11

The Utilisation of Renewable Energy Sources to Address the Security of Supply Challenges in SA

Vally Padayachee

MBA; M.Sc (Eng); EDP (Wits)

Director (Operations)

AMEU CONVENTION 2007

October 2007

2

Presentation Outline

Scene setter questions

Background – security of supply

RE characteristics

RE sources – relative merits

Power generation mix

Govt stance

Challenges to RE roll-out

Distributor (munic) perspective

Recommendations

Conclusion

3

Scene setter questions

Is the present South African environment conducive to implementing

renewable energy systems?

Are they reliable? How do they impact on the current ‘generation mix’?

How much and what type is needed to effect supply security?

Some funding is available, but who and how will it be paid back?

Can the renewable energy challenges be overcome?

Are there any other ‘spin-offs’ other than environmental and supply

security benefits? Example, job creation and local manufacture

4

Security of supply

Cost – A ‘best investment / least cost’ approach to ensure the security of supply

The alternative - Load shedding – causes massive economic disruption

Present load shedding conditions are expected to persist for a five year period

Consider the relative cost of outages in economic terms -

In the residential sector the loss is the least, say equal to x

Relative loss to commercial and light industry sector can grow to 10 x

Loss to heavy industry can be upwards of 50 x

Mitigating economic risk from load shedding as distributors -

Characterize MV feeders by their loads and discriminate in favor of commerce and industry when shedding

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Renewable Energy Characteristics

Chief criticism of renewable energy is the problem of intermittency -

Viewed as an unreliable source due to dependency on weather and climatic variations

Characteristics are not conducive to base nor peaking load applications

Uncertainty with regard to contribution to security of supply

Intermittency risks can be mitigated by -

Choosing complementary, diverse mixes of renewable sources

Geographical diversification – avoid localised weather conditions

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Renewable Sources – Relative Merits (1)

Source Technology Intermittency Advantages Disadvantages Rating / 5Solar Thermal

Collectors (Water Heating)

Days Energy has no T&D loss.Energy storage component is built in

4

Solar Roof-top Photovoltaics

30 minutes No T&D losses Requires electronics to convert, batteries for storage

3

Solar Grid connected solar farms

Hours Desert locations, remote. Usually requires supplement from gas fired boilers 2

Wind Mechanical turbines

30 minutes Usually remotely located

2

Small Hydro Mechanical Turbines

Years With storage, suited to peak applications

Subject to droughts, limited opportunities

1

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Renewable Sources – Relative Merits (2)

Source Technology Intermittency Advantages Disadvantages Rating / 5

Geo-thermal Ground source heat pumps

Grid co- dependent

Reduces T&D losses

Still requires electrical input, high maintenance – new technology 0,5

Biomass Landfill gas capture

Years – occasional relocation

In greenhouse gas terms, methane is 29 x CO2 value

Small scale, but reliable load factor.

1

Biomass Wood fuel A year Harvest and Transport logistics decrease energy yield.Subject to drought

1

Oceanic Wave energy convertors, tidal or ocean current turbines

Unknown Has potential to be non-intermittent

Industry is fledgling, development is needed

0,5

8

The Power Generation Mix (1)

Ideal generation mix (Reference SADELEC)

base load 72%

Mid-merit 13%

Peak generation 15%

South Africa presently has a >93% predominance of base load genearation

Where do renewable sources fit into the mix, and what are they really competing against ?

OCGT complementary relationship to solar thermal and wind intermittency

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The Power Generation Mix (2)

Active DSM and intermittency (dynamic response) may also complement each

other

Renewable sources bring extra weather sensitivity risks to generation forecasting

and scheduling

Two views can be taken –

Renewable energy conflicts with peaking plant capacity requirements – the more renewable energy is employed, the more peaking plant will be required for shortfalls

Renewable energy complements peaking plant by reducing premium cost fuel consumption

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Government Stance

Renewable Energy White Paper of 2003 –

Target of 10 000 GWh renewable energy contribution by 2013 (approx = 1667 MW)

Expectation is from wind, solar, biomass and small scale hydro

Utilization of renewable energy is therefore a ‘given’ and is driven by -

Climate change / environmental issues – CO2 reductions

Fossil fuel conservation

The long term need to diversify energy sources – too much dependency on a single fuel source (e.g. coal) is a risk in itself

A lot more is needed to make a reasonable impact

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Challenges to Renewable Energy Roll out

Funding sources and easily accessed financing mechanisms need to be put in place for

home owners

Introduction of feed-in tariffs for utility scale renewable projects

Relative capital costs of renewable energy are high

Legislation to ensure the uptake of energy whenever it is available

Customer awareness and education

The current cheap, ‘dirty’ energy creates a barrier for the introduction of renewable energy

Competent manpower resources – accelerated training is needed

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South African Wind Resources

Potential in the Western Cape is good

In progress - Darling Wind Farm 4 x 1,3

MW units - total 5.2 MW, on line

November 07

Eskom 100MW wind farm tender

Where else in South Africa is wind

potential good to realize geographical

diversity?

