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Dialogue on Utility and Local Scale Renewable Energy in South Africa 22 April 2015 - 1

Dialogue on Utility and Local Scale

Renewable Energy in South Africa

Solar photovoltaic research: Drakenstein Municipality

Karin Kritzinger and Imke Meyer,

Stellenbosch University, CRSES

Date 22/04/2015

Rooftop Solar PV

Contents

Context of research

Generation potential for PV in Drakenstein

Potential of SSEG by private sector in Drakenstein

Impact on municipal revenue

Opportunities to install on municipal buildings

Prefeasibility study

22 April 2015 - 2



Dialogue on Utility and Local Scale Renewable Energy in South Africa

Context of Research

• The 20% study - SU

• State of play of SSEG and impact on municipalities - WWF

• Overview of Drakenstein achievements to date - WWF

• Analysis of potential of SSEG by private sector - SU

• Potential impact on revenue - SU

• Opportunities to install on municipal buildings - SU

• Prefeasibility study - SU

• Financing of projects for the municipality - WWF

22 April 2015 - 3




Context of Research









22 April 2015 - 4




Context of Research









22 April 2015 - 5




Potential of SSEG by private sector in Drakenstein:

Solar Resource

22 April 2015 - 6 Dialogue on Utility and Local Scale Renewable Energy in South Africa

Location Annual PV output

(optimally inclined)

Paarl 1 632 kWh/kWp

Pretoria 1 731 kWh/kWp

Kimberley 1 854 kWh/kWp



Potential of SSEG in Drakenstein:

PV Generation potential




Dalweiding: 60 000 (Noorder Paarl, Daljosafat Industrial and Paarl East)

Dwarsrivier: 30 000 (Pniel, Hollandse Mollen, Victor Vester, Pearl Valley and

Val De Vie)

Hugenot: 60 000 (Central Business district, Denneburg, Boschenmeer)

Wellington: 30 000

Slot: 30 000






Dalweiding: 9 000

Dwarsrivier: 4 500

Hugenot: 9 000

Wellington: 4 500

Slot: 4 500






0

1000000

2000000

3000000

4000000

5000000

6000000

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

kW

h

Dwarsrivier

Slot

Paarl Municiplatiy

Wellington

Hugenot

Potential of SSEG in Drakenstein: PV Generation potential typical summer day: Hugenot Eskom and PV




0

10000

20000

30000

40000

50000

60000

70000

80000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

kW

h

Potential of SSEG in Drakenstein: PV Generation potential typical winter(ish) day: Hugenot Eskom and PV




0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

kW

h

Potential of SSEG in Drakenstein: PV Generation potential typical winter(ish) day: Hugenot Eskom and PV and loadshedding




0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

kW

h

128 000

58 000


• Industrial user

• Residential user

• Usage analysis

22 April 2015 - 13





Industrial user

• Paarl

• 30 kWp

• 11 identical sub systems with batteries

• Other; • Natural light

• Solar geysers

• CFLs and LEDs

• Motion sensors

22 April 2015 - 14




22 April 2015 - 15




0

1000

2000

3000

4000

5000

6000

July August September October November December January February March April May June

PV production (kWh)

Total = ~45 000 kWh / year


Industrial user

22 April 2015 - 16





Industrial user

30 April 2011

22 April 2015 - 17




0

5000

10000

15000

20000

25000

30000

35000

40000

Total Electricity use per month from PV and the grid

87%

13%


Industrial user

• Paarl

• SWH

• Heat Pump

• Gas hob

• EE lights

• Panel heaters

• 4.25kWp PV system

22 April 2015 - 18





Residential user

22 April 2015 - 19




0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Electricity Usage 6 monthly

Heat Pump

SWH Gas hob

Panel heaters in kids’ rooms

Panel heater in main bedroom

EE Lights (LED)

4.25kWp PV installation

2010:

1 377 kWh/m

2011:

1 259 kWh/m

2012:

1 344 kWh/m

2013:

1 287 kWh/m

2014:

1 128 kWh/m


Residential user

22 April 2015 - 20




0

500

1000

1500

2000

2500

Total Electricity use per month from PV and the grid


Residential user


• Industrial user: 356 879 kWh / 45 798 kWh

• Residential user: 17 457kWh / 6 786 kWh

22 April 2015 - 21





22 April 2015 - 22





22 April 2015 - 23




Role of the municipality: the way forward

• Business as usual

• Policing “illegal” installations

22 April 2015 - 24




22 April 2015 - 25




Business as Usual

Perfect Harmony

Central Control

Hard Times

Small number

of rooftop PV

installations

Municipalities play a

dominant role in ED

Municipalities play

no role in ED

Role of the municipality: the way forward

Large number

of rooftop PV

installations

22 April 2015 - 26




Business as Usual

Municipalities remain the local

distributors and resellers of

electricity. All users of electricity

dependent on a reliable supply of

electricity from Eskom who, as a

monopoly, can determine the price.

