Small and Micro Generation

Valmon Muller

Senior Advisor IPP’s

Date: 2016-04-14

Other

1 %

Renewables

21 %

4 %

Peaking - OCGT8 %

Mid-merit Gas

3 %

Baseload - Import

5 %

Baseload - Nuclear

13 %

Baseload - Coal

46 %

The (policy-adjusted) IRP leads to a new 2030 capacity mix (national and energy planning process)

40,996 MW

11,400 MW

4,109 MW

2,370 MW

7,330 MW

3,512 MW

18,925 MW

890 MW

1 %5%

6%0%

3%

4%

81%

• The forecasted peak demand will

grow from 38.9 to 62 GW by

2030. Total 81.3 GW of

Generation capacity is required

by 2030 (revised IRP, 2013),

growth mostly from renewables

• DoE is driving the growth of

Renewable Energy and other

generation (e.g. Procurement

Programmes)

• DoE is also encouraging power

generation by other IPP means

(Wheeling, Self-Generation etc.)

Peaking – Pumped Storage, Hydro

2030

2010

Source: IRP2010 published in 2010 < www.doe-irp.co.za >

3

GAU facilitation role of the SMG framework

Pricing (costing) and Contracts

Process excellence: Application through to Operations

Billing and Cost recovery (Payments)

Technical (Eskom Group Techn and Dx)

Operations

IDM & Renewable Integration

• Use GAU to manage service

relationship, stakeholder

management and interfaces related

to SMG’s in the interim until the

framework is finalised.

• Define and implement technical rules

for evaluation, connection and

operation.

• Develop an optimised SMG IPP

connection process

• Define operations process for SMG

• Resolve pricing policy and cost

recovery issues

• Build IPP intelligence framework and

capability (inside and out)

• Establish resource capability to

integrate SMG’s across the business

Establish clear accountability

Improve Eskom’s image and reputation in dealing with SMG’s

Achieve non-discriminatory grid access for SMG’s

Effective organization with process excellence in SMG connection and operations

Communication

Area To Be Addressed AmbitionMeasures

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Eskom process, related to the Eskom Grid Access Unit role

Quotation, Contracting

and Connection of

IPPs

Consultation with, and advising IPPs

Operation of IPPs and

generators

Manage service relationships with IPPs and generators

Facilitate Grid Access for generators

The role of Eskom Grid

Access Unit for Generators

• Enabling and facilitating generators (including IPPs) grid access, giving effect to commercial options

requires a service relationship, interface management and communication.

• Managing and integrating the development of appropriate standards, processes, frameworks.

• Facilitating various connection, grid access and commercial options.

• Pricing frameworks for generators (e.g. costing of connection and “wheeling”).

• Developing technical capability for integration of the IPPs and renewable generators.

• Enabling process and system capability, and facilitation thereof, to ensure grid access.

• Collecting sufficient data and information, to effectively facilitate, enable, plan and support.

• Ensuring long-term viability of the Eskom approach.

Application

• All applicants must complete Part 1 of the

Eskom application form in order to register

a project and obtain a invoice for the Cost

Estimate Letter - (High-level basic

information required).

• This is applicable to both Distributions and

Transmission applications

• Application will be submitted firstly to

Distribution and registered in ACNAC

(which is a Distribution project scheduling

tool for processing)

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Customer category solutions

SMG Category – less than 1MW

Small power users Large power users

Prepaid Dedicated

Eskom

Transformers

Distributed

LV feeders

LPU 1: Eskom

supply at LV –

SMG at LV &

less than

100kW

LPU 3: Connected at MV – SMG at LV or MV

• No solution in

this phase

• Risk factor

low

• No solution in

this phase

• PILOT

PROJECT

• YES

• Use MACRO connection

process

• Provide options for:

1.Operating in island

mode

2.Convert supply to

MV for dedicated

transformer supplies

and use LPU 3

process

LPU 2: Eskom

supply at LV –

SMG at LV &

greater than

100kW

• Issue letter for

disconnection

and meter

changed out to

electronic

meter (if not

already done)

• NO

• Use INTERIM connection

process

3. Grid Connection Process for Generators including IPPs

SubmitPart 1 of

App. Form

Eskom

Generators

Provide Cost

Estimate Letter

Produce prelim design

and cost project

ProvideEIA

approval

Issue Budget Quote

Perform /ApproveDetailedDesign

ProcessPart 1 of App. Form

Accept Budget Quote

Perform Detailed Design (Self Build

Option)

Request EIA for project

Accept Cost

Estimate Letter & Submit

Part 2 of App. Form

1

2 3

4

5 6

7

8A

8B

Part 1 of

Application

Form contains

basic generator

contact details

and connection

requirements.

