date: 16 january 2017 - south african national energy

ACADEMY OF SCIENCE OF SOUTH AFRICA (ASSAf)

THE STATE OF ENERGY EFFICIENCY TECHNOLOGIES IN SOUTH AFRICA

FINAL REPORT

Date: 16 January 2017

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Table of Contents

List of Tables .............................................................................................................................. i

List of Figures ............................................................................................................................ ii

Abbreviations and Acronym .................................................................................................... iii

1. Introduction ........................................................................................................................ 1

2. Purpose of Report .............................................................................................................. 3

3. Approach and Methodology .............................................................................................. 4

4. Electricity Supply Industry Perspective ............................................................................. 5

4.1 Background ................................................................................................................. 5

4.2 Regulatory regime ....................................................................................................... 5

4.3 ESI reform ................................................................................................................... 6

5. Review and Assessment of historic and current energy saving technologies .................... 7

5.1 Historic energy saving technologies ........................................................................... 7

5.1.1 Ripple control....................................................................................................... 7

5.2 Current energy saving technologies ............................................................................ 8

5.2.1 Efficiency initiatives ............................................................................................ 8

5.2.2 Street lights .......................................................................................................... 9

5.2.3 Tribology............................................................................................................ 12

6. Smart Grid: South Africa ................................................................................................. 12

6.1 Smart Grid technology deployment in efficiency improvement ............................... 12

6.2 Smart Grid related research and technology development opportunities ................. 24

6.3 Landscape of institutions engaged in smart grid research ......................................... 25

7. Conclusion ....................................................................................................................... 27

8. Contact Information ......................................................................................................... 29

ANNEXURE A: Documents Reviewed .................................................................................. 30

ANNEXURE B: Individuals Interviewed ................................................................................ 32

List of Tables

Table 1: Streetlight efficiency improvement ........................................................................... 10

Table 2: Pilot sites .................................................................................................................... 19

Table 3: Eskom Smart grid related research ............................................................................ 20

Table 4: University Smart grid related research ...................................................................... 21

Table 5: Technology Applications ........................................................................................... 23

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List of Figures

Figure 1: ESI value chain ........................................................................................................... 1

ASSAf Date 16 January 2017

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Abbreviations and Acronym

AAM Advanced Asset Management

ADAM Approach to Distribution Asset Management

AMI

AMR

Advanced metering infrastructure

Advanced meter reading

ANM Active Network Management

ASSAf Academy of Science of South Africa

CFL Compact Fluorescent Lamp

DA Distribution Automation

DG Distributed Generation

DoE Department of Energy

DR Demand Response

DST Department of Science and Technology

EPRI Electricity Power Research Institute

EEDSM

EDI

ESI

Energy Efficiency and Demand Side Management

Electricity Distribution Industry

Electricity Supply Industry

ERP Enterprise Resource Planning

ETPSG European Technology Platform Smart Grid

EU European Union

IDM Integrated Demand Management

IEP Integrated Energy Planning

IPP Independent Power Producer

ISGAN International Smart Grid Action Network

NEES National Energy Efficiency Strategy

NER National Electricity Regulator

NERSA

NMD

National Energy Regulator of South Africa

Notified Maximum Demand

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NMS Network Management System

NREL National Renewable Energy Laboratory

OMS

OT

Outage management system

Operational Technology

RES Renewable Energy Sources

RDI Research, Development and Innovation

SANEDI South African National Energy Development Institute

SAPP Southern Africa Power Pool

SGMM Smart Grid Maturity Model

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Disclaimer:

This document has been prepared for use by the Department of Science and Technology

(DST) and the Academy of Science of South Africa (ASSAf) and focus on the state of energy

efficiency technology in South Africa with reference to smart grids.

The author, nor any person acting on his behalf, (a) makes any warranty, expressed or

implied, with respect to the use of any information disclosed in this document or (b) assumes

any liability with respect to the use of any information disclosed in this document. Reference

herein to any specific commercial product, process, or service by its trade name, trademark,

manufacturer, or otherwise, does not necessarily constitute or imply its endorsement,

recommendation, or favouring by the independent researcher.

