SA mulls giving credits for solar power

[Nod]

Source: News24

South Africa’s energy regulator is looking at a framework that would enable homes and businesses to receive credits for feeding surplus power they generate from rooftop solar panels back into the constrained electricity grid.

“There is growing interest from South African electricity customers to install rooftop photovoltaic systems in order to reduce their electricity bill and supplement their consumption,” the Pretoria-based National Energy Regulator of South Africa said in a draft discussion paper to formulate its position on principles, licensing and conditions for installation of small-scale renewable embedded generators.

The document was published on its website and dated 10 December.

Credit programmes

The introduction of such a plan means South Africa, whose sole power utility is struggling to meet demand in the continent’s second-biggest economy, would be emulating countries such as Germany, Spain and the US, which have had small-scale renewable generation that included feed-in tariffs or credit programmes through banks.

“Their governments also securitised the tariff by government guarantees, which is something that the South African government cannot engage in at this stage with so many programmes where guarantees are currently offered,” the paper said.

South Africa has so far procured about 3 900MW of capacity through three competitive rounds of bids by independent producers of renewable energy, with about $10bn invested.

That already exceeds the 3 725MW initially sought from five bid windows. An additional 3 600MW will be sought, the Department of Energy said on 12 December.

Generation forecast

The country’s integrated resources plan for 2010-30 estimates both residential and commercial photovoltaic embedded generation could reach as many as 22.5GW by 2030, the regulator said in its discussion document.

In 2011, Nersa approved conditions where generators of as many as 100KW are registered and allowed to sell electricity to municipalities. It proposes that this be raised to 500KW.

Tariff options proposed by the regulator included enabling customers to reduce bills by feeding excess usage to the grid at a retail price, with a feed-in tariff paying a different rate for selling energy to that for consuming it.

A net-metering option would see customers billed on consumption minus the amount generated.

Billing considerations

Net-energy metering, measured in kilowatt-hours, will be used instead of rand, the regulator said.

Each month, the electricity that small-scale generators produce in excess of their own consumption will be sent back to the grid and credited to their accounts for up to one yearly billing cycle, after which any remaining credit is forfeited to the distributor, it said.

“This reduces any incentive for the customer to oversize generation with respect to load.”

South Africa’s electricity rates will rise an average 13% from April, more than the 8% planned, to help the state-owned utility Eskom recover R7.8bn of unbudgeted costs incurred in the three years through March 2013, Nersa said in October.

The government will raise R20bn by selling shares in listed companies, stakes in state-owned entities and real estate to help the company finance a R225bn cash flow shortfall for the five years through March 2018.

 

[Nerfherder]

Good time to be importing pannels

 

[envo]

Good time to be importing pannels

No need to import, they're locally produced with an SA patent that sees a reduced size in panel with more generating capacity.

What worries me is the reduction of incentive by doing a 1 year billing cycle thing. Other countries pay you if you generate more than you use. They want the electricity for free now? But we need to foot the bill for the panels? If there's no monetary incentive to put up panels other than getting a measly credit that expires after 1 year, then why even bother.

In countries like Germany there are farmers who converted their farms to generate and sell electricity. What about job creation? Isn't the government interested in the opportunity?

 

[Nerfherder]

No need to import, they're locally produced with an SA patent that sees a reduced size in panel with more generating capacity.

What worries me is the reduction of incentive by doing a 1 year billing cycle thing. Other countries pay you if you generate more than you use. They want the electricity for free now? But we need to foot the bill for the panels? If there's no monetary incentive to put up panels other than getting a measly credit that expires after 1 year, then why even bother.

In countries like Germany there are farmers who converted their farms to generate and sell electricity. What about job creation? Isn't the government interested in the opportunity?

Also don't get that.
You can also make money but it's just capped at the amount you would normally spend on electricity.
The reason is probably that they have so little controll over the grid that they need to limit the risk on their side.
For example, if we all get panels and start generating all this excess they will have to start paying us, while our neighbours have illegal connections and eskom will be paying us to give them free power

 

[itareanlnotani]

Its all bad news -

In 2011, Nersa approved conditions where generators of as many as 100KW are registered and allowed to sell electricity to municipalities. It proposes that this be raised to 500KW.