Application forms are

verified, captured on an

Eskom Generator system

and allocated to an IPP

Executive., upon receipt of

the CEL Fee Proof of

payment this application is

forwarded to the Network

Planning Department

A Grid or Network

Planner will assess the

network requirement of

the application. The IPP

Executive will then

compile and deliver a

Cost Estimate letter to

the IPP. The Cost

Estimate letter will

contain an estimate of

costs and timelines,

scope and quotation

fees.

On acceptance of the On acceptance of the

Cost Estimate letter

and payment, Part 2 of

the Application Form

(Detailed generator

technical information)

needs to be completed

and submitted to

Eskom.

request On receipt of request

to proceed to BQ and

payment, Eskom will

initiate preliminary

design and costing of

the project. Bidder

must have consulted

and agreed on

approach to secure

Eskom EIAs and

Servitudes.

A Budget Quote is compiled

based on the project cost, which

is delivered to the IPP. The BQ

will contain the Scope, Cost,

Timeframe and T&Cs. Eskom

BQ & and relevant agreements .

IPP accepts terms

and conditions of the

Budget Quote and

arranges payment.

Eskom will not

proceed with the

connection works

until payment is

received.

When Eskom

performs the

detailed design:,

Eskom completes

and approves the

detailed project

design.

When Generator performs

the detailed design, Eskom

approves the detailed

project design.

Grid Connection Process for Generators including IPPs (cont.)

Project Close Out (incl. Cost

Reconciliation)

Test & Commission connection

asset

Perform Detailed Design

Construct Connection Work (Self

Build Option)

Project Close out

Synchronise Network

AssetEskom

IPP

DEA

Construct Connection

Works

TestGenerator

8 9 10 11 12

The connection

work is completed. The constructed grid

connection will be tested

and commissioned by

Eskom.

The generator is synchronised to

the Eskom Grid. The constructed

IPP facility test certificates are

made available to Eskom who in

turn issues an operational

notification in writing to use the

system.

The project is

closed out, costs

reconciled and Bill

produced on the

billing system.

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SMG: some pegs in the ground

• SMGs areprivate, grid tied generation < 1MW.

• There are three distinct categories viz.

• Category 1: Medium voltage (greater than 1,000V, but less than 33,000V),

• Category 2: Low voltage (less than 1,000V) with dedicated MV/LV Eskom transformers, and

• Category 3: LV on shared LV networks.

• In June 2014, a SMG Steering Committee (SMG SC) was established by GCS Manco, and supported by EXCO Ops.

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SMG: some pegs in the ground (cont . )

• Eskom’s current stance:

• Technical options that are currently available for connection of Category 1are expensive and not always practical.

• As there are no SABS standards for connection of Category 2 and 3 types, connections would compromise safety in Dx Operations.

• Eskom has not given formal permission for connection of any of category 2 or 3, unless part of the pilot testing phase (which are category 2) (38). Many customers are not aware of these issues and this market is being aggressively driven by suppliers/installers of these types of generation.

• A bill insert (customer pamphlet) for all metered customers was issued in October 2014. The strategy of which was to empower customers with required understanding of the environment and curtail “illegal” connections being done.

Eskom Connection Agreements

• Budget Quote:

• is the basis for the costs and scope of the connection works.

• Connection and Use of System Agreement (ie. Distribution or Transmission):

• Technical : Dispatch, ancillary services

• Financial : responsibilities, price, invoicing

• Operations : ownership, events

• Legal : Liability, confidentiality, dispute resolution, force majeure, termination.

• Electricity Supply Agreement (ESA):

• Technical : auxiliary usage, temporary construction supply.

• Financial : responsibilities, price, invoicing

• Operations : ownership, events

• Legal : Liability, confidentiality, dispute resolution, force majeure, termination.

• Reconciliation Agreement / amendment to Electricity Supply Agreement if the IPP is

embedded (e.g. in a municipal network).

• For municipal connections the bidders need to contact and sign the required agreements with the relevant municipality.

• Direct Agreement

• Self Build Agreement

• Operating agreement

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Further Inputs and Questions

Thank You