Any recipient of this document, by their acceptance or use of the information contained in

this document, releases the author from any liability for direct, consequential or special loss

or damage whether arising in contract, warranty, express or implied, and irrespective of

fault, negligence, and strict liability.

ASSAf 16 January 2017

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1. Introduction

Energy efficiency as a way of proactively managing energy consumption as well as the

effective use of the available energy resources, is not a concept which is well entrenched in

South Africa. For many decades South Africa enjoyed the benefit of very competitively priced

electricity to end customers while the electricity network was relatively stable. Therefor it

could be argued that electricity as an energy source had an “unfair” advantage over other energy

options. It is however also important to note that a very large percentage of the population did

not enjoy access to electricity. It was only during ~1992 that the drive to improve access to

electricity really gained momentum. Energy is generally accepted as a key driver in respect of

economic growth and wealth creation in any country. This implies that the access to energy,

the availability and reliability of the energy source and the efficient use of energy becomes

critical. In the context of this report the focus is primarily on the electricity supply industry

(ESI) and the electricity distribution industry (EDI). In the South African context Eskom is the

dominant generator of electricity while they also own and operate the transmission grid. Eskom

is responsible for the generation of ~96% of electricity generated in South Africa. From a

distribution of electricity to end customers’ perspective, the municipalities and Eskom

(Distribution) are the primary service providers. Municipalities distribute electricity to ~60%

of the end customers while the balance of customers is supplied by Eskom. Eskom also supplies

electricity to the majority of the very large mining and industrial customers in South Africa.

The figure below reflects the ESI value chain as applicable to South Africa:

Figure 1: ESI value chain

South Africa currently finds itself in a situation where there are generation shortages and the

country is therefore faced with a significant generation expansion programme. In addition to

the “Eskom build programme” the government also embarked on the introduction of a

renewable energy programme and the introduction of Independent Power Producers (IPP). The

creation of the new generation capacity as well as the environmental compliance requirements


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are among the factors which will contribute to higher electricity prices. Therefore, the need to

introduce energy efficiency strategies, as well as effective energy and demand management,

are now greater than ever before. It is also essential that utilities will have to get “smarter” in

their business operation, asset management and customer management.

Technology deployment e.g. the introduction of smart grids, is globally regarded as a key

enabler to unlock efficiency, to facilitate growth and to enhance customer communication and

interface. The secret is however to identify the technology applications which will best serve

the requirements of a specific utility and their customers.


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2. Purpose of Report

This report reflects the status of energy efficiency technology research, development and

innovation (RDI) in South Africa based on a study undertaken by the Academy of Science of

South Africa (ASSAf). Furthermore, the report is aimed at informing the Department of

Science and Technology (DST) of opportunities which could be explored for further

development of human capital, intellectual property output, technology development and

innovation in the context of smart grids.


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3. Approach and Methodology

The objective was to collect relevant information from an electricity supply industry (ESI)

perspective which will assist in defining the state of energy efficiency in the context of smart

grids. In general, limited documented information is available on technology deployment in

South Africa since reporting on energy efficiency technology deployment is not a regulated or

reporting requirement. The South African National Energy Development Institute (SANEDI),

the utilities who participated in smart grid related projects under the guidance of SANEDI and

Eskom were found to have the best documented information pertaining to smart grids and

related technology deployment. Due to the time limitation associated with the assignment the

traditional approach in respect of site visits and one on one personal interviews could not be

pursued. An approach was adopted which included documentation collection and telephonic

interviews which was complemented by the personal industry knowledge and experience of

the independent researcher.

The methodology followed included the evaluation of available related reports, supporting

documentation and the research of appropriate practices and energy efficiency technology

deployment opportunities pursued by utilities. The research methodology and supporting data

collection was structured to provide a perspective in respect of:

Smart grids

Solid state lighting

Tribology

While all the documents referenced in Annexure A was not used in the compilation of the

report they were consulted by the author to among others verify some

views/learning/experiences.


