Senior Manager: Dr M Bipath Presentation to: ESLC Date : 25/08/2011

Transcription

1 Senior Manager: Dr M Bipath Presentation to: ESLC Date : 25/08/2011

2 SANEDI Objectives SANEDI is created for the sole purpose of assisting the DoE to achieve its strategic objectives as set out in the National Energy Act, 2008 (No. 34 of 2008). Ensure uninterrupted supply of energy to the Republic; Promote diversity of supply of energy and its sources; Facilitate effective management of energy demand and its conservation; Promote energy research; Promote appropriate standards and specifications for the equipment, systems and processes used for producing, supplying and consuming energy; Ensure collection of data and information relating to supply, transportation and demand; Provide for optimal supply, transformation, transportation, storage and demand energy that are planned, organised and implemented in accordance with a balanced consideration of security of supply, economics, consumer protection and a sustainable development; Provide for certain safety, health and environment matters that pertain to energy; Facilitate energy access for improvement of quality of life of the people the Republic; Commercialise energy-related technologies; Ensure effective planning of energy supply, transportation and consumption; and Contribute to sustainable development of the South African economy.

3 Key Assumptions Macroeconomic objectives Growth Beneficiation of raw materials Job creation Energy security plan for : Rising oil prices Peak oil Fuel switching (liquid fuels vs. grid solutions) Sever the colonial technology umbilical cord We cannot continue being a net technology importer Develop local science and technology base Develop technical product/services solutions to solve local problems (a need to move down the innovation value chain) Develop local secondary industries to support energy solutions Normalise balance of payments (capital outflows) effects De-link GDP growth and energy growth Reduce energy intensity Energy efficiency should take main stage Diversify energy mix Role of Public interest research is to: minimise the technology risk ; reduces cost and increases the options to solve our energy problems Undertake projects that have high societal value but may not have high return for the private sector to undertake 3

4 Why smart Grids? Between now and 2020, more than R250 billion will need to be spent to maintain and expand our electricity transmission and distribution infrastructures. But without a smart grid perspective much of this money will be spent based on 20th century technology. Under a business-as-usual scenario without a smart grid perspective that would be like expanding the South Africa s telecommunications system without taking advantage of today s digital and wireless technologies. This is why the decisions to modernise the grid are so vital. Will our South Africa follow a business-as-usual pathway? Or will we step up to the challenge of a smart grid? Smart Grids is seen as a key enabler for: Consumer empowerment Energy efficiency Renewable integration onto the grid Asset management 4

5 Utilities world-wide are experiencing similar issues Age of Facilities Cost/Revenue Reliability Demand Budget Competent skills Planning Horizon Diminishing economy-of-scale returns coupled with increasing demand growth, higher fuel costs, and rising environmental requirements, all converged to challenge the traditional declining cost-commodity business model and structure of the electric utility industry. Source: EPRI 2004

6 Proposed SANEDI SmartGrid Vision To revolutionise the South African electric system by 2030: The power grid has evolved into an intelligent energy delivery system that supports plug-and-play integration of dispatchable and intermittent lowcarbon energy sources, and provides a platform for consumer empowerment and engagement in load management, national energy independence, innovation, entrepreneurship, and economic security. This smart grid supports the best and most secure electric services available in the world and connects everyone to abundant, affordable, high quality, environmentally conscious, efficient, and reliable electric power. 6

7 The Grid: Today vs. Tomorrow Today Characteristic Tomorrow Responds to prevent further damage. Focus is on protection of assets following system faults Consumers are uninformed and non-participative with the power system Self heals Automatically detects and responds to actual and emerging transmission and distribution problems. Focus is on prevention. Minimises consumer impact. Motivates and includes the consumers Informed, involved and active consumers. Broad penetration of demand response. Vulnerable to malicious acts of terror and natural disasters. Focused on outage rather than power quality (PQ) problems. Slow response in resolving PQ issues. Resists attacks Provides power quality for 21 st century needs Resilient to attack and natural disasters with rapid restoration capabilities. Quality of power meets industry standards and consumer needs. PQ issues identified and resolved prior to manifestation. Various levels of PQ at various prices. Source: NETL modern Grid initiative

8 The Grid: Today vs. Tomorrow SmartGrid characteristics Today Characteristic Tomorrow Relatively small number of large generating plants. Numerous obstacles exist for interconnecting DER Accommodates all generation and storage options Very large numbers of diverse distributed generation and storage devices deployed to complement the large generation plants. Plug and play convenience. Significantly more focus on and access to renewables Limited wholesale markets still working to find the best operating models. Not well integrated with each other. Transmission congestion separates buyers and sellers. Enables markets Mature wholesale market operations in place; well integrated nationwide and integrated with reliability coordinators. Retail markets flourish where appropriate. Minimal transmission congestion and constraints. Minimal integration of limited operational data with asset management processes and technologies. Siloed business processes. Time based maintenance. Optimises assets and operates efficiently Greatly expanded sensing and measurement of grid conditions. Grid technologies deeply integrated with asset management processes. Effectively manage assets and cost. Condition -based maintenance. Source: NETL modern Grid initiative

