owen zinaman presentation at energy issues and implications for macrostability workshop
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ELECTRIC SECTOR INSTITUTIONAL
ARRANGEMENTS AND GOVERNANCE
Owen Zinaman
Technical Lead
21CPP – South Africa
April 22, 2016
ENERGY ISSUES AND
IMPLICATIONS FOR
MACROSTABILITY
WORKSHOP
SOUTH AFRICA, NREL AND THE
21ST CENTURY POWER PARTNERSHIP
• The South Africa program connects South African stakeholders
with an international community of expertise.
• Activities: demand-driven technical assistance program; network
building and information exchange; sharing of global best
practices; collaboration on Reports by multi-country author teams
to advance global dialogue
EVOLVING DEFINITIONS OF POWER
SECTOR ECONOMIC EFFICIENCY
• Technology disruption driving evolution in the
meaning of (and means to)“efficiency”
• Increasing need to:
– Account for technology disruption, price evolutions, and
uncertainty/risk
– Align utility interests with system cost efficiency
– Ensure generation investment bankability
– Develop new concepts for cost recovery
– Address stranded assets
EVOLVING PROJECT BANKABILITY
REQUIREMENTS
0.0
1.0
2.0
3.0
4.0
Land-based Wind Solar Photovoltaics CSP
Average Tariff for REIPPPPZAR / kWh (May 2015 ZAR)
Bid Window 1
(4 Nov 2011)Bid Window 2
(5 Mar 2012)
Bid Window 3
(19 Aug 2013)
Bid Window 4
(18 Aug 2014)
78%
52%
33%
20%16%
11% 10%5%
22%
48%
67%
80%84%
89% 90%95%
0%
20%
40%
60%
80%
100%
Variable Costs Fixed Costs
EVOLVING PROJECT BANKABILITY
REQUIREMENTS
0.0
1.0
2.0
3.0
4.0
Land-based Wind Solar Photovoltaics CSP
Average Tariff for REIPPPPZAR / kWh (May 2015 ZAR)
Bid Window 1
(4 Nov 2011)Bid Window 2
(5 Mar 2012)
Bid Window 3
(19 Aug 2013)
Bid Window 4
(18 Aug 2014)
78%
52%
33%
20%16%
11% 10%5%
22%
48%
67%
80%84%
89% 90%95%
0%
20%
40%
60%
80%
100%
Variable Costs Fixed Costs
ENERGY EFFICIENCY
Thought Experiment: Large-scale rollout of customer energy
efficiency program
UTILITY COST RECOVERY
APPROACHES
Ag Res Com Ind
Customer Class
ZA
R /
kW
h
Ag Res Com Ind
Customer Class
Treasury
Real
Cos
t
WHERE IS ESKOM GOING?
~40,000 MW ~120,000 MWToday (2015) Future (2050)
WHERE IS ESKOM GOING?
95%
~40,000 MW ~120,000 MWToday (2015) Future (2050)
WHERE IS ESKOM GOING?
In a “wires-only” future, can
Eskom be a growing and
profitable enterprise?
Source: McKinsey: Brighter Africa
ISMO AND AN ESKOM DEVELOPMENTAL
ROLE – IS IT IRRECONCILABLE?
• Not all “ISMO” futures are
created equal
• Large diversity of end points that
meet the definition of ISMO
ISMO AND AN ESKOM DEVELOPMENTAL
ROLE – IS IT IRRECONCILABLE?
• Example: Mexico
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