integrating SSEG in commercial and municipal distribution networks - - PowerPoint PPT Presentation

Challenges and opportunities for integrating SSEG in commercial and municipal distribution networks

by Christopher Gross, South African – German Energy Programme (SAGEN), GIZ

• As a governmental organisation, GIZ implements sustainable

development projects worldwide on behalf of the German government

• GIZ operates in more than 130 countries and employs some

20,000 staff members (with a 70 - 30% split between national and international personnel)

• In South Africa, GIZ first started in 1994 and has since

implemented projects with a total volume of more than EUR 550 million as part of the bilateral cooperation between Germany and South Africa

• The main focus of our work in South Africa is Governance

and Public Administration, HIV/AIDS, Energy and Climate

Background information on GIZ

In cooperation with:

Development of SSEG best practice with national departments, industry and municipalities

SSEG is here to stay

Local government embarking on SSEG

Elements of market development and integration

Phase I: Market development

• Finalisation of national regulation documents (DOE and NERSA).
• Introduction of a national mechanism for SSEG registration (NERSA and

distributors).

• Introduction of harmonized and transparent application and registration

processes within distributors (AMEU, SALGA, distributors).

• Introduction of technical standards and guidelines to guide SSEG industry

(SANS, NRS, PV Green Card). Phase II: Market integration

• Consideration of SSEG in national and local integrated resource planning.
• Market integration of SSEG.
• Security for SSEG investors.

Current challenges in phase I: market development

• National regulatory rules not yet finalised.
• Registration process for SSEG needs to be developed and introduced.
• Application processes within distributors are not always harmonized due to

incomplete regulatory framework, but SALGA/AMEU are coordinating.

• Distributors struggle with implementation that requires changing business

processes (including internal mandates), additional resources, and the development of SSEG knowledge.

• Customers and SSEG industry are often unaware of policies and processes

due to a lack of public communication, leading to additional bureaucracy.

• National standard landscape evolving, but still lacking important elements.

Consequences:

• 1. SSEG industry encouraged to operate outside the system leading to

increasing amount of “illegal“ non-registered systems.

• 2. SSEG industry focusses on profitabale commercial and industrial

self-consumption projects without feeding back to the network.

Relevance

• f SSEG

registration data

National integrated resource planning (DOE) Power system

• peration

(Eskom SO) Network planning and

• perations

(Distributors) National GHG monitoring (DEA) SSEG market regulation (NERSA) Market integration (national aggregator)

Opportunities in phase I

1 Introduce SSEG registration process

Opportunities in phase I

• 1. Requirements for Embedded Generation
• 2. SSEG Supply Contract
• 3. SSEG Application Form
• 4. SSEG Commissioning Form
• 5. SSEG Decommissioning Form

http://www.cityenergy.org.za/category.php?id=5#14

2 Further develop and use harmonized application processes as developed by AMEU and SALGA.

Opportunities in phase I

3 Communicate and inform about local SSEG policies and processes and pursue non-registered “illegal“ SSEG installations (carrot-stick approach).

Opportunities in phase I

4 Finalize standards and guidelines

Grid connection (impact assessments) Equipment (inverter requirements) Installation Bidirectional metering Standard or guideline NRS 097-2-3 (2014) SA RPP Grid Code v.2.9, NRS 097-2-1 (2017) SANS 10142-1- 2 NRS 049 (2016) Challenges Covers only installations up to 350 kVA. Simplified criteria is exhausted rather quickly. Can only be performed with knowledge of all SSEG capacity connected to the respective grid area. Requirements for A3 plants (100 kW-1MW) very high. Currently under development. Unclear liability issues during sign-off of SSEG systems. Really valuable as it promotes standardisation and avoids vendor lock-in. But only covers smart meters which are more expensive and require a communication system to be established. Integration with municipal billing processes can be difficult. Opportunity Very good framework to kick-start SSEG. Need for a complementing guideline to perform detailed grid impact assessments. Challenge: SSEG and network data NRS provides good framework for SSEG. Harmonize NRS with SA RPP grid code. Once finalized a thorough framework around COCs could be created, solving the liability issues. Non-smart, cheaper bi- directional meters are also available. Find balance between required functionality,

• ther benefits from smart-

meters and nice-to-have add-ons.

Opportunities in phase I

5 Training and compliance PV Industry + Embrace PV Green Card quality label + Expand on the 10 training centres, 2 assessment centres, and 100 registered companies + Integrate with QCTO qualification landscape

Distributors

+ Develop utility oriented SSEG training + Integration with municipal processes, make part of the mandate of distributor employees + GIZ-DOE-SALGA training support programme + Opportunity for better collaboration with PV industry (merging of municipal and industry processes)

Deadline to apply: 7 November 2018

http://sagen.org.za/support-for-municipalities

Manage the disruption! (more often referred to as the „revenue-loss debate“)

Challenges in phase II: market integration

Regulate two elements: Self-consumption:

• Reduced retail sales

(also including lost collection of cross-subsidies, revenue margins, taxes etc)

• more difficult to regulate

Feed-in:

