21cpp webcast supply industry overview and recent ......barry maccoll general manager –research,...
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South African Electricity
Supply Industry –
overview and recent
developments
21CPP Webcast
Barry MacColl
General Manager
South Africa’s Energy Challenges
• Keeping the lights on – powering the economy
• Security of supply for a growing economy – since 1994 the economy has grown by 79% and the power capacity by <17%
• Reduction of Carbon footprint
• Energy Poverty and access – 3.5m gap
• Affordability and competitiveness – and protection of the poor
• Local environmental impacts – land, water, air quality
• System stability
• Financing and entry of new players (IPPs)
• Delivering on the Integrated Resource Plan (IRP)2015-03-18 2
3
Revised
Balanced
Scenario (RBS)
Integrated Resource Plan 2010 Consultation process and policy considerations
Before second round of
consultation process
( October 2010)
Second round of
consultation process (90
days for comments,
hearings in Nov, Dec)
After
consultation process
(February 2011)
Scenarios tested
• "Base Case"
• "Emission Limit"
• "Carbon Tax"
• "Regional Development"
• "Enhanced DSM"
Emission Limit 2.0 to
be pursued further
Main changes
• Increased
nuclear costs
by 40%
• Included
learning rates
(mainly affects
PV, CSP, wind)
• Disaggregated
solar
technologies
Scenarios tested
• "Adjusted Emission" (based on Emission Limit 2.0)
• "High Efficiency"
• "Low Growth"
• "Risk Averse"
• "Peak Oil"
• "Earlier Coal"
Policy-Adjusted
IRP
Multi-criteria deci-
sion makingPolicy choices
3
First round of
consultation process (30
days for comments,
hearings in Jun)
Parameters
• Inputs on
demand-side
(forecasts,
energy
efficiency)
• Inputs on
supply side
(generation
options,
committed
programmes)
• Economic
variables
South African Integrated Resource Plan (IRP 2010)
2015-03-18 4
South Africa Electricity Capacity in 2030
5
Existing 35515
Committed 10133
Decomm. (10902)
New 6250
Existing 1800
New 9600
Committed 1125
New 17800
South African Renewable Energy Independent Power Producer Program (REIPP)
• The names of the 17 preferred bidders out of a total of 93 submissions in round three of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme were announced earlier this year. This brings the total number of utility-scale renewable energy projects in progress to 64 with many window one projects in advanced stages of construction and a handful already feeding into the grid.
• The total megawatt value of bids submitted in window three amounted to 6 023 MW whilst the available allocation for this window was 1 473 MW. The round also saw aggressive price decreases across all the technologies with an average of 74 c/kWh achieved for wind down from 1.14 R/kWh in window one, 99 c/kWh for solar photovoltaic (PV) down from 2.75 R/kWh in window one and 1.64 R/kWh for concentrated solar power (CSP), down from 2.69 R/kWh in window one.
