Consolidated Report on the Findings of the Electricity Generation Industry Compliance Audits Conducted in 2016/17 Financial Year

Transcription

1 Consolidated Report on the Findings of the Electricity Generation Industry Compliance Audits Conducted in 2016/17 Financial Year I

2 All enquiries and correspondence to be directed to the Head of Department unless indicated otherwise by means of a formal letter signed by the Head of Department: Electricity Licensing, Compliance and Dispute Resolution. Tel : +27 (0) National Energy Regulator Kulawula House 526 Madiba Street Arcadia, Pretoria 0083 PO Box Arcadia 0007 Tel : +27 (0) Fax : +27 (0) Website : I

3 TABLE OF CONTENTS ABBREVIATIONS... III DEFINITIONS... IV EXECUTIVE SUMMARY... VI 1. INTRODUCTION AUDIT OBJECTIVES AUDIT PROCESS AUDIT METHODOLOGY SCOPE OF WORK CHALLENGES FOR THE SOLAR FARMS FACTS AND FIGURES SUMMARY OF OBSERVATIONS AND AUDIT FINDINGS ELECTRICITY GENERATION LICENCE DISTRIBUTION INFORMATION EXCHANGE CODE DISTRIBUTION NETWORK CODE THE GRID CONNECTION CODE FOR RENEWABLE POWER PLANTS DISTRIBUTION SYSTEM OPERATING CODE GENERATION MAINTENANCE STRATEGY PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS) OUTAGE MANAGEMENT ASSET MANAGEMENT REFURBISHMENT AND EXPANSION PLANS PLANT INSPECTION SCOPE OF PLANT INSPECTION ON-SITE OBSERVATIONS CONCLUSION RECOMMENDATION II

4 ABBREVIATIONS DoE DCUOSA GCR HV MW MV NERSA OEM PPA SAGC SAP Department of Energy Distribution Connection Use of System Agreement Grid Code Requirement High Voltage Megawatt Medium Voltage National Energy Regulator Original Equipment Manufacturer Power Purchase Agreement South African Grid Code System Application and Production III

5 DEFINITIONS Buyer The legal entity designated by the Minister in the Determination as the buyer of Energy from Sellers in terms of Power Purchase Agreements entered into pursuant to the Independent Power Producer Procurement Programme. Distributor A legal entity that owns or operates/distributes electricity through a Distribution System. Distribution System An electricity network consisting of assets operated at a nominal voltage of 132 kv or less. Generator A legal entity licensed to engage in the production of electricity through an electricity generation facility. Grid Code The South African Grid Code, which consists of the following documents, as approved by NERSA and updated from time to time by the Secretariat: Preamble; Governance Code; Network Code; System Operation Code; Metering Code; Tariff Code; and Information Exchange Code. It also includes the Distribution Code, which consists of the following: Distribution Code Definitions; Distribution Information Exchange; Distribution Network Code; Distribution System Operation Code; Distribution Metering Code; and Distribution Tariff Code. Licensees AE-AMD Independent Power Producer 1 (Pty) Ltd; Core Energy (Pty) Ltd; CPV Power Plant no.1 (Pty) Ltd; Droogfontein Solar Power (RF) (Pty) Ltd; IV

6 De Aar Solar Power (RF) (Pty) Ltd; Firefly 253 Investments (Pty) Ltd; Oakleaf Investments Holdings 79 (Pty) Ltd; RustMo1 Solar Farm (Pty) Ltd; Slimsun (Pty) Ltd; Solar Capital De Aar (Pty) Ltd; Sevenstones 159 (Pty) Ltd; and Scatec Solar SA 166 (Pty) Ltd. Solar Farm The licensed Photovoltaic (PV) power generation facility. System Operator A legal entity licensed to be responsible for short-term reliability of the interconnected power system, which is in charge of controlling and operating the transmission system and dispatching generation (or balancing the supply and demand) in real time. Transmission System The transmission system consists of all lines and substation equipment where the nominal voltage is above 132 kv. All other equipment operating at lower voltages are either part of the distribution system or classified as transmission transformation equipment. V