9 One of the key problems of the traditional grid

10 The future grid

11 Participatory Network Enables:

12 Taxonomy of a smarter grid

13 Key success factors The grid must be more reliable. A reliable grid provides power dependably, when and where its users need it and of the quality they value. It provides ample warning of growing problems and withstands most disturbances without failing. It takes corrective action before most users are affected. The grid must be more secure. A secure grid withstands physical and cyber attacks without suffering massive blackouts or exorbitant recovery costs. It is also less vulnerable to natural disasters and recovers more quickly. The grid must be more economic. An economic grid operates under the basic laws of supply and demand, resulting in fair prices and adequate supplies. The grid must be more efficient. An efficient grid takes advantage of investment that leads to cost control, reduced transmission and distribution electrical losses, more efficient power production and improved asset utilisation. Methods to control the flow of power to reduce transmission congestion and allow access to low cost generating sources including renewable and energy storage will be available. 1 3

14 Key success factors The grid must be more environmentally friendly. An environmentally friendly grid reduces environmental impacts through initiatives in generation, transmission, distribution, storage and consumption. Access to sources of renewable energy will be expanded. Where possible, future designs for SmartGrid assets will occupy less land reducing the physical impact on the landscape. The grid must be safer. A safe grid does no harm to the public nor to the grid workers and is sensitive to users who depend on it. The nation s grid should be a SmartGrid not by randomly gathering a group of interesting technologies and calling them smart, but rather by first building a vision and the framework that enables that vision. 1 4

15 What is the smart grid Information and Telecommunications infrastructure 1 5

16 Smart-Grids hype cycle 1 6

17 Rationale for the Smart Grid initiative The transition to the smart grid will take many years and will be driven by the interests and desires of the primary beneficiaries utilities, individual consumers, and society in general. Two key ingredients are needed to instil in each of these stakeholders the passion to support and invest in a smart grid. The first of these ingredients is collective understanding. This understanding is based on a clear vision that defines what the smart grid is, what it can do, how it will be implemented, and how each stakeholder will be affected. Clearly, communicating smart grid concepts to a critical mass of diverse stakeholders is difficult, but it is essential to gaining their alignment. Understanding leads to alignment and ultimately to decision making. The second ingredient is motivation. Alignment around smart grid concepts is important and helps ensure that all stakeholders are pulling in the same direction, but without a compelling incentive to move forward, progress will be limited. Motivation emerges when a universal value proposition exists, that is, when a compelling business case is seen from each beneficiary s perspective. The degree of motivation depends on the strength of the value proposition the stronger the business case, the stronger the motivation. 1 7

18 Smart-Grid Initiative (SGI) - Process SA Smart Grid vision Gap analysis List of solutions Business Case Desired future state assessment Optimise Finalise business case and Roadmap Implementation Plan 1 8

19 Scope of the Smart-Grid initiative Phase1 ( ) Develop a vision of the smart-grid create the vision and define it through the grid s principal characteristics (PCs) and key technology areas Desired Future-State Assessment In collaboration with the key stakeholders, a smart grid vision for South Africa and possibly the SADC is developed. General agreement and understanding is reached on the goals to be achieved by the smart grid and how those goals will impact the PCs. Future socio-economic conditions are projected to verify they support this planned vision. Current-State Assessment - The current technologies, processes, resources, regulatory climate, and consumer culture are assessed to establish the starting point from which the smart grid is defined. Particular emphasis on the utilities current status in these areas is needed, as well as any future plans described in its 5-year Business Plan. Gap Analysis and Solutions - The smart grid vision defined in the desired future-state assessment is compared to the current-state assessment results to identify the gaps in the technology, regulatory policy, and consumer culture areas. Gap statements are written and the actions needed to reduce or eliminate them are defined. Specific solutions are then identified based on the gap statements. These solutions will include new applications, technologies, processes, programs, regulatory and legislative policy, and consumer/societal outreach. Additionally, specific research and development projects needed to reduce investment risks are identified. 1 9

