ed ban k Grou p Ltd h ave rolled ou t fin an cin g option s to assist in dividu als an d bu sin esses tran sition to

solar. Th ese efforts, combin ed with govern men t clean$-$en ergy incen tives, are expected to h ave a wider impact: Th anks in

part to private pow er gen eration, th e In tern ation al Mon etary Fu n d predicts th at Sou th Africa$$s n ation al econ omy will grow

by $1\mathrm{.}9\%$ in $2024$ up from an anticipa ted $0\mathrm{.}9\%$ this year.

Orders are already su rgin g$.$ In a post on X$,$ econ omist Gaylor Mon tmasson $-$Clair observed th at Sou th Africa imported $$2\mathrm{.}5$

billion $(47$ billion ran d$)$ w orth of solar pan els, lithiu m$-$ion batteries an d inverters in th e first six month s of $2023,$ compa red

to $$1\mathrm{.}7$ billion total in $2022.$ For h omeown ers, solar in stallations don$$t h ave a set price tag; municipal en ergy bills su gg est

h ow man y pan els an d b atteries migh t be n ee de d$.$ Bu t a syste m with $8$ to $12$ p an els, an in verter an d b attery storag e $$

roughly what$$s needed to power a single house $$ run about $$13,250,$ with smaller installations costing about $$9,800.$

In Joubert$$s case, setting up the $16-$pan el solar installation that will liberate Tingala from Eskom will set him back around

$$18,380.$ He thinks it$$s worth it$.$We want to go off$-$grid so that we can control the power supply,$$ he said, estimatin g he$$d

save about $$750$ a month in energy bills.

To in dividu als an d s mall bu sin ess ow n ers like Jou b ert, Absa h as given ou t $$69$ million i n loan s f or ren ew a ble en e rgy

options, in clu din g solar produ cts$,$ while Stan dard Bank loan ed $$32$ million in th e first eigh t mon ths of this year throu gh its

$$solar$-$f or$-$h om e$$ program, enablin g aroun d $450$ homes to set up installation s$.$

Pan African hired solar installer J UWI South Africa to build a $10-$megawatt, $$8\mathrm{.}13$ million solar farm to power its Elik hulu treatment

plant. Photographer: Guillem Sartorio$/$Bloom berg

Companies are makin g a similar calculus. In May $2022,$ f ed u p with th e Eskom$-$imposed electricity rationin g th at f orced

th e co mp an y to curtail its pow er use by as mu ch as $20\%,$ g old minin g co mp an y Pan African R esou rces Plc decide d to

transition to solar.

Pan African hired solar installer an d ren ew ables developer JU WI South Africa to build a $10-$megaw att, $$8\mathrm{.}13$ million solar

farm to pow er its Elikhulu treatmen t plan t east of Joh ann esburg. Th e plan t$,$ which extracts traces of gold from old mine

waste, now relies on solar to meet a third o