7 EXECUTIVE SUMMARY The Electricity Regulation Act, 2006 (Act No. 4 of 2006) ( the Act ), stipulates that the Regulator must enforce performance, compliance and take appropriate steps in the case of non-performance. Pursuant to Section 4(a)(vii) of the Act, all licensed entities are subject to an audit for compliance with licence conditions imposed by the Energy Regulator. The audit objectives are to assess compliance with applicable regulatory requirements, validate evidence of self-reported non-compliances, document the licensees compliance level and plans, and monitor the implementation of corrective action plans. There are approximately 150 electricity generation licensees; the state-owned entity, municipal generation, and independent power producers. The total number of licensed generation facilities consists of about 305 operational, 7 non-operational or decommissioned and 27 new-build facilities. The total capacity is apportioned as follows: operational capacity is about MW, decommissioned capacity is 1 058MW and capacity under construction equates to MW. The selection criteria for the representative sample of generation facilities audited is based on: the type of licensee, for example municipal generators may be audited together so as to establish common practices and challenges; information submitted to NERSA through G-forms, production figures or any other forms; the audit cycle in terms of the compliance framework; the power contribution or impact of the generation facility on the national grid; research or data collected through desktop monitoring or media; and a mixture of age, type of technology and location. The twelve licensees that were audited in the 2016/17 financial year operate Photovoltaic (PV) solar farms and supply power to the grid. All licensees are part of the Department of Energy (DoE) Renewable Energy Independent Power Producer procurement programme, which was initiated by the Ministerial Determination issued by the Minister of Energy on 02 July Table 1 shows a list of licensees that were audited. VI

8 Table 1: List of licensees audited for 2016/17 financial year Licensee Solar Farm Name Contracted Capacity in MWh AE-AMD Independent Power Producer 1(Pty) Ltd Greefspan PV Power Plant Audit Date September 2016 Core Energy (Pty) Ltd Witkop Solar Park July 2016 CPV Power Plant no.1 (Pty) Ltd CPV Power Plant October 2016 No 1 De Aar Solar Power (RF) (Pty) De Aar Solar Power August 2016 Ltd Droogfontein Solar Power (RF) Droogfontein Solar August 2016 (Pty) Ltd Power Firefly 253 Investments (Pty) Ltd Letsatsi Solar PV July 2016 Power Station Oakleaf Investments Holdings 79 (Pty) Ltd Lesedi PV September 2016 RustMo 1 Solar Farm (Pty) Ltd RustMo1 Solar Farm September 2016 Scatec Solar SA 166 (Pty) Ltd Kalkbult October 2016 Sevenstones 159 (Pty) Ltd SlimSun (Pty) Ltd Solar Capital De Aar (Pty) Ltd Aries Solar PV Facility Slimsun Swartland Solar Park Solar Capital De Aar September June August 2016 The two-fold audit included a compliance assessment and plant inspection. The audited licensees are in compliance with the licence conditions. Table 2a and 2b below represent a snap-shot of the compliance status of the licensees. Table 2a: A snap-shot of compliances Compliance requirement 8.1 Compliance with Electricity Generation Licence Licensees compliance status All Licensees have valid electricity generation licences and comply with licence conditions, such as to submit production figures for the solar farms in a manner prescribed by NERSA, and submitted audited financial statements for the 2014/15 financial year. 8.2 Compliance with the Distribution Network Code All Licensees have a maintenance agreement in place which details the responsibility of the Licensee and the Distributor for equipment at point of connection. VII

9 Table 2b: A snap-shot of non-compliances Compliance requirement 8.5 Compliance with the Distribution System Operating Code Licensees compliance status Approximately 30% of the Licensees do not have a procedure for fault reporting and incident investigations and 15% do not have a procedure for outage scheduling. VIII

10 1. INTRODUCTION The National Energy Regulator (NERSA) derives its mandate to conduct compliance audits for licensed electricity Generators from the Electricity Regulation Act, 2006 (Act No. 4 of 2006) ('the Act'). The Act empowers the National Energy Regulator as the custodian and enforcer of the regulatory requirements. The Regulator is empowered to execute functions such as to enforce performance and compliance, and take appropriate steps in the case of non-performance. There are approximately 150 electricity generation licensees, including the stateowned entity, Eskom, municipal generation, and independent power producers. The total number of licensed generation facilities consists of about 305 operational, 7 nonoperational or decommissioned and 27 new-build facilities. The total capacity is apportioned as follows: operational capacity is about MW, decommissioned capacity is 1 058MW and capacity under construction equates to MW. The selection criteria for the representative sample of generation facilities audited is based on: the type of licensee, for example municipal generators may be audited together so as to establish common practices and challenges; information submitted to NERSA through G-forms, production figures or any other forms; the audit cycle in terms of the compliance framework; the power contribution or impact of the power station on the national grid; research or data collected through desktop monitoring or media; and a mixture of age, type of technology and location. In the 2016/17 financial year, NERSA conducted audits for the electricity generation industry, specifically the renewable power plants operated by Independent Power Producers (IPPs). All of the licensees that were audited are part of the Department of Energy (DoE) Renewable Energy Independent Power Producer procurement programme, which was initiated by the Ministerial Determination issued by the Minister of Energy on 02 July Table 3 provides a list of licensees that were audited in the 2016/17 financial year. 1