• Window three saw the addition of biomass (16 MW) and landfill gas (18 MW) projects to the REIPPP mix with the provinces of kwaZulu-Natal and Gauteng now boasting their entry into the REIPPP programme. Linear Fresnel CSP technology also makes its debut in the South African context. 6
Impressive Progress on REIPPP
7
http://www.energy.org.za/reipppp/78-reippp-window-three
Access to GCCA report
Renewable Prices Dropping Fast (1USD = 12,4 ZAR)
9
http://www.ee.co.za/wp-content/uploads/legacy/Energize_2013/03_iDn_summary-of-reippp.pdf
10
Policy Adjusted
IRP
Updated
IRP
2010 Rooftop PV
Solar Park
The Update process
11-3000
-2000
-1000
0
1000
2000
3000
4000
5000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Other renewables
Solar
Wind
Peaking - Pumped Storage
Peaking - OCGT
Mid-merit Gas
Import hydro
Nuclear
Coal
-3000
-2000
-1000
0
1000
2000
3000
4000
5000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Wind
Peaking - Pumped Storage
Peaking - OCGT
Mid-merit Gas
Import hydro
Import coal
FBC Coal
Nuclear
PF Coal
Balanced Scenario
EM2.0
Revised Balance
12
IRP Update Demand Projections
0
100
200
300
400
500
600
700
20052007200920112013201520172019202120232025202720292031203320352037203920412043204520472049
An
nu
al e
lect
rici
ty n
et
sen
t-o
ut
(TW
h)
SO IRP 2010 Moderate (Original)
SO IRP 2010 Low (Original)
SO IRP 2010 (Update) Moderate
CSIR - Green Shoots
SO IRP 2010 (Update) Low
CSIR - Weathering the Storm
2,8%4,5%
Economic
Growth
(CAGR)
Electricity
Demand
Growth
(CAGR)
2,8%5,4%
Net
sent-out
(TWh)
454
425
1,8%2,9%348
2,7%5,4%409
2,4%5,4%622
1,9%3,7%522
1,3%2,3%414
New SO Moderate
New SO Low
Weathering the Storm (New)
Green Shoots (New Base Case)
IRP 2010 Moderate
13
Update Technology Cost Assumptions
PF Coal(with FGD)
FBC Coal(with FGD)
IGCC Nuclear OCGT CCGT WindCSP
(Parabolic, 9hrs)
PVcrystalline(fixed tilt)
Inflation 2,655 2,234 3,682 5,554 590 863 2,156 7,599 3,106
IRP 2010 17785 14965 24670 37205 3955 5780 14445 50910 20805
IRP Update 21572 21440 29282 45074 4357 6406 15394 61176 19250
0
10000
20000
30000
40000
50000
60000
70000
Ov
ern
igh
t cap
ital
co
sts
(R
/kW
)
14
Costs: Technology choices
0
500
1000
1500
2000
2500
0%
2%
4%
6%
8%
10
%
12
%
14
%
16
%
18
%
20
%
22
%
24
%
26
%
28
%
30
%
32
%
34
%
36
%
38
%
40
%
42
%
44
%
46
%
48
%
50
%
52
%
54
%
56
%
58
%
60
%
62
%
64
%
66
%
68
%
70
%
72
%
74
%
76
%
78
%
80
%
82
%
84
%
86
%
88
%
90
%
92
%
94
%
96
%
98
%
10
0%
Pulverised coal, with FGD Pulverised coal, with CCS
Fluidised bed combustion (coal) with FGD Fluidised bed combustion (coal) with CCS
Nuclear OCGT
CCGT (R92/GJ) CCGT (R70/GJ)
Wind CSP, Parabolic trough, 3 hrs
CSP, Parabolic trough, 6 hrs CSP, Parabolic trough, 9 hrs
CSP, Central receiver, 9 hrs CSP, Central receiver, 3 hrs
CSP, Central receiver, 6 hrs PV, crystalline silicon, Fixed Tilt
PV, crystalline silicon, Tracking Pumped Storage
Biomass, Forestry residue
PV Fixed 2020
PV Fixed 2030
PV Fixed 2012
PV Tracking 2012
PV Tracking 2020
PV Tracking 2030
CSP Centr Receiver 2012
CSP Centr Receiver 2030
CSP Centr Receiver 2020
Wind 2012 Wind 2020 Wind 2030
15
Peak demand paths indicating incremental large
investment requirements
2015-03-18 15
H C
G
C G
G C C
C C
C
C
C
C
C
C
C C
C
C
C
C
C
C
C
C
C
N N N
N
N N
G G
N
N
N
N
N
N
N
N
N
C
G
H
N
G
Nuclear capacity (± 1000 MW)
Gas CCGT capacity (±1000 MW)
Coal capacity (±1000 MW)
Hydro capacity (±1000 MW)
C
C
C
G
G G
N
N N
N
N
N
N
N
16
Wind and PV under different scenarios
2015-03-18 16
Total wind capacity per scenario
Total PV capacity per scenario
• Continue with the current renewable bid programme with additional annual
rounds (of 1000 MW PV capacity; 1000 MW wind capacity and 200 MW CSP
capacity)
• Pursue small hydro and land-fill gas at competitive rates
Recent Developments
The Government uses the term and establishes their own…
19
The War Room mandate has been established as a response to
the current electricity challenges faced by the country
Mandate
Background
The War Room has a mandate to work with government in order to assist Eskom to overcome its
operational challenges through the Cabinet-approved five-point plan. The elements of the five-point
plan are as follows:
• Eskom emergency measures – 30 days
• Cogeneration
• Gas imports
• Coal independent power producers (IPPs)
• Demand-side management
• On 10 December 2014, Cabinet approved a five-point plan to address the current electricity challenge.