Basically - NERSA doesn't want 3rd party generation. This again, actively discourages smaller-medium scale generation.
The hey look we're going green with Solar and Wind etc is a hand wave. They only allocated 3900MW so far for renewable energy.
They ummed and ahhed, and kept phase 3 of the renewable energy bid tenders open for more than a year after the close date.
We could have had more power online already if they had allocated it. Phase 4 should have been signed and done by now, but they're pushing that back too.

We could open that up generation completely, and encourage large scale solar farms, CSP, Wind or other renewables that are far cleaner than say Nuclear, or Coal. But..., less kickbacks than say Nuclear, or fracking so short sighted greed is the option of choice, never mind that its destroying/polluting the planet to do so.

The end result - we wait longer for power stations, and pay more for electricity. The private sector can and has tendered to provide electricity at far lower cost than Eskom costs for generation.
Currently Eskom is running turbine gas generators at a cost of R3 / kw, to cater for demand.
Phase 3 of renewable generation the bids were 68c
They haven't invested in any new power stations (except the mythically overbudget Medupi, and Kusile).
Kusile at least is a sensible option - its a storage solution, which is where the future of electrici

Net-energy metering, measured in kilowatt-hours, will be used instead of rand, the regulator said.

Each month, the electricity that small-scale generators produce in excess of their own consumption will be sent back to the grid and credited to their accounts for up to one yearly billing cycle, after which any remaining credit is forfeited to the distributor, it said.

Again, not consumer friendly.

Cape Town for example, is actively anti solar with their pricing, policies, and red tape.
Lots more detail on that here -
http://greenaudits.co.za/residential-renewable-energy-generation-for-cape-town/

If they wanted to encourage solar, NERSA could put in laws mandating feedback policies for self generation (ie solar on house roofs), and encourage generation. At the moment, both the government and the municipalities are anti-solar.

 

[Arthur]

I've been exporting solar PV for over two years now as part of a pilot project fully approved by my local energy supplier.

My 12kW array with 32 batteries is managed by an intelligent grid-tied inverter and uses the grid as an energy store, exporting during the day and importing at night. Batteries only kick in if grid power is cut and solar PV is insufficient, such as power cuts at night (extremely rare).

To keep the municipal Finance Dept happy we currently work on a monthly nett metering billing cycle. My four-quadrant meter reports monthly imports and exports, and for billing purposes the difference is reported to Finance, with the proviso that in any given month the nett usage cannot be less than zero even if I've exported more than imported.

Speaking from experience, the proposal to have an annual rather than monthly nett metering billing cycle for SSEGs is good news indeed.

On a monthly basis, I'm currently a nett exporter in summer months and a nett importer in winter. Being on a monthly cycle means I've paid for around 4400 more units than I've actually used. Moving to an annual nett consumption model would be in my favor, because I could nett off winter imports against summer exports.

 

[ambo]

I think that the conservative approach to the feed-in tariffs is a good thing. Feed-in by micro power producers could definitely solve some of the short term crunch that we're experiencing but it causes many long term problems.

Germany was mentioned in the article as the model to emulate but the have been reviewing their policies since the beginning of 2014 when major challenges started appearing.

A 1:1 feed-in tariff actually causes the retail cost of electricity to go up as fewer people are funding transmission and distribution costs. Germany's power price is way higher than ours by many 100's of percent.

Supply and demand also becomes a huge issue to manage when significant portions of your generation capacity are solar. And no - the spread between east and west coasts is not sufficient to mitigate this.

 

[Arthur]

From a national electricity policy and technical viewpoint I fully agree with ambo. Solar PV is seriously problematic, as the experience in Germany shows - their grid is teetering. We still need large base load generators.

 

[Paul_S]

At the moment, both the government and the municipalities are anti-solar.

Of course they are!

Firstly municipalities make a lot of money off electricity sales.
Looking at the City of Tshwane's 2013 financial statement one can see that 37% of all revenue gather by the municipality is from electricity sales.
The second biggest revenue generator is rates and taxes at 18% while water only makes up 10% of their revenue.
If people start self provisioning how will the municipalities make up the short fall other than increasing the rates and taxes and price of water?