11 Table 3: The licensees audited in the 2016/17 financial year Licensee Solar Farm Name Capacity in MW Status of the Solar Farm Audit Date Licensed Contracted AE-AMD Independent Power Producer 1(Pty) Ltd Greefspan PV Power Plant Operational 27 September 2016 Core Energy (Pty) Ltd CPV Power Plant no.1 (Pty) Ltd De Aar Solar Power (RF) (Pty) Ltd Droogfontein Solar Power (RF) (Pty) Ltd Firefly 253 Investments (Pty) Ltd Witkop Solar Park De Aar Solar Power Droogfontein Solar Power Letsatsi Solar PV Power Station Operational 19 July Operational 27 October Operational 24 August Operational 23 August Operational 14 July 2016 Oakleaf Investments Holdings 79 (Pty) Ltd RustMo 1 Solar Farm (Pty) Ltd Scatec Solar SA 166 (Pty) Ltd Sevenstones 159 (Pty) Ltd SlimSun (Pty) Ltd Solar Capital De Aar (Pty) Ltd Lesedi PV Operational 07 September 2016 RustMo1 Solar Farm Operational 07 September 2016 Kalkbult Operational 25 October 2016 Aries Solar PV Operational 29 September Facility 2016 Slimsun 5 5 Operational 21 June 2016 Swartland Solar Park Solar Capital De Operational 30 August Aar

12 2. AUDIT OBJECTIVES All licensed entities are subject to an audit for compliance with licence conditions as imposed by the Regulator. The audit objectives are to: assess compliance with the requirements of the Electricity Generation Licence conditions and the South African Grid Code; validate evidence of self-reported non-compliances; document the licensees compliance level and plans; and monitor and enforce the implementation of corrective action plans. 3. AUDIT PROCESS The compliance audit assessment and site visit serve as an information gathering process. The information that is collected together with evidence that is submitted by the licensee is analysed. Subsequently, an audit report detailing the record of observations, findings and recommendations is compiled for each licensee according to the number of its generation facilities. The reports are sent to the licensee for comments. On receipt of the comments, the audit report is finalised and a consolidated audit report detailing a summary of observations, findings and recommendations for all the power stations that were audited in the financial year is prepared for approval by the Energy Regulator. The approved reports are sent to the licensees, who must develop a corrective action plan to address the findings of the audit. NERSA then monitors and enforces the implementation of the corrective action plan to assist the licensees to comply with its licence conditions. The various stages of the audit process involve the following activities, as outlined in Table 4 below. Table 4: The various stages of the audit process Stage 1: Establish an audit team. Pre-site visit activities Establish communication with the licensees to be audited. Prepare audit questionnaire. Compile audit programme, agenda, and presentation. Prepare audit packages. Travelling to site and logistics. Stage 2: On-site visit activities Stage 3: Post-site visit activities Presentations detailing the aim of the audit and the audit process. Conduct compliance audits assessment on the licensee and take notes. Conduct plant inspection. Consolidate licensee responses. Compile licensee individual audit reports. Send individual audit reports to the audited licensees for comments. Incorporate the licensees comments and finalised audit reports. Compile a consolidated audit report. Prepare submissions to the Energy Regulator. Request licensees to submit corrective action plans. Monitor the implementation of the corrective action plans. 3