• Eskom welcomes government support in dealing with the constrained power system challenges.
• Eskom was tasked with focusing on the following, subject to finances and governance processes:
Expediting the recovery programme at Majuba and Duvha and other repair work and reducing partial load losses
Improving the quality and effectiveness of maintenance
Expediting bringing the Medupi and Kusile units online
Improving the quality of coal to produce electricity
Securing funding to enable the use of the OCGTs during the remainder of the MYPD3 period, on the understanding
that the OCGTs are used as a last resort to avoid load shedding
A plan to identify potential savings in the procurement of diesel
Renewal of the existing cogeneration contracts
Obtaining additional cogeneration capacity
Renewal of the existing demand market participation contracts
Pursuing additional demand-reduction mechanisms, including power buy-backs
1
20
Five-point action plan
The five-point action plan approved by Cabinet (December 2014) is as
follows:
1. Immediate measures (improve maintenance and
operational practices)
2. Cogeneration
3. Gas for power generation and additional sources of
supply
4. Other independent power producers (IPPs)
5. Demand-side management
Other focus areas include financial and procurement issues, skills
development, regulatory issues, long-term issues with short-term
implications (for example, energy mix), and communications.
212015-02-16 21
Government’s War Room structures
Deputy President
Cabinet
Interministerial
(Monthly)
Deputy President Advisory
Panel
Composition:
Eskom: CE, FD, Government: Energy, Public
Enterprises, Treasury, Trade and Industry,
Economic Development, Cooperative
Governance and Traditional Affairs, Water and
Sanitation
Composition:
Deputy President
Eskom: CE, FD
Government: Ministers
Composition:
Eskom: Marion Hughes, Louis Maleka
Government:
Dr Sean Phillips: DG Office of the Presidency
Ompie Aphane: DDG Dept. of Energy
Gcina Hlabisa: Dept. of Public Enterprises
Malcolm Simpson: National Treasury
(Programme Management)
Ashraf : Office of the Presidency
War Room Secretariat
(Weekly - Thursday)
Technical War Room
(Weekly - Friday)
22
Shortfall in supply to meet demandWe are at war – little wriggle room and system under threat
1 Medupi 6
2 Dedisa DoE Peaker
3 Ingula 3
4 Avon DoE Peaker
5 Ingula 4
6 Ingula 27 Ingula 1
South African Government – Seeking Solutions
• Objective of the RFI
• The objective of this RFI is to gather information on the potential for more and innovative demand reduction/shifting and/or supply initiatives. The immediate focus is on rapid implementation of “demand response” capabilities. The national medium to longer term objective is to have available a range of supply/demand options that will ensure a “more economic grid” and consequently assist in containing electricity prices whilst ensuring security of supply.
• This RFI is a stand-alone information-gathering and market-testing exercise to solicit information from providers of demand response and/or distributed generation solutions (the “Respondent”) and is intended to inform and assist the IPP Office with further deliberation and development of a national demand response strategy.
23
Small Scale Renewable Integration is coming!
24
http://www.nersa.org.za/Admin/Document/Editor/file/Consultation%20Paper%20on%20Small%20Scale%20Embedded%20Generation.pdf
25
THANK YOU
Barry MacColl
General Manager – Research, Testing & Development
Eskom
Email [email protected]