Secondly if people start self provisioning how will the government continue to provide "free" electricity to 80% of Soweto and all the other free-riders across the country?

What neither realise is that it it just a matter of when and not if it will happen even without any exporting of power from a consumer back into the electricity grid.

 

[Fudzy]

Of course they are!

Firstly municipalities make a lot of money off electricity sales.
Looking at the City of Tshwane's 2013 financial statement one can see that 37% of all revenue gather by the municipality is from electricity sales.
The second biggest revenue generator is rates and taxes at 18% while water only makes up 10% of their revenue.
If people start self provisioning how will the municipalities make up the short fall other than increasing the rates and taxes and price of water?

Secondly if people start self provisioning how will the government continue to provide "free" electricity to 80% of Soweto and all the other free-riders across the country?

What neither realise is that it it just a matter of when and not if it will happen even without any exporting of power from a consumer back into the electricity grid.

37% of revenue gained does not highlight the amount the electricity has cost them.

 

[Paul_S]

37% of revenue gained does not highlight the amount the electricity has cost them.

Yes, it's not profit but if you're buying in bulk from Eskom at less than 70 or 80 cents per kWh and selling it to consumers at R1.13+ per kWh it's a nice cash cow.
The fact that Tshwane has a lot of bad creditors and loses electricity via technical and non-technical (theft) means doesn't help though. R622.7 million in electricity loses for the past financial year.

 

[oober]

I actually quite prefer it that you cannot accumulate credits for longer than a year. It prevents customers from installing massive arrays in residential areas which would require infrastructure to be upgraded to handle larger currents.

It also helps to not create a scenario where SA grid becomes unstable and unpredictable with huge excess during the day and load shedding at night due to base load shortages.

Rather take the safe route than end up like Germany with their ridiculous prices and taxes...

Lets just hope that 2015 is the year of change!

 

[itareanlnotani]

I actually quite prefer it that you cannot accumulate credits for longer than a year. It prevents customers from installing massive arrays in residential areas which would require infrastructure to be upgraded to handle larger currents.

Thats not something that would likely happen - there is a limit to roof size, and excess current would be easily catered by draw from neighbouring houses. There is also the more realistic barrier called cost. Inverters cost money. Panels cost money. Most people will install reasonable sized systems which are close to what they use.

There is already a large scale solar install in Observatory at the office park there. Strangely enough solar production co-incides quite nicely with usage, which is where most of our generation requirements lie. Don't discount the 9-5..
They use all of their generation in the park daytime - a/c's etc are all powered from solar.

It would actually alleviate stress on transformers, as *less* current would be passing through them.
Its only when you start seeing 30-50% takeup of solar in a community that you start seeing issues.
There are studies on that, I'm not pulling numbers out of my rear


A key case study would be Hawaii, where a high takeup of solar has led to that happening, and their electrical provider vetoing new installs from feeding back into the grid. Conversely, this has also encouraged more people looking into home scale storage solutions (driving the price down), as is happening in Germany, and Hawaii now.

Storage is almost at the point where it makes sense - Lithium storage is at price parity with Lead Acid (when compared at required KW values - eg 1.5x requirements for Lithium, vs 3x requirements for Lead Acid per usable KW, and lasts 5-6x longer.
eg 10KW of Lithium usage, you only need 15KW of batteries, vs Lead Acid where you need 30KW to be able to use 10KW at reasonable DoD / lifetime rates.


I'm not sure why people keep pointing to Germany as a bad thing. They've essentially weaned themselves from Coal quite successfully - their main issues now are adding more storage, and mixed generation. There are always teething problems changing from something to something else - they've had remarkably few of them. Most of them appear to be the coal producing/polluting plants being shutdown or mothballed, and the real costs of dirty coal coming to the surface. Clean air is just as important to some of us as power is to others. We only have one planet..
Lastly, my german friends can't remember the last time they had a power outage, whereas I on the other hand can point to one or two or *more* a month in recent months.

 

[itareanlnotani]

Firstly municipalities make a lot of money off electricity sales.
Looking at the City of Tshwane's 2013 financial statement one can see that 37% of all revenue gather by the municipality is from electricity sales.
The second biggest revenue generator is rates and taxes at 18% while water only makes up 10% of their revenue.
If people start self provisioning how will the municipalities make up the short fall other than increasing the rates and taxes and price of water?