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4. Electricity Supply Industry Perspective

4.1 Background

Considering the background to the electricity supply industry in South Africa it is important to

note that it is an industry that evolved over decades without driving towards a defined future

structure. Therefor it should be no surprise that the South African electricity distribution

industry is highly fragmented. The electricity service is predominantly being provided to

customers by ~175 licensed municipal electricity businesses and Eskom, the state owned

vertical integrated utility. The current model is inefficient and is not optimally serving the best

interest of the country, the economy and customers at large. Furthermore, the industry is faced

with significant financial and human resource skills shortages in addition to; among others

price inequality, inconsistent service to customers and a significant maintenance, refurbishment

and infrastructure strengthening backlog.

The Energy White Paper1, approved by Cabinet in December 1998, among others, informed

the ESI reform mandate and process. As articulated in the Energy White Paper, among others

Government supports the gradual steps towards a competitive electricity market while

investigations into the desired form of competition are completed. It furthermore indicated that

Eskom will be restructured into separate generation and transmission companies. Government

supports the development of the Southern African Power Pool (SAPP). The introduction of the

energy regulatory regime as well as the establishment of the Electricity Distribution Industry

Holdings Company, are some of the measures which were introduced by the Government to

improve the industry governance, performance and efficiency2.

4.2 Regulatory regime

The National Electricity Regulator (NER), now the National Energy Regulator of South Africa

(NERSA), was established on 01 April 1995. In essence the objective of the NER was to ensure

order, structure and sound decision making in the electricity supply industry.

While the electricity distributors in South Africa are required to have a license issued by the

National Energy Regulator of South Africa (NERSA), the Constitution presently grants

municipalities’ executive authority over, and the right to administer, electricity reticulation.

This arrangement fundamentally implies that Municipalities in South Africa have

constitutional and other legislative rights to supply electricity within their local boundaries

while Eskom has legislative rights to supply throughout South Africa where municipalities, or

other licensees, are not supplying. This renders a very complex arrangement and as a result, it

is very difficult to regulate and monitor the industry while it is not possible for national

1 Source: 1998 White Paper on the Energy Policy of the Republic of South Africa 2 Source: 1998 White Paper on the Energy Policy of the Republic of South Africa


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government to put in place effective governance, regulatory and investment frameworks for

the entire electricity supply industry.

Pockets of good performance in the current EDI are recognised. However, the role of NERSA

is somewhat compromised while the viability of the industry is under risk. The industry risks

are among others due to the underinvestment in infrastructure by the current asset owners and

ineffective business practices.

In addition to the establishment of the Regulator, government also introduced the reform of the

Electricity Supply Industry in South Africa, starting with the EDI.

4.3 ESI reform

The need for the restructuring of the ESI in South Africa was identified by government as an

important initiative to ensure economic growth and stability in the electricity sector. The desire

to improve the financial viability and sustainability of electricity sector; to attract investors, to

guarantee equitable treatment of customers in respect of prices and quality of supply and

service; to remove existing inefficiencies resulting from a fragmented distribution sector; to

ensure economies of scale; to recapitalise the currently under-funded electricity distribution

network assets; and to ensure that, among others; the national electrification programme is

undertaken in a co-ordinated manner reflects some of the key drivers.

During 1997 Cabinet approved the Electricity Industry Interim Committee (ERIC) report,

which recommended the restructuring of the Electricity Distribution Industry into a number of

Regional Electricity Distributors (REDs). A further decision was taken by Cabinet in 1999 to

approve the transitional process to move the industry to the RED structure. These decisions by

Cabinet led to the establishment of, the Electricity Distribution Industry Restructuring

Committee (EDIRC) in 1999. The key objective of the EDIRC was to develop proposals and

recommendations to implement the Cabinet resolutions.

During 2003 the Electricity Distribution Industry (EDI) Holdings Company was established as

the first step in the restructuring process. The objective was to use EDI Holdings as the vehicle

to drive the reform process and to establish the REDs. Despite good progress, challenges

pertaining to the formulation of reform enabling legislation and conflict in the powers and

functions of municipalities, substantially impacted on the progress towards establishing the

REDs.

