Gas Generators: The Alternative to Diesel

We get it. Diesel generators are what you know. Its what we have all been accustomed to, since load shedding first reared its head in 2007. And we’ll admit that it wasn’t the worst decision when these outages were a rare occurrence. A couple of hours here and there. The diesel costs being something that you grimaced at but wrote off as an ‘essential operating expense’.

But things are very different now. Stage 6 load shedding translates to daily outages of 11.5 hours in Ekurhuleni and 9.5 hours in Johannesburg. This means that diesels are essentially your grid for almost half the day, at an exorbitant running cost. 2023 is the point of no turning back, and diesel expenditure has the potential to sink a business. And its all down to comparative running costs.

We undertook an exercise with a client recently; a factory operating in Johannesburg. They have access to piped natural gas, and our solution puts them on a Power Gen gas tariff. We conservatively assumed a diesel price of R20/litre (very conservative, given the retail diesel price) and we accounted for the recent 18.65% NERSA increase to their current electricity tariffs. 

For a 1 MW (one megawatt) running load, the results were as follows:  

• SustainPower Continuous Gas Generator: R1.99/kWh
• Municipal Time of Use Levelized Energy Cost: R2.17/kWh
• Diesel Stand-by Generator Running Cost: R6.66/kWh

This means that not only are gas generators a third of the running cost of diesels, they are also competitive with municipal electricity tariffs. The gas genset effectively becomes your grid, with municipal supply (and your diesel that is currently sitting at your site) becoming the ‘backup’.

Granted, gas units are made to order and thus, require a larger capital outlay when compared to diesels; but when we factor in the savings enjoyed by effectively removing your diesel costs, we see an average Return on Investment of 3 – 3.5 years. This for an engine that will run continuously for 10 years, before enjoying another decade of usage after a major overhaul.

An added benefit for customers who require hot water, cooling or steam in their operations, is that our Combined Heat and Power (CHP) solutions can offset these costs. This offers even more savings and can knock additional years off your ROI. Its seeing some clients enjoy paybacks as low as 24 months.

As a sustainability consideration, natural gas emits a fraction of the CO2 compared to diesel and the coal-powered national grid, not to mention that its well suited to form a hybrid with solar PV solutions.

If the capex is the last remaining stumbling block, we assist with funding options, such as Power Purchase Agreements or Lease Agreements. These are popular, as they allow for more sustainable budgeting; effectively a monthly debit order to provide continuous power to your location.

Natural gas power generation is proven technology. The largest economies on the planet rely on it and it makes up 38% of the United States cumulative national grid. Renewables are intermittent, the grid is unreliable and diesel costs cannot be justified. Quite simply, natural gas is the solution needed to save the South African commercial & industrial sector.