challenges and opportunities for integrating sseg in ... · challenge: sseg and network data nrs...

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 of SSEG

registration data

National integrated resource planning

(DOE)

Power system

operation

(Eskom SO)

Network planning and operations

(Distributors)

National GHG

monitoring

(DEA)

SSEG market

regulation (NERSA)

Market integration (national

aggregator)

Opportunities in phase I

1 Introduce SSEG registration

process


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.




3 Communicate and inform about local SSEG policies and processes

and pursue non-registered “illegal“ SSEG installations

(carrot-stick approach).


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,

other benefits from smart-

meters and nice-to-have

add-ons.


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

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


Eskom

Transmission • Single Buyer

• System

operation

Energy

Intensive

Users • Industrial

• Mining

Eskom

Distribution

Distributors

(Municipalities)

End users • Residential

• Commercial

• Agriculture

• Rail


• 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


Eskom


• Capacity

REIPPPP


Eskom


• System

operation

Energy

Intensive


• Mining

Eskom

Distribution

Distributors

(Municipalities)


• Commercial

• Agriculture

• Rail


• Commercial

• Agriculture

• Rail

32 TWh

78 TWh


• 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


Eskom


• Capacity

REIPPPP


Eskom


• System

operation

Energy

Intensive


• Mining

Eskom

Distribution

Distributors

(Municipalities)


• Commercial

• Agriculture

• Rail


• Commercial

• Agriculture

• Rail


• 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


SSEG is

perceived

by Eskom

clients as

an attractive

and cheaper

alternative

for sourcing

energy

Eskom


• Capacity

REIPPPP


Eskom

Transmission • Single Buyer /

Aggregation • System operation

Energy

Intensive


• Mining

Eskom

Distribution

Distributors

(Municipalities)


• Commercial

• Agriculture

• Rail


• Commercial

• Agriculture

• Rail

87 TWh 32 TWh

78 TWh


• 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

overbuilding 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)

http://www.cityenergy.org.za/uploads/resource_431.pdf



• 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

operations

• Dx planning and

operations

• 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

of 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

challenges and opportunities for integrating sseg in ... · challenge: sseg and network data nrs...

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