On 08 December 2010, the Cabinet passed a resolution to close EDI Holdings on 31 March

2011 and to discontinue the process of creating the REDs. The media release3 stated that:

“Cabinet decided to terminate the Electricity Distribution Industry (EDI) restructuring and to

discontinue the process of creating the Regional Electricity Distribution (REDS) with

immediate effect. Although the Electricity Distribution Industry Holdings (EDIH) had made

significant progress in establishing the REDs, Cabinet approved the recommendation that the

Department of Energy takes over the programmes previously executed under the EDIH

mandate. The department will review the whole electricity value chain with a view to

3 Source:2010 December 09: GCIS Press Release


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developing a holistic approach to revitalise electricity infrastructure, energy security as well

as the financial implications. An administrator will be appointed to attend to the winding up of

EDIH. The EDIH Board will remain accountable until the end of the 2010/11 financial year.”

The establishment of a well-functioning Regulator, supported by a structured industry reform

process, would have gone a long way towards a sustainable industry.

5. Review and Assessment of historic and current energy saving

technologies

5.1 Historic energy saving technologies

In relation to this report, the importance of the background provided in the first sections is to

provide context in respect of the environment in which the industry in question is operating in.

It also provides some appreciation for the impact of the absence of integrated reporting on

among others the introduction of energy efficiency initiatives and technology deployment.

Furthermore, it provides insight into the complexity to introduce efficiency improvement

measures in an integrated manner, while it explains why South Africa finds it difficult to yield

optimal energy efficiency results.

It is widely recognised that South Africa has an energy intensive economy which enjoyed the

benefit for many decades from relatively low cost electricity and high network/grid reliability.

The historic energy saving strategies and technologies applied were not driven from an energy

efficient use perspective.

5.1.1 Ripple control

As stated, historically energy efficiency saving strategies in the pure sense of the definition was

not pursued. The initiatives pursued were mainly informed by the need to manage network

loading and maximum demand reduction. Network loading refers to the impact on the

infrastructure used to supply electricity to customers as a result of the real time electricity

consumption of the customers supplied. Exceeding the ability of the infrastructure in question

to supply the load could result in increased technical losses, network overloading and supply

interruptions. Exceeding the maximum notified demand i.e. the contracted capacity to be made

available through the bulk supplier of electricity e.g. Eskom, results in penalties. The initiatives

pursued therefor had an impact on the improvement of the power system efficiency and was

not aimed at energy efficiency improvement from a customer perspective. Considering the risk

to the network and the risk of financial penalties, the ability to manage the load and to interrupt

the customer load through a controlled intervention, would therefore be the preferred option.

To this end the use of Ripple Control was found to be rather effective from a power system

efficiency perspective, while power factor correction was also pursued to a certain degree.

Power Factor correction did contribute to the efficiency improvement of the end use loads. In

most cases the key power factor correction driver was however the potential reduction in the

electricity bill to be paid to the relevant utility. Ripple Control was deployed mainly in the

larger municipalities as well as some of the secondary municipalities. In the main


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geyser/electrical hot water cylinder related load was targeted. The Ripple Control load

management initiatives mainly impacted on the commercial and domestic sector. The current

status in the industry is that most of the installed Ripple Control related equipment is not

functioning. While the use of Ripple Control in load management might not be the “smartest”

technology available, it remains a relative effective load management tool while also improving

the efficiency of the power system. Ripple Control was not pursued by Eskom and mainly

informed by the customer base served and alternative measures deployed to manage the load

profile and energy consumption. Some of the measures introduced by Eskom to manage

network loading and energy consumption included load shedding, alternative tariff models, and

specific contractual arrangements.

While the historic initiatives described could by “default” have energy efficiency improvement

“flavour,” the key driver was not energy efficiency but rather load or demand management.

5.2 Current energy saving technologies

5.2.1 Efficiency initiatives

The electricity supply landscape changed significantly since 2007. While South Africa did

experience some generation shortages in the mid 80’s, it did not result in the extensive load

shedding challenges experienced during 2007 and 2008. The greater environmental awareness

plus the electricity supply challenges and increase in electricity prices, created the desired

platform to review the approach and focus in respect of the efficient use of the available energy

resources. Against this background the Energy Efficiency and Demand-Side Management

(EEDSM) programme, which target the reduction of electricity consumption in municipalities,

was initiated in 2009 by National Treasury and later handed over to the Department of Energy

(DOE). The interventions were mainly aimed at retrofitting of existing municipal infrastructure

such as public lighting, street- and traffic-lighting and municipal building lighting with energy

efficient technologies. In total 54 municipalities participated in the programme. These

efficiency initiatives were demand side related and while it should have a positive impact on

the electricity system, it will be difficult to assess the real efficiency improvement derived from

the EEDSM initiative since municipalities do not follow a practice of effective business ring-

fencing and neither was the base line defined at programme introduction.