I should point this out -
Electricity pricing was never meant to be an income revenue generator for municipalities.
That they are using it as an effective tax is not something that was ever intended to happen, nor should it be the consumers fault.


They are deeply aware of the coming issues though, and have been fighting tooth and nail against solar as I have stated.
The issue is that self generation and storage is getting cheaper by the year, and Eskom/ Muni pricing is increasing year on year.
Amortised over 10 years, its roughly the same price to install a complete solar generation + storage system right now.
Not many people have the money for that, but given the price increases likely to happen in the next few years (my predictions are 15% per annum for the next few years), its going to reach more peoples pockets sooner rather than later.


Reading -
http://www.sustainable.org.za/resource.php?id=3
http://www.bdlive.co.za/business/en...iffs-impedes-growth-of-small-scale-generation

 

[ambo]

I'm not sure why people keep pointing to Germany as a bad thing. They've essentially weaned themselves from Coal quite successfully - their main issues now are adding more storage, and mixed generation. There are always teething problems changing from something to something else - they've had remarkably few of them. Most of them appear to be the coal producing/polluting plants being shutdown or mothballed, and the real costs of dirty coal coming to the surface. Clean air is just as important to some of us as power is to others. We only have one planet.. Lastly, my german friends can't remember the last time they had a power outage, whereas I on the other hand can point to one or two or *more* a month in recent months.

Where do you get your data from? The last report I read (from mid-2014) indicated that this situation was far less rosy.

The cleaner nuclear power stations are the ones being mothballed as they are completely unable to provide the peaking demand curves to fill in the gaps in the solar profile. The coal fired power stations are running much more than they have in ages and also much less efficiently as the have to continuously ramp up and down every 24 hours which is not something they do well.

The real shocker is that they've noted increases in CO2 levels in Germany since the solar policy was put in place. Clearly something is not right. In a desperate attempt to maintain grid stability and avoid outages - their power supply is now more dirty than it was 5 years ago.

Never mind the fact that their electricity price is between 260% and 450% the price of ours.

 

[itareanlnotani]

Short answer as its 3am here - forget Germany, its a complicated situation, and can be read in many ways.

Solar output is quite predictable, as is Wind. What we have seen in Germany is that renewables cause havoc with the profitability of coal plants long before there are issues of technical grid integration. Nuclear is typically used for baseload, not peaking. Coal is also used for baseload, not peaking.
Diesel and natural gas are mainly used for peaking. Power is not an eggs in one basket kind of situation. You have a mix of generation that caters for different requirements - short term load, base load (although thats a misnomer in itself), peak loading, grid stabilization etc etc.

The lesson of Germany is that the introduction of very large solar and wind supply does not allow the retirement of wide swathes of coal and gas. Coal and gas may run at lower usage rates, but they or some kind of dispatchable source must remain by and large at the ready if there is insufficient storage in place. The point there is storage. Storage storage storage lest I repeat myself. Storage at a consumer level is reaching the tipping point to mass takeup, especially in Germany, and in places like Hawaii, where the it makes sense (mostly where incumbents legislate against Solar, or prices are high enough that Solar + Storage is financially viable).

http://www.greentechmedia.com/artic...fficiency-measures-to-offset-growing-coal-use
http://www.greentechmedia.com/artic...the-Power-Grid-Lessons-from-Germany-and-Japan
http://energytransition.de/2014/12/what-german-energy-supply-looks-like/

As for your CO2 , its a temporary thing -
Some key points - “There is a much stronger correlation between falling gas use and rising coal use,” Roseland points out. He attributes the shift from natural gas to coal to high gas prices, low coal prices, and demand for low-cost power exports to other European countries.

Coal usage has dropped dramatically which can be seen here -


and green house gas should be down for 2014 (final figures not released yet)




Same for the grid - the fearmongering about the evils of solar hasn't happened, and its looking like the grid can take it just fine, which brings us to our next subject - Australia.

