Opportunity

An opportunity exists for South Africa to improve service delivery and address the performance and electricity distribution related infrastructure backlogs of the 174 municipalities and Eskom Distribution, in a standardised, but holistic way.

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The electricity distribution industry is in a crisis and something needs to be

done urgently

Age of Facilities Cost/Revenue

Competent skills

Budget

Reliability Demand

Planning Horizon

Electricity Price Customer Service Service delivery

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Why invest in the Smart Grid?

Through a study conducted by EDI Holdings during 2008 it was revealed that the estimated maintenance, refurbishment and strengthening backlog in the distribution network were calculated at R27,4bn (2008 values).

This backlog is growing at an alarming rate of R2,5bn per annum.

Current practices in the electricity distribution industry (EDI) do not guarantee business sustainability and economic growth, while the associated increased operation of under-maintained plant is posing a significant risk to the industry.

Despite the pockets of good performance, the 2007 NERSA Report on the state of EDI infrastructure demonstrated that the assets need urgent rehabilitation and investment.

Unless an immediate and direct intervention is initiated it will be very difficult to recover the industry from its downward trajectory.

Why invest in smart(er) Grids? ...1

The defunct EDI restructuring process was originally tasked with the responsibility of reforming the electricity industry and amongst others returm municipalities back to health;

With the closing down of the EDI Holdings there is a huge gap left in the electricity industry;

We currently have a resurgence of suppliers pushing their proprietary smart grid technology;

– Risk of supplier lock in

– Stranded assets

– Technology dumping

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Why invest in smart(er) Grids? ...2In this disaggregated form there is scope for corruption and non service delivery risks.

If the electricity distribution industry is left alone to decide amongst others on technology options, we could end up with non standardised solutions.

What about integration of:

– Renewables;

– Energy efficiency;

– Electric vehicles;

– Electrification of public transportation;

– Distributed generation;

– Storage.

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Why invest in smart(er) 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 nation’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 South Africa follow a business-as-usual pathway? Or will we step up to the challenge of a smart grid?

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There is a “case for action”

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The time has come for radical change

“You cannot prevent the titanic from sinking by rearranging the deck chairs”

What is the smart grid

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Information and Telecommunications

infrastructure

The Grid: Today vs. Tomorrow

Today Characteristic Tomorrow

Responds to prevent further damage. Focus is on protection of assets following system faults

Self heals Automatically detects and responds to actual and emerging transmission and distribution problems. Focus is on prevention. Minimises consumer impact.

Consumers are uninformed and non-participative with the power system

Motivates and includes the consumers

Informed, involved and active consumers. Broad penetration of demand response.

Vulnerable to malicious acts of terror and natural disasters.

Resists attacks Resilient to attack and natural disasters with rapid restoration capabilities.

Focused on outage rather than power quality (PQ) problems. Slow response in resolving PQ issues.

Provides power quality for 21st century needs

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

The Grid: Today vs. TomorrowSmart(er)Grid 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

Smart(er) Grids become a Key Enabler in the Municipal & Industry Landscape

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Smart Grid as an

Enabler

Regulation & Compliance

Renewable & Green solutions

Customer Satisfaction

Asset Management

Industry Sustainability

Job Creation

Service Delivery

Knowledge Management

Transfer Data into Knowledge & Management Information

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People in the Loop

Data

(Information)

Supervisory Control

SCADAData Acquisition

People in the Loop

Data

Information

SCADA

ApplicationApplication

Application in the Loop

(Knowledge & Understanding)

Smart Grid

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Managing the Change to the Smart(er) Grid in a well coordinated manner that involves stakeholder

Create Vision / Concepts Understanding

Communicate / Debate Alignment

Value Proposition Motivation

Plan and Deploy Achieve Results

Performance Feedback Best Practices/ Lessons Learned

Case Studies Corrective Action

Modify Plans Continuous

Improvem ent

Achieve Vision Success

Two Ways to get there—Market and Mandate

Taxonomy of a smart(er) grid

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We are not Starting cold - Systems Architecture

GeographicInformation

Systemse.g. GDC &

TIPSOperational systemse.g. CRP, PIC, Maximo

Supporte.g. Finesse, HR

ExecutiveInformation

Systemse.g. Data warehouse & marts

Data

Infrastructure

Key Traditional Grid Challenge

The future grid

Benefits of a Smarter Grid

Secondary Benefits...1

Standardise, processes, systems, operations and infrastructure;

Centralised procurement based on standards and best practices:

– More power from suppliers to centralised buyer;

– Opportunities to leverage FDI or local companies investment;

– Remove wastage;

– Move to supply chain management ;

– Better management of stock and inventories;

– Centralised stock warehouse;

– eliminate opportunities for proprietary technology and stranded assets;

– Encourage raw material beneficiation and job creation.

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Secondary Benefits...2

Better budgeting, expenditure and cash-flow management of municipalities;

Better electricity prices over the long term;

Better service delivery;

Better data for planning and management.

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Barriers to the development of a Smart(er)-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 Smart(er) Grid

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 Smart(er) Grid and encourage them to embrace the needed changes within their organisational cultures

Barriers to the development of a Smart(er)-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 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

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Considerations

Need to apply the systems thinking;

All stakeholders need to be involved in the decision to move to a smarter grid;

Specialist skills need to undertake the task currently exist in the industry and would need to be seconded for the duration of the programme;

Rationalisation of jobs will be required and more sustainable jobs will be created;

Unions, SALGA will be key in decision making;

Funding currently does exist in the industry but will need to be re-prioritised.

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Progress to Date

Under the guidance and mandate of SANEDI a representative Smart Grid industry forum was establish to:

• Integrate and co-ordinate the initiatives in the electricity supply industry;

• Facilitate standards an inter-operatibility;

• Optimise investments from a national perspective;

• Leverage work done to date;

• To direct the move towards an intelligent grid.

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Decisions Needed...1

Establishment of an inter-department (DOE, DST, DTI, DEA, DPE, COGTA) Smart Grids Task Group.

Need access to one municipality to undertake the end to end demonstration. Need to answer the following questions.

– What performance do we expect from the smart grid?

– How would it be characterised to meet those expectations?

– What technologies must be brought to bear?

– How do we know if we’re succeeding?

– How much will smart grids cost?

– What manpower will be required?

– How can smart grids be linked to the development of the SA economy?

– What timelines can be expected?

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Funding allocation to position the SA Grid to be able to amongst others:

• Underpin the required economic growth;

• Facilitate demand response;

• Reduce the carbon footprint;

• Enhance service delivery and improve customer satisfaction.

Who will be the South African Intelligent Grid Sponsor i.e. Lead South Africa to the ultimate Smart Grid?

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Decisions Needed...2

Questions ?