13 4. AUDIT METHODOLOGY An audit questionnaire is the main document used to facilitate the audit and to determine the level of the licensees' compliance. It was sent to the licensees before the day of the audit for preparation. The following documents are the basis for the audit questionnaire: the Electricity Regulation Act, 2006 (Act No. 4 of 2006); the Generation Compliance Monitoring Framework; the Electricity Generation Licence issued to the licensee; the National Environmental Management Act, 1998 (Act No. 107 of 1998); the Occupational Health and Safety Act, 1993 (Act No.85 of 1993); the Grid Connection Code for Renewable Power Plants connected to the electricity Transmission System or the Distribution System in South Africa, version 2.8 of July 2014 and the South African Grid Code (SAGC), version 9.0 of July 2014, including the Distribution Code, version 6.0 of July The questionnaire is divided into 13 sections; the five compliance requirement sections relate to: the Electricity Generation Licence conditions; the South African Grid Code Distribution Information Exchange Code; the South African Grid Code Distribution Network Code; the Grid Connection Code for Renewable Power Producers; and the South African Grid Code Distribution System Operating Code. The other eight sections of the questionnaire are aimed at establishing whether the licensees align themselves with the industry standards and best practices with regard to reliability, safe and sustainable operation of the licensed facilities. The sections are as follows: Generation Maintenance Strategy; Plant Performance; Outage Management; Asset Management; Refurbishment and Expansion Plans; Environmental Assessment; Occupational Health and Safety Assessment and Business Assessment. 5. SCOPE OF WORK The scope of work involved the activities detailed in Section 3 ( Audit Process ) of this report. Table 5 indicates the solar farms that were audited in the 2016/17 financial year. 4

14 Table 5: The solar farms audited in 2016/17 financial year Licensee Solar Farm Name AE-AMD Independent Power Producer 1(Pty) Ltd Core Energy (Pty) Ltd Greefspan PV Power Plant Witkop Solar Park CPV Power Plant no.1 (Pty) Ltd CPV Power Plant No 1 De Aar Solar Power (RF) (Pty) Ltd Droogfontein Solar Power (RF) (Pty) Ltd Firefly 253 Investments (Pty) Ltd Oakleaf Investments Holdings 79 (Pty) Ltd RustMo 1 Solar Farm (Pty) Ltd Scatec Solar SA 166 (Pty) Ltd Sevenstones 159 (Pty) Ltd SlimSun (Pty) Ltd Solar Capital De Aar (Pty) Ltd De Aar Solar Power Droogfontein Solar Power Letsatsi Solar PV Power Station Lesedi PV RustMo1 Solar Farm Kalkbult Aries Solar PV Facility Slimsun Swartland Solar Park Solar Capital De Aar 6. CHALLENGES FOR THE SOLAR FARMS All licensees are experiencing challenges; some challenges are common to a number of licensees, whereas others are unique to a particular licensee or solar farm. For example, a few of the solar farms experienced lightning strikes on the PV modules and the reason for the incidents is currently unknown. One of the solar farms had a unique challenge as it was unable to reach its estimated P50 MWh forecast due to low irradiance. 7. FACTS AND FIGURES The 12 solar farms supply power up to the contracted capacity that the licensee and Eskom ( the Buyer ) agreed on in the Power Purchase Agreement (PPA). The energy contribution from the audited solar farms is as outlined in Table 6 below. Table 6: Energy contributed by the audited solar farms in 2014, 2015 and 2016 Name of audited Energy generated Energy generated Energy generated licensee (MWh) in 2014 (MWh) in 2015 (MWh) in 2016 AE-AMD Independent Power Producer 1(Pty) Ltd 5

15 Name of audited licensee Core Energy (Pty) Ltd CPV Power Plant no.1 (Pty) Ltd De Aar Solar Power (RF) (Pty) Ltd Droogfontein Solar Power (RF) (Pty) Ltd Firefly 253 Investments (Pty) Ltd Oakleaf Investments Holdings 79 (Pty) Ltd RustMo 1 Solar Farm (Pty) Ltd Scatec Solar SA 166 (Pty) Ltd Sevenstones 159 (Pty) Ltd Energy generated Energy generated Energy generated (MWh) in 2014 (MWh) in 2015 (MWh) in SlimSun (Pty) Ltd Solar Capital De Aar (Pty) Ltd The total power contribution for 2014, 2015 and 2016 was MWh, MWh and MWh respectively. 8. SUMMARY OF OBSERVATIONS AND AUDIT FINDINGS Observations and findings related to compliance with the licence conditions, the South African Grid Code, and best engineering practices were identified and shared with the licensees. Where applicable, possible options for corrective actions were discussed with the licensees during the audit process. Furthermore, the individual audit reports present recommendations to address the audit findings and noncompliances. Each subheading below briefly discusses the findings and status of compliance of the licensees. 6