• Buying of excess electricity at

predetermined price

• easier to regulate

Eskom Generation

• Energy
• Capacity

REIPPPP Generation

• Energy

Eskom Transmission

• Single Buyer
• System
• peration

Energy Intensive Users

• Industrial
• Mining

Eskom Distribution Distributors (Municipalities) End users

• Residential
• Commercial
• Agriculture
• Rail

End users

• Residential
• Commercial
• Agriculture
• Rail

87 TWh 32 TWh 78 TWh Export

• Utilities
• End users

across the border

15 TWh 45 GW 4 GW (SS)EG < 10 MW

• Energy

0.4 GW

Challenges in phase II: market integration

Eskom Generation

• Energy
• Capacity

REIPPPP Generation

• Energy

Eskom Transmission

• Single Buyer
• System
• peration

Energy Intensive Users

• Industrial
• Mining

Eskom Distribution Distributors (Municipalities) End users

• Residential
• Commercial
• Agriculture
• Rail

End users

• Residential
• Commercial
• Agriculture
• Rail

32 TWh 78 TWh Export

• Utilities
• End users

across the border

15 TWh 45 GW 4 GW (SS)EG < 10 MW

• Energy

0.4 GW SSEG is perceived by Eskom clients as an attractive and cheaper alternative for sourcing energy 87 TWh

Challenges in phase II: market integration

Eskom Generation

• Energy
• Capacity

REIPPPP Generation

• Energy

Eskom Transmission

• Single Buyer
• System
• peration

Energy Intensive Users

• Industrial
• Mining

Eskom Distribution Distributors (Municipalities) End users

• Residential
• Commercial
• Agriculture
• Rail

End users

• Residential
• Commercial
• Agriculture
• Rail

Export

• Utilities
• End users

across the border

15 TWh 45 GW 4 GW (SS)EG < 10 MW

• Energy

0.4 GW 87 TWh – X TWh 32 TWh 78 TWh – Y TWh

Challenges in phase II: market integration

SSEG is perceived by Eskom clients as an attractive and cheaper alternative for sourcing energy

Eskom Generation

• Energy
• Capacity

REIPPPP Generation

• Energy

Eskom Transmission

• Single Buyer /

Aggregation

• System operation

Energy Intensive Users

• Industrial
• Mining

Eskom Distribution Distributors (Municipalities) End users

• Residential
• Commercial
• Agriculture
• Rail

End users

• Residential
• Commercial
• Agriculture
• Rail

87 TWh 32 TWh 78 TWh Export

• Utilities
• End users

across the border

15 TWh 45 GW 4 GW (SS)EG < 10 MW

• Energy

0.4 GW

Challenges in phase II: integration of SSEG feed-in

1 General

• Allow all market participants to benefit from SSEG by creating fair and open processes.
• Capacitate national and local institutions in regulating the market integration of SSEG.
• Communicate clearly on the change in the energy sector (remove revenue debate as a

discussion topic). Target and inform utility leadership. 2 Market integration of SSEG feed-in

• Encourage feed-in of SSEG electricity rather than self-consumption.
• Have SSEG operators sell excess feed-in at a (regulated) market-oriented price (later to a

national aggregator) and develop suitable contractual arrangements by adjusting the PFMA/MFMA. 3 Market integration of SSEG self-consumption

• Consider SSEG in national and local integrated resource planning in order to avoid
• verbuilding of generation capacity.
• Perform Cost-of-Supply studies and ringfence grid operation costs from energy supply costs.
• Based on COS: Set cost-reflective retail tariffs for SSEG customers including a mix of fairly

allocated fixed and capacity charges to recover network operation costs (NERSA approved).

(see for example SAGEN - City of Tshwane case study: http://www.cityenergy.org.za/uploads/resource_431.pdf )

Opportunities in phase II (up for discussion)

• Integrating SSEG in commercial and municipal distribution networks with a

phased approach.

• Phase I (market development) is currently underway with legislation being

developed and implemented.

• Phase II (market integration) requires further discussion and an analysis of

the whole electricity system. Efficient integration should benefit every market participant.

• One next step could be to develop and agree on a step-by-step plan for the

market integration of SSEG.

• Implementation of the plan would require step-by-step regulatory changes on

the national and local level.

• Training and capacity building will be required.

Conclusion

BACKUP

Component B:

Small-scale embedded generation (SSEG)

South African – German Energy Programme (2018-2020)

Component A:

Large-scale grid-connected RE

R e n e w a b l e E n e r g y ( R E ) Component D:

Implementation of energy efficiency technologies

Component C:

Energy management systems in municipalities

E n e r g y E f f i c i e n c y ( E E )

Objective: National and local stakeholders use improved framework conditions for RE and EE

• Collaboration with

Eskom

• Grid access codes
• Tx planning and
• perations
• Dx planning and
• perations
• Helpdesk

Renewable Energy Activities under SAGEN-3

Grid- and system integration of vRE

• Harmonized municipal

implementation guidelines (AMEU)

• Municipal training and

support programme (SALGA)

• Grid impact

assessment support

• Technical standards

(NRS/SANS)

• PV Green Card

Programme (SAPVIA)

• Municipal procurement
• f SSEG assets

Integration of SSEG at distribution level (ERA schedule 2)

• Cost of Supply

regulation

• Wheeling and grid

access regulation

• Municipal energy

planning

• Supply contract

arrangements and compensation schemes

• Follow up of SALGA

energy summit

• National SSEG

registration mechanism Electricity sector regulatory framework development & reform

• Coal transition
• Social transformation

Structual change in the energy sector

Partners: DoE, IPP-Office, Eskom, NERSA, SALGA, AMEU, municipalities, RE industry associations

SSEG development in South Africa