20 Scope of the Smart-Grid initiative Phase 1( ) Business Case - Specific financial metrics are defined. Using the solution set identified above and the quantities and sequence assumed, cost estimates are determined to design, procure, install, test, and place the solutions into operation. In addition to these capital costs, assumed operation and maintenance (O&M) costs are estimated where applicable. Using the goals defined above, specific benefits are catalogued and their values are estimated. The business case is then developed and the results evaluated. Multiple iterations may be required to optimise the business case. Implementation Plan - The implementation plan establishes the timing, scope, and quantities for deploying both the solutions and any associated research and development (R&D) projects. The business case cash flows for both the costs and benefits are driven from this plan. It is modified iteratively until the business case results are optimised. Optimisation - Modelling, simulation, and other analysis tools, along with good engineering judgment, are used to adjust timing, solution scope, and quantities. These variables are captured in the implementation plan and are used as inputs to the business case. Various options and iterations are evaluated to determine the specific solutions that optimise the business case financial metrics. Finalisation - Once optimised, the final implementation plan and business case is summarised. The results are also broken down by the primary beneficiaries (utility, consumer, and society) and shared with each to help them understand the smart grid s value from their own perspectives. This process supports the decision-making process for all key stakeholders by revealing how and why a smart grid meets their specific needs and desires. 2 0

21 Smart Grid initiative phase 1 Eskom OEMs Academia AMEU Inter departmental SC SGI (SANEDI???) Go/No go Business case Implementation plan AMEU Stakeholder 2 1

22 Phase 1 Implementation considerations Phase 1 needs a strategic team (interdepartmental), lead by the DoE, to be appointed to direct the smart-grid evaluation and decision making. Technical teams made up of industry experts need to be either seconded to SANEDI, or employed, to undertake the evaluation and to develop a business case and implementation plan with a go/no go recommendation. A lot of work been undertaken internationally and a comprehensive review of the literature will allow us to shorten the phase 1 and minimise the cost requirements of phase 1. SANEDI will provide the support staff, funding and project management to undertake phase1. It is estimated that phase 1 could take 3 years if no resourcing issues are experienced. Proposed budget for this 3 years is R150 million (based on cost sharing) 2 2

23 Smart Grid implementation Programme - Phase 2 ( ) The Smart Grid R&D Program activities will primarily focus on power delivery systems and consumer devices, including interfaces and integration with transmission and generation systems. The major R&D topic areas include: Standards & Best Practices for electrical and communications interconnection, integration, interoperability, conformance test procedures, and operating practices. Technology Development in advanced sensing and measurement, integrated communications and security, advanced components and subsystems, advanced control methods and system topologies, and decision and operations support. Modelling accurately the behaviour, performance, and cost of distribution-level smart grid assets and their impacts at all levels of grid operations from generation to transmission and distribution. Analysis of measured data and simulations to better understand the impacts and benefits concerning capacity usage, power quality and reliability, energy efficiency, operational efficiency, and clean technology, as well as economic/business environment and crosscutting goals. Evaluation & Demonstrations of new technologies and methods in terms of performance and conformance with emerging standards & best practices and interoperability requirements. 2 3

24 Phase 2 Planning for the smart-grid implementation programme (SGIP) DoE SANEDI Board Steering committee SGIP (SANEDI???) Technical Working groups Technology MGT Technology development Programme (CORD) 2 4

25 Phase 2 Planning for the smart-grid implementation programme (SGIP) SGIP is created after the decision to go ahead is given. SGIP is made up of two distinct activities Technology management process Technology development process Technology management is to undertake the necessary planning, organising, leading and controlling of activities in preparation for the smart grid implementation. The DoE is the key sponsor DoE to chair the steering committee made of key stakeholders with the role to ensure delivery (time, cost, quality) of key activities Technical working groups will be setup to deal with the outputs of the technology development portfolios. This activity is likely to be centres of research and development based at universities. Phase 2 is likely to take 7 years Proposed budget for 7 years is estimated to be R 2.1 billion with a staff of approximately 80 technical experts 2 5

26 Barriers to the development of a Smart-Grid There are many reasons the smart grid is not emerging more quickly. Fundamentally, no single business owns or operates the grid. Individual players have little incentives to risk major change. With so many players in the grid system, finding a common vision for change is difficult but imperative. The benefits are so broad and far reaching that perhaps only government can account for the cumulative societal value. Longer term financial incentives are needed to enable the larger infrastructure investments needed for the SmartGrid Regulatory and legislative barriers change statutes, policy, and regulation to eliminate those that inhibit progress and create those that encourage progress and create a win-win scenario for all stakeholders Culture and communication increase the understanding and awareness of stakeholders on the value of the SmartGrid and encourage them to embrace the needed changes within their organisational cultures

27 Barriers to the development of a Smart-Grid Industrial barriers define the case for change, the burning platform, and provide the necessary incentives to engage industry on the smart grid. Industry will respond when it understands that there is government commitment and there is a profitable market for smart grid technologies and services. Technical barriers need to increase the speed of research, development and deployment. Increase funding to support research, development and deployment for those technologies that are needed for the Smart-Grid Work more closely with academia to develop the new human resources with skill needed for the Smart-Grid Apply more priority and resources to the development of needed standards. Clarify the pathway to the Smart-Grid by developing a transition plan that shows the intermediate milestones for achieving its vision 2 7

28 Questions