16 In each compliance requirement section, the total compliance rating equates to 100%, and the compliance rating is apportioned equally according to the number of compliance items within the section. The outcome compliance status of the licensees is then graphically represented in Graph ELECTRICITY GENERATION LICENCE The licence conditions stipulate the conditions under which the generation facility must operate to ensure compliance with the regulatory requirements. It stipulates that the licensee must maintain separate accounts for the solar farm, submit annual financial information, production figures and any other information as prescribed by NERSA. It also states that the licensee must inform NERSA of any change of company details or the process of generation or the operational status of the solar farm. Table 7 below contains a summary of electricity generation licence compliance requirements and the licensees compliance status. Table 7: Licensees compliance status with electricity generation licence Licence condition Compliance Compliance Status requirement rating (%) Compliant Non- Compliant Maintain separate accounts and submit audited financials for the generation facility. Submit production figures in a manner prescribed by NERSA A, B, C, D, E, F, G, H, I, J, K, L 16.7 A, B, C, D, E, F, G, H, I, J, K, L Validity of the electricity generation licence A, B, C, D, E, F, G, H, I, J, K, L Changes of details of licensee A, B, C, D, E, F, G, H, I, J, K, L Changes in operational status or generation process of the Solar Farm. Validity of PPA and contracted capacity A, B, C, D, E, F, G, H, I, J, K, L 16.7 A, B, C, D, E, F, G, H, I, J, K, L Total compliance rating 100%(16.7x 6) 7

17 Key to Table 7 A: AE-AMD Independent Power Producer 1(Pty) Ltd B: Core Energy (Pty) Ltd C: CPV Power Plant no.1 (Pty) Ltd D: De Aar Solar Power (RF) (Pty) Ltd E: Droogfontein Solar Power (RF) (Pty) Ltd F: Firefly 253 Investments (Pty) Ltd G: Oakleaf Investments Holdings 79 (Pty) Ltd H: RustMo 1 Solar Farm (Pty) Ltd I: Scatec Solar SA 166 (Pty) Ltd J: Sevenstones 159 (Pty) Ltd K: SlimSun (Pty) Ltd L: Solar Capital De Aar (Pty) Ltd 8.2 DISTRIBUTION INFORMATION EXCHANGE CODE The code defines the reciprocal obligations of parties, the Generator and Distributor, with regard to the provision of information for the implementation of the Grid Code. The information requirements are divided into planning information, operational information, post-dispatch information and treatment of confidential information. The code requires both the Generator and the Distributor to designate personnel for information exchange. Table 8 contains a summary of the licensees compliance status with the Distribution Information Exchange Code. Table 8: Licensees compliance status with the Distribution Information Exchange Code Distribution Information Compliance Compliance Status Exchange Code requirements rating (%) Compliant Non- Compliant Procedures to address the requirements of the Distribution Information Exchange Code e.g. appointment of designated person to facilitate communication with the Distributor or Network operator, method of communication. Operational data storage, the provision of a storage facility, access control and data retention period. Submission of information to the Distributor regarding new or altered equipment at point of connection. 25 A, B, C, D, E, F, G, H, I, J, K, L 25 A, B, C, D, E, G, H, I, J, K, L 25 A, B, C, D, E, G, H, I, J, K, L Commissioning and notification 25 A, C, D, E, G, procedure in place. H, I, J, K, L Total compliance rating 100% (25 x 4) B 8

18 Key to Table 8 A: AE-AMD Independent Power Producer 1(Pty) Ltd B: Core Energy (Pty) Ltd C: CPV Power Plant no.1 (Pty) Ltd D: De Aar Solar Power (RF) (Pty) Ltd E: Droogfontein Solar Power (RF) (Pty) Ltd F: Firefly 253 Investments (Pty) Ltd G: Oakleaf Investments Holdings 79 (Pty) Ltd H: RustMo 1 Solar Farm (Pty) Ltd I: Scatec Solar SA 166 (Pty) Ltd J: Sevenstones 159 (Pty) Ltd K: SlimSun (Pty) Ltd L: Solar Capital De Aar (Pty) Ltd The licensees cite the PPA and the Distribution Connection and Use of System Agreement (DCUOSA) as documents that contain the procedures relating to the requirements of the Distribution Information Exchange Code. All licensees do not have standalone formal procedures related to transfer of information, submission of information related to new or altered equipment at point of connection, data storage and archiving of operational information; and commissioning and notification. However, some have designated persons to facilitate communication with the Distributor, submit information of new or altered equipment at point of connection, established appropriate data storage facilities with access control features and capability to retain data for more than five years. 8.3 DISTRIBUTION NETWORK CODE The code requires the licensee and the Distributor to conclude a connection and supply agreement, whereby the parties agree on connection conditions and responsibilities of each party in terms of maintenance and operation of equipment at the point of connection. The Distributor stipulates protection equipment requirements for generators prior to connection to the network. Table 9 below shows the compliance status of the licensees. Table 9: Licensees compliance status with the Distribution Network Code Distribution Network Code Compliance Compliance Status requirements rating (%) Compliant Non-Compliant Maintenance agreement for equipment at point of connection. 25 A, B, C, D, E, F, G, H, I, J, K, L Connection and supply agreement in place. 25 A, B, C, D, E, F, G, H, I, J, K, L Capability to remotely report any status change of any critical function that may 25 A, B, C, D, E, F, G, H, I, J, K, L 9