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Eskom SWH Incentive

Eskom DSM will provide a monetary incentive

to assist the implementation of residential

Solar Water Heating Systems.

The SABS are equipped with the most modern outdoor test rig to measure the performance

The SABS also ensures that systems comply to national standards

Targets:

900 000 installations nationwide

R 2 billion provision made over the next 5 years

GLCincentive ffQRR 500

With Q the system rating determined by SABS for a standard

day in kWh;

fLC a modifier for Local Content that can increase or reduce the

incentive by up to 5%;

fG a modifier for Guarantee that can increase the incentive by up to

20%.

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Solar

Electrical

Electrical / Solar

kW

h

0

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Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07

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Solar

Electrical

Electrical / Solar

kW

h

WEEKLY

MONTHLY

Selected Cut-Off

11694 - 56%

9301 - 44% 27634 - 48%

29978 - 52%

Electrical / Solar Electrical / Solar

Electrical Solar Electrical Solar

Before Timer Switch-On After Timer Switch-On

*Courtesy of SESSA and Eskom

Supplementary energy requirement is

seasonal

SWH - Actual measured performance

Control of supplementary energy

is essential

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Distributor (Munic) Perspective – Solar Water Heating Systems

Winter security of supply risk – less frequent maybe, but still a threat -

56 overcast days per annum in South Africa – intermittency issue

Electricity industry to provide supplementary energy on low solar days

This may not avoid costs to re-enforcement networks in order to cope with bad solar days

Financial issues

Significant summer domestic revenue loss (max solar energy utilisation)

Without proper control of timing of electrical water heating energy, the risk of winter loss-making sales prevails. (Buy on Megaflex, but sell at flat rate)

Electricity networks still need to be maintained with less funds

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Solar Water Heating – 3 Metros Proposed Initiative(Johannesburg, Tshwane and Ekhuruleni)

ESCO

Bulk Finance

SWH suppliers and installers

Install SWH

Medium-term loans $

$

Agreement

$

Repayments

$

Long- term loan

Carbon $

Eskom incentive

City Role

Endorse Facilitate financial agreements?

Grant “operating” license? (fee?)

Quality control?

(logo/branding)

Help desk?

E+Co loan guarantee

$

$

Domestic Energy Consumers

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Distributor (Munic) Involvement as SWH ‘Energy Service Company’

Why get involved?

Offset summer revenue loss – perhaps provide maintenance services (“fee for service approach)

Collective and auditable carbon trading

Sustainability – Apply mass SWH rollout as if purchasing power station plant.

Metro distributors are the nuclei of future REDS

Metro’s expectations - full support to be given to Solar Water Heater systems implementation – key

stakeholder

‘Green City’ objective of shareholder

Summertime load relief - Don’t overlook – provides additional room to maneuver and apply band-aid to

power stations and distribution networks

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Distributor (Munic) Strategy – Solar Water Heaters

Mitigate the ‘bad solar day’ demand risk by influencing system specifications –

Limit electrical element size to not more than 1,5 kW

Highest economically viable tank thermal insulation - < 1kWh per day

Increase nominal tank storage capacity by 50% over traditional electric geyser sizing

Use Load Management systems to support solar Water Heating systems

Create special SWH load group, tailored to weather conditions when necessary

Maximize shift of supplementary energy requirement to off-peak periods – does the work of the timer

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Recommendations of the Way Forward

Stronger legislative support and enabling tariff structures

Customer and stakeholder education

Consider diversity of renewable resources

Also identify east coast wind sites

Also research oceanic (wave, tidal and current) sources to improve the mix

Spin-off benefits

New industries

Potential for job creation (EPWP, local manufacture,etc)

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Conclusion

The RE landscape in SA – is it sufficient to mitigate adequacy and security of supply risks?

Consider also in the context of

Eskom Stage 1 load shedding = 1500 MW

Eskom Stage 2 load shedding= 3000 MW (average for last week)

Eskom Stage 3 load shedding = 4500 MW (are we going to reach this stage rather sooner than later)

At this stage ,

The answer could be ‘no’, up until 2012

Impact of ASGISA’s 6% GDP Growth (9% in Johannesburg) – if realised, has to be underpinned by adequate and secure energy (esp power) supplies

Conversely – in order to respond to environmental pressures – when would be a good time to start with renewable energy sources?

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THANK YOU