Furthermore, industry wide initiatives were embarked on to promote the efficient use of energy

through strategies aimed at:

Geyser/hot water-cylinder insulation improvement

Replacement of incandescent lamps with compact fluorescent lamps (CFL)

Solar hot water geyser rollout

In respect of geyser/hot water-cylinder insulation improvement and CFL introduction, Eskom

played a leading role while numerous municipalities also participated in the programme. While

the CFL initiative was well received by the industry and customers, the sustainability of the

initiative can be questioned. There is a substantial cost difference between the CFL and the

normal incandescent lamp. This implies that there is a risk that a customer might default to the


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less efficient option should the CFL fail. The solar hot water geyser rollout was primarily a

DOE initiative implemented with support from municipalities and Eskom. This initiative was

also well received, however the absence of an effective maintenance strategy renders a large

percentage of the installed geysers not functional4.

The Building Regulations & Building Code (SANS 10400-XA:2011 and SANS 204)

require in the built environment construction standards pertain to energy use and energy

efficiency in buildings. This requirement is applicable to all plans submitted for municipal

approval. Furthermore, SANS 941: Energy efficiency of electrical and electronic apparatus

covers the measurements and energy efficiency labelling of electrical and electronic

apparatus.

From a legislative perspective National Treasury proposed Carbon Taxes to incentivise energy

efficiency5. National Treasury and DOE have also gazetted Energy Efficiency Tax Incentive

Regulations aimed at incentivising investment in energy efficiency initiatives.

To address efficiency improvement effectively requires political, policy, regulatory, incentive,

stakeholder and electricity supply industry alignment.

5.2.2 Street lights

Over the last couple of years’ numerous municipalities pursued energy efficiency

improvements related to street lighting. The energy efficiency initiatives pursued, in the main

related to areas where funding incentives were provided. For the purpose of this report “street

lighting” refers to the lighting provided on major and minor roads or streets, as defined in

SANS 10089. High masts street lights are excluded since numerous local authorities have

adopted a decision to do away with this category of street lights.

The estimated 1,8 million street lights in South Africa provides an important service. The

annual cost is estimated at R 400 million with an energy consumption estimated at 1 GWh of

electricity and responsible for about 1 million tons of CO2 emissions. The annual energy

consumption is comparable with that of 150,000 South African homes. Street lighting accounts

for ~ 2 % of the typical municipal electricity consumption and as such it would contribute

between 0.8 and 1.2 % to the national electricity load. However, if the municipality’s internal

consumption is considered, it represents up to 20% of the overall internal consumption of a

municipality.

The street lights utilised in South Africa by local authorities range from very inefficient fittings,

some installed in the 1960’s, up to reasonably efficient modern fittings and even in some cases,

state of the art energy efficient street lights. Most of the municipalities and Metros in South

Africa are already utilizing efficient light sources, such as High Pressure Sodium (HPS).

There are basically three distinct options available to improve energy efficiency in respect of

street lights. These ranges from (1) retrofit of lamps and luminaire mountings (2) implement

4 Note from interview with Mr M Bukula 5 Carbon Taxes-2013/2014


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power and/or ballast switching and (3) install state of the art technology street lights in order

to do technology quantum leaping.

Table 1: Streetlight efficiency improvement

Options Examples Comments Efficiency

improvements

Retrofit Replacing

Mercury Vapor

(MV) luminaries

with High

Pressure Sodium

(HPS) luminaries

An economically

favorable option is to

replace higher

wattage MV

luminaries (at the end

of their useful life)

with HPS luminaries.

Various local

authorities have

initiated such projects

under the DoE

Energy Efficiency

(EE) lighting

strategy.

A change of lamp to

a different type

requires the change

of the electrical

control gear,

typically consisting

of electrical ballast,

igniter