19 Distribution Network Code requirements negatively impact on the quality of supply on the Distribution system (telemetry). Compliance rating (%) Compliance Status Compliant Non-Compliant Does the licensee dispatch or synchronise its plant using appropriate equipment and in line with the code requirements. Total compliance rating 25 A, B, C, D, E, F, G, H, I, J, K, L 100% (25x4) Key to Table 9 A: AE-AMD Independent Power Producer 1(Pty) Ltd B: Core Energy (Pty) Ltd C: CPV Power Plant no.1 (Pty) Ltd D: De Aar Solar Power (RF) (Pty) Ltd E: Droogfontein Solar Power (RF) (Pty) Ltd F: Firefly 253 Investments (Pty) Ltd G: Oakleaf Investments Holdings 79 (Pty) Ltd H: RustMo 1 Solar Farm (Pty) Ltd I: Scatec Solar SA 166 (Pty) Ltd J: Sevenstones 159 (Pty) Ltd K: SlimSun (Pty) Ltd L: Solar Capital De Aar (Pty) Ltd All of the above listed requirements are implemented through the DCUOSA and PPA. 8.4 THE GRID CONNECTION CODE FOR RENEWABLE POWER PLANTS The Grid Connection Code for Renewable Power Plants requires all Renewable Power Plants (RPPs) to demonstrate compliance with all applicable requirements specified in the code and any other applicable code or standard approved by NERSA before being allowed to connect to the Distribution System or the Transmission System and operate commercially. Almost half of the plants do not comply with certain requirements under Abnormal Operation Conditions, Reactive Power Capabilities, Power Quality and the Provision of Data and Dynamic Simulation Models. All the licensees were granted temporary exemptions while investigating possible solutions to address the non-compliances. However, some of the exemptions have expired while the non-compliances have not been addressed. The licensees need to apply for the extension of the exemptions and ensure that the non-compliances are addressed. 10

20 8.5 DISTRIBUTION SYSTEM OPERATING CODE The code sets out the responsibilities and roles of those connected to the network as far as the operation of the Distribution System is concerned and more specifically, issues such as economic operation, reliability and security of the Distribution System, operation under normal and abnormal conditions, maintenance coordination/outage planning and safety of personnel. Table 10 below contains the licensees compliance status with the Distribution System Operating Code. Table 10: Licensees compliance status with the Distribution System Operating Code Distribution Network Code Compliance Compliance Status requirements score (%) Compliant Non-Compliant Cooperation with the Distributor in executing all the operational activities during an emergency generation condition. Procedure for outage scheduling and safety coordination A, B, C, D, E, F G, H, I, J, K, L 33.3 A, C, D, E, F, G, H, I, J, K B, L Procedure for fault reporting and analysis/incident Investigations. Total compliance rating Key to Table A, C, F, G, H, I, J, K, L 100%(33.3x3) A, B, D, E A: AE-AMD Independent Power Producer 1(Pty) Ltd B: Core Energy (Pty) Ltd C: CPV Power Plant no.1 (Pty) Ltd D: De Aar Solar Power (RF) (Pty) Ltd E: Droogfontein Solar Power (RF) (Pty) Ltd F: Firefly 253 Investments (Pty) Ltd G: Oakleaf Investments Holdings 79 (Pty) Ltd H: RustMo 1 Solar Farm (Pty) Ltd I: Scatec Solar SA 166 (Pty) Ltd J: Sevenstones 159 (Pty) Ltd K: SlimSun (Pty) Ltd L: Solar Capital De Aar (Pty) Ltd Although there are no procedures in place for most solar farms, the activities that would have been documented in the procedures are implemented to a larger extent. The licensees need to formalise the activities in writing. 8.6 GENERATION MAINTENANCE STRATEGY The basis for maintenance planning is Original Equipment Manufacturer (OEM) recommendations for all licensees. There is sufficient time to schedule planned 11

21 maintenance as the PV plants are only operational during daytime when there is sunshine. Some of the licensees have a maintenance planning system to schedule and keep records of proactive, preventive and reactive maintenance, whereas others do not have a maintenance planning system, but use Microsoft Office software such as an Excel spreadsheet. The licensees strategy to manage maintenance planning is in line with international best practice aimed at ensuring that maintenance of equipment is carried out timeously and in an orderly manner, deriving optimal performance and preserving the life of the equipment. 8.7 PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS) The licensees submitted estimated energy generation and capacity factors for the solar farms. Graph 1 below represents a comparison of the capacity factor estimated during the licence application and the actual capacity factor. The actual capacity factor for Solar Capital De Aar (Pty) Ltd (SCD) is 38% less than the estimated, whereas that of CPV Power Plant No.1 (Pty) Ltd (CPV) and RustMo1 Solar Farm (Pty) Ltd (RustMo1) is 45% and 33% above the estimate. It would appear that the estimated capacity factor of 37% for SCD was unrealistic or an error. On the other hand, CPV estimated an energy generation of 46GWh for the first year of operation but the actual energy generation was 67GWh, hence, the 45% variance in capacity factor. 8.8 OUTAGE MANAGEMENT The licensees undertake outage management in accordance with OEM instructions. They take advantage of the night when the plants are not generating to do planned and corrective maintenance to avoid outages during the day when the solar farms are generating. In the event of forced outages that 12

22 will constitute a 10% loss of achieved capacity, the licensees immediately notifies the System Operator or Distributor as per the agreement between the parties stipulated in the PPA. 8.9 ASSET MANAGEMENT The plant equipment in most of the audited solar farms is partially labelled so as to identify the equipment on the asset register. Most of the solar farms use a functional location system to identify equipment and a coding system for identification of components. All assets, including plant equipment, are recorded in the asset register, which is updated continuously REFURBISHMENT AND EXPANSION PLANS All the solar farms are new as they were first commissioned between 2013 and Approximately 58% of the solar farms that were audited have an expected lifespan of 20 years, while the remaining 42% are estimated at 25 and 30 years. The solar farms currently do not have any future expansion plans beyond 20 years of PPA period. 9. PLANT INSPECTION 9.1 SCOPE OF PLANT INSPECTION The plant inspection was conducted as complementary to the audit questionnaire. The inspection covered the following aspects: a) safety of equipment; b) display of safety signs and emergency evacuation routes; c) environmental issues; d) housekeeping, for example cleanliness, neatness and tidiness; and e) plant labelling. The following areas were inspected: a) PV modules; b) Inverters; c) MV switchgear; d) transformers; e) substation, station control and batteries; f) critical spares storage; and g) fire protection equipment. 9.2 ON-SITE OBSERVATIONS 13

23 It is essential to ensure that plant equipment is adequately labelled for safety reasons. Equipment should be easily identifiable so that mistakes are avoided where an employee might inadvertently work on equipment that is in service. In addition, plant equipment labelling forms part of asset management. Safety and evacuation signs are essential for the safety of personnel under normal operations and in case of an emergency where personnel working in the plant need to evacuate quickly. Table 11 to 16 indicates the areas that were inspected as a sample representation of the solar farm. Table 11: PV Modules inspection Check for dust or debris on surface of PV Module Check for physical damage to the PV module PV module labelling Check for cable conditions e.g. wear & tear, burn marks, hot spots or loose connections Safety signs clearly displayed A B C D E F G H I J K L PV Modules IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO PI PI IM IM IM IM IM IM IM IM IM IM IO IO IO IO IO IO IO IO IO IO IO IO PI IM PI IM IM PI PI IM PI PI IM PI Key to Table 11 to Table 16 A: AE-AMD Independent Power Producer 1(Pty) Ltd B: Core Energy (Pty) Ltd C: CPV Power Plant no.1 (Pty) Ltd D: De Aar Solar Power (RF) (Pty) Ltd E: Droogfontein Solar Power (RF) (Pty) Ltd F: Firefly 253 Investments (Pty) Ltd G: Oakleaf Investments Holdings 79 (Pty) Ltd H: RustMo 1 Solar Farm (Pty) Ltd 14

24 I: Scatec Solar SA 166 (Pty) Ltd J: Sevenstones 159 (Pty) Ltd K: SlimSun (Pty) Ltd L: Solar Capital De Aar (Pty) Ltd IM: Implemented to a large extent IO: In order NA Needs attention PI: Partially implemented, there is room for improvement N: Not implemented or do not exist NI: Not inspected NO None observed Table 12: PV Inverter inspection Inverter operational data or plant output e.g. nameplate info & display parameters such as output voltage, MW, operating temperature Check for cable conditions e.g. wear & tear, burn marks, hot spots or loose connections A B C D E F G H I J K L PV Inverter IO IO IO IO IO IO IO IO IO IO IO IO Ventilation Safety signs clearly displayed All plant equipment clearly labelled Housekeeping in order IO IO IO IO IO IO IO IO IO IO IO IO 15