1 in 5 australian households have gone solar. Well, strictly speaking 15/100 if you look at strict PV only, so 1 in 7 people now has a solar install. Thats something we could do, and should do.
We would then have excess generating capacity, and Eskom would not need to run diesel or gas turbines at R2+ / kw to provide baseload, as they are doing now.

http://www.greentechmedia.com/articles/read/one-in-five-australian-households-have-gone-solar

Sure, Australia has an excellent transmission infrastructure, which hasn't hurt, but they've done the right things, even if their current PM is doing the opposite with his policies, and his Lima meeting fubars.


Back to Germany, the http://energytransition.de site is quite good for a read. They even cover us - http://energytransition.de/2012/10/regional-perspectives-south-africa/

I agree with pretty much everything they wrote about us.

 

[richjdavies]

The fact is that Germany's Feed in Tariff system has caused:
1. Massive price increases for every user domestic and commercial --> this is basically a scheme for pushing money from energy users to LAND owners... FYI - Feed in Tariffs are paid for GENERATING electricity, you also get to sell the electricity or use it for free. The Feed in Tariff for Germany started off at €0.54/kwh in 2004 (R7.50!) have fallen down to €0.13/kwh (R1.80) now
2. Increases in CO2 usage, because they are now burning cheaper coal (Lignite) -- that graph higher up shows this, the 2014 is a guess and will likely be wrong.

This is obviously not what they planned.

What would SA want from micro-generation?
- Grid Stability? Solar won't help during the traditional peaks (Winter, night & early morning); I guess it would help right now... i.e. excess could be used to fill-up the pump storage etc -- i.e. would at the very least reduce the drag on the diesel generators
- Prices? It would certainly be more expensive than the average. Remember Eskom charges less than R0.50 for summer mid-day usage.

However, micro-generation might be MUCH cheaper than the kind of scams that Eskom gets involves with (e.g. Medupi) or the renewable ones (e.g. anything in Phase 2 Solar is being paid R1.645/kWh)

I don't understand why if they couldn't just offer people the same as the IPPs?

Maybe we could all club together and 'offer' it to Eskom in the next round?

 

[itareanlnotani]

The other facts are:

They've encouraged mass takeup of solar and other renewable, and more importantly, storage is becoming viable due to the size of the user base (although storage going to be something thats more visible in the next 5 years vs now as its only just becoming viable).

Cheaper coal vs gas pricing in Germany has led to increased coal use, but thats not due to solar, its due to high gas prices vs coal.
Its a short term effect, and will decrease as additional green capacity and storage comes online.

http://energytransition.de/2014/12/what-german-energy-supply-looks-like/

http://energytransition.de/2014/12/german-government-passes-climate-package/


They're planning long term, not short term, long term this will be beneficial, even though currently its not necessarily consumer friendly.

You'll find that most German homes are energy efficient now, vs previously. High pricing encourages takeup of greener technologies and smarter use of power.

eg Its worth insulating a home, and installing double or triple glazing in Germany vs burning expensive fuel.
High prices encourage the former, rather than the environmentally unfriendly latter.
Efficiencies like those have let them reduce usage.

This is a great site which explains what they're doing and why - http://energytransition.de

 

[itareanlnotani]

The other facts are:

They've encouraged mass takeup of solar and other renewable, and more importantly, storage is becoming viable due to the size of the user base (although storage going to be something thats more visible in the next 5 years vs now as its only just becoming viable).

Cheaper coal vs gas pricing in Germany has led to increased coal use, but thats not due to solar, its due to high gas prices vs coal.
Its a short term effect, and will decrease as additional green capacity and storage comes online.

http://energytransition.de/2014/12/what-german-energy-supply-looks-like/

http://energytransition.de/2014/12/german-government-passes-climate-package/


They're planning long term, not short term, long term this will be beneficial, even though currently its not necessarily consumer friendly.

You'll find that most German homes are energy efficient now, vs previously. High pricing encourages takeup of greener technologies and smarter use of power.

eg Its worth insulating a home, and installing double or triple glazing in Germany vs burning expensive fuel.
High prices encourage the former, rather than the environmentally unfriendly latter.
Efficiencies like those have let them reduce usage.

This is a great site which explains what they're doing and why - http://energytransition.de

 

[Nod]

Here is information about solar and wind power generation in Germany for 2014.

Source website.

Some nice charts with generation stats from all sources: https://www.energy-charts.de/energy.htm