Perfect Harmony Municipalities, industry and private

home-owners continue to install

rooftop PV in collaboration with each

other. The electricity generated by PV

suplements the central electricity

supply from Eskom and thereby

increases security of supply in a stable

electricity market.

Central Control

Eskom / new regional distributors

takes over electricity distribution.

Stimulation and/or control of PV

market out of the hands of

municipalities, including the

security of supply as well as the

price.

Hard Times

Industry and private home-owners

continue to install rooftop PV and

financially secure clients become

independent of the local/national grid

resulting in a loss of revenue for both

Eskom and the local municipalities.

Small number

of rooftop PV

installations

Large number

of rooftop PV

installations

Municipalities play

no role in ED

Municipalities play a

dominant role in ED

Contents

Drakenstein Municipality

Solar Resource

Municipal Sites

1 Market Street

Local Site concerns

Load Characteristics

Constraints

Feasibility




Location


Paarl Paarl Mountain (Evl. 676 m)

Haweqwa mountain range



Solar Resource


Location Annual PV output

(optimally inclined)

Paarl 1 632 kWh/kWp

Pretoria 1 731 kWh/kWp

Kimberley 1 854 kWh/kWp



Municipal Buildings investigated


Electricity Building

Civic Centre

1 Market Street

The location of the 3 sites in relation to Paarl Mountain



Macro Site Concerns


Electricity building Civic Centre 1 Market Street

GHI [kWh/m2] 2105 2104 2080

PR 77.7 % 77.5% 76.5%

Specific Yield [kWh/kWp] 1644 1643 1625

The macro shading results in +/- 1% difference in yield.



Site constraints

2. Building Usage Load


1. Available Roof Space

Approx. usable roof space: 1000 m2 Approx. minimum usage: 20 kW



Building Usage Load: Details

Hourly Power Usage Averaged for

Each Day of the Week


Hourly Averaged Plots for Each

Month, Weekdays only

Approx. minimum weekday daylight usage: 90 kW

Approx. minimum weekend daylight usage: 20 kW



System Configuration

50 kWp System


25 kWp System

0.9% difference in near shading losses



System Output

50 kWp System


25 kWp System

Morning and afternoon peaks need to be

addressed to achieve maximum savings



System Output

50 kWp System


25 kWp System

Total excess electricity: 75 kWh

Total PV electricity produced: 27 763 kWh

→ Excess negligible in comparison

Total excess electricity: 4 100 kWh

Total PV electricity produced: 54 335 kWh

→ Excess electricity is 7.5% of the total electricity

produced over this period



Scenarios Investigated

1. Building billed on the

Drakenstein 2014/2015 Bulk

Time of Use Medium Voltage

Tariff

2. Eskom Bulk Time of Use

Megaflex Tariff


50 kWp System 25 kWp System

1. Building billed on the

Drakenstein 2014/2015 Bulk

Time of Use Medium Voltage

Tariff

2. Eskom Bulk Time of Use

Megaflex Tariff

3. Building billed on Large Power

Users Small Scale Embedded

Generation Medium Voltage

tariff



Financial Assumptions


Funding scenarios 100% upfront capital funded, 50% upfront capital

funded and 100% loan funded

Capital Costs scenarios investigated R 16/Wp, R 18/Wp and R 20/Wp

Annual electricity increase over 20 years 12.2% year on year for the first 2 years, 8% for the

next 10 and then 6% for the remaining 8 years

Inflation rate 5.5%

PV production degradation Linear to 80% of original production in year 20

Project lifetime 20 years

Inverter replacement cost R 3.20 /Wp

O&M 0.35% of initial project cost annually

Depreciation Depreciated over project life time

Discount rate 5.5%

Lending Rate 10%



Feasibility Results: 25 kWp System


Scenario 1@ R 18/Wp

(Building billed on Bulk Time of Use Medium Voltage

Tariff)

Scenario 2@ R 18/Wp

(Building billed on Bulk Time of Eskom Megaflex

Tariff)

100% upfront

capital funded

50% upfront

capital funded

100% Debt

funded

100% upfront

capital

funded

50% upfront

capital funded

100% Debt

funded

Total cost over project

lifetime R 584 917.60 R 888 485.91 R 1 192 054.22 R 584 917.60 R 888 485.91 R 1 192 054.22

Project IRR 9.02% 8.35% 5.37% 6.07% 3.19% -7.85%

NPV R 170 653.19 R 84 558.71 -R 1 535.77 R 25 429.27 -R 60 665.21 -R 146 759.69

Payback period [years] 11 13 17 13 17 20+

LCOE of PV energy

over duration of project R 0.78 R 1.49 R 2.19 R 0.78 R 1.49 R 2.19

LCOE of Utility energy




100% upfront capital funded 100% upfront capital funded

100% upfront capital funded

100% upfront capital funded 100% upfront capital funded

Feasibility Results: 50 kWp System


Saved [ZAR] % of total savings

Energy Charge (used when produced) R 44 415.34

83.97%

Energy Charge (accounted for through net-

metering) R 1 575.59

Demand Charge R 8 781.99 16.03%

• The excess savings amounts to 3.6% of total energy savings

• This increase in savings is less than the cost decrease in active

energy charge (14%)

→ Since the cash flow of a project is the result of the avoided

electricity costs for this sized system and required electricity load,

positive returns are not expected.



Feasibility Results: Comparison


50 kWp 25 kWp

Scenario 1@ R18/Wp

(Building billed on Bulk Time of

Use Medium Voltage Tariff)

Scenario 3@ R18/Wp

(Building billed on Large Power

Users Small Scale Embedded

Generation tariff)

Scenario 2@ R18/Wp

(Building billed on Eskom

Megaflex Tariff)

100% upfront

capital funded

50% upfront

capital funded

100% upfront

capital funded

50% upfront

capital funded

100% upfront

capital funded

50% upfront

capital funded

Total cost over project

lifetime R 1 169 835.20 R 1 776 971.82 R 1 173 135.20 R 1 782 497.99 R 584 917.60 R 888 485.91

Project IRR 8.20% 6.96% 7.24% 5.29% 9.02% 8.35%

NPV R 256 444.10 R 84 255.14 R 161 178.48 -R 11 641.84 R 170 653.19 R 84 558.71

Payback period [years] 11 13 12 15 11 13

LCOE of PV energy over

duration of project R 0.83 R 1.59 R 0.79 R 1.51 R 0.78 R 1.49

LCOE of Utility energy




Lessons Learnt

For this specific building it is more feasible to discard excess energy and

remain on the bulk time of use tariff rather than moving over to the

embedded generation tariff because of:

• The roof size and shading constraints

• The required load of the building

In order for the net metering option to make a good business case the

system needs to be significantly larger then the required day time load.

Manage the load of the buildings, always the first step is to put energy

efficiency measures in place

PV system will also help create awareness and set a good example for

others to follow




Thank you Karin Kritzinger & Imke Meyer

22nd April, 2015

www.panda.org

© 2010, WWF. All photographs used in this presentation are copyright protected and courtesy of the WWF-Canon Global Photo Network and the respective photographers.

Drakenstein Bulk Time of Use

Medium Voltage Tariff 2014/2015


Charge Value

Fixed Charge R 1 296.00

Demand Charge per kVA R 44.00

Access Charge per kVA (12 months) R 37.00

Active Energy Charge

High demand season

[Jun-Aug]

Low demand season

[Sept-May]

Peak [R/kWh] R 1.853 R 1.1369

Standard [R/kWh] R 0.7778 R 0.6358

Off peak [R/kWh] R 0.4463 R 0.3947

Reactive Energy per kVArh R 0.0200



Drakenstein Large Power Users

Small Scale Embedded Generation

Medium Voltage Tariff 2014/2015


Charge Value

Fixed Charge R 1 495.00

Demand Charge per kVA R 52.00

Access Charge per kVA (12 months) R 44.00

Active Energy Charge High demand season

[Jun-Aug]

Low demand season

[Sept-May]

Peak [R/kWh] R 1.5924 R 0.9771


Off peak [R/kWh] R 0.3836 R 0.3392

Reactive Energy per kVArh R 0.0200



Eskom Time of Use Megaflex (local authority)

Tariff 2014/2015


Charge Value

Service charge R/Account/day R 2 813.83

Administration charge R/POD/day R 89.86

Transmission network charge per kVA R 5.73

Network access charge per kVA R 4.12

Network demand charge per kVA R 7.62

Urban low voltage subsidy charge per kVA R 10.09

Reliability service charge per kWh R 0.0027

Electrification and rural network subsidy

charge per kWh R 0.0559

Active Energy Charge High demand season

[Jun-Aug]

Low demand season

[Sept-May]

Peak [R/kWh] R 2.2224 R 0.7249


Off peak [R/kWh] R 0.3656 R 0.3165

Reactive Energy per kVArh R 0.1010 R 0.00



Electricity Building




Civic Centre




1 Market Street




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