25 Table 13: Transformer inspection A B C D E F G H I J K L Controls are locked off and only accessible on authorisation Oil-filled transformers are installed inside bundwall area with drainage Access to transformers is restricted to authorisation Safety signs clearly displayed The transformers and accessories are clearly labelled Evidence of oil and water leaks Silica gel and oil bowl, liquids at correct levels Check for cable conditions e.g. wear & tear, burn marks, hot spots or loose connections. Transformer NO NO NO NO NO NO NO NO NO NO NO NO IM IM IM IM IM IM IM NA IM IM IM IM IO IO IO IO IO IO IO IO IO IO IO IO 16

26 Table 14: MV Switchgear, Station Control and Substation inspection Switchgear room accessible by authorised personnel and access records in place Switchgear door panels are locked (circuit breaker compartment) All equipment clearly labelled Safety signs clearly displayed Emergency evacuation signs and route clearly displayed Firefighting equipment clearly marked with instructions and serviced Housekeeping in order Monitor display working, able to operate the plant from the control room and to view status of the plant Check for cable conditions e.g. wear & tear, burn marks, hot spots or loose connections. A B C D E F G H I J K L MV Switchgear, Station Control and Substation IM IM IM IM NA IM IM IM IM IM IM IM IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO IO 17

27 Table 15: Battery inspection Check conditions of the room e.g. ventilation, water ingress A B C D E F G H I J K L Battery IO IO IO IO IO IO IO IO IO IO IO IO Batteries - electrolyte level, filler caps and battery check sheet IM IM IM IM PI IM IM IM IM IM IM IM Safety signs clearly displayed Check for cable conditions e.g. wear & tear, burn marks, hot spots or loose connections. Eyewash provided and fire extinguishers and firefighting equipment marked with instructions and serviced. IO IO IO IO IO IO IO IO IO IO IO IO IM IM PI PI IM PI PI IM PI PI IM PI Housekeeping in order. IO IO IO IO IO IO IO IO IO IO IO IO Most of the plants do not have a dedicated battery room as there is only a small quantity of batteries, which are only used as backup for communication and emergency systems. Therefore, in most cases, the batteries are in the same room as the metering panels and communication servers. 18

28 Table 16: Critical spares storage inspection Spares stored neatly Spares clearly labelled Spares have manuals A list of spares and spares movement tracking registers are in place. A B C D E F G H I J K L Critical Spares Storage IM IM IM PI IM IM IM IM IM IM IM IM IM IM PI PI PI IM IM IM IM IM IM IM It is worth noting that no measuring standard was used for plant inspection, however, a comparison between the audited licensees was used as reference. For example, a solar farm that fared poorly in terms of plant equipment labelling and a solar farm that implemented plant equipment labelling to a larger extent are flagged and compared for the licensee who fared poorly to evaluate whether is in line with the requirements of the applicable regulations. A similar approach is adopted for the requirements for safety signs and evacuation signs. 10. CONCLUSION Detailed findings and recommendations of the audit for each licensee are presented in the individual audit reports of the licensees. From the audit findings, it is evident that the licensees have systems in place to implement the requirements of the licence conditions, however, some do not have systems in place or programmes for compliance with the South African Grid Code. Graph 2 represents the compliance status of the licensees with the four compliance requirement items, namely: a) The Electricity Generation Licence Table 7; b) The Distribution Information Exchange Code Table 8; c) The Distribution Network Code Table 9; and d) The Distribution System Operating Code Table 10. In interpreting Graph 2, the following example is made: In Table 10, Core Energy (Pty) Ltd (B) is compliant with two requirements of the Distribution System Operating Code, hence, on Graph 2 its compliance status is 66.6% (33.3 x 2), whereas Slimsun (Pty) Ltd (K) is compliant with the three requirements, therefore, its compliance status is 100% (33.3 x 3). This interpretation method is applicable to the rest of the licensees compliance statuses on the graph. 19

29 11. RECOMMENDATION It is recommended that licensees address the non-compliances and other issues that are highlighted in this report, in particular those listed in the detailed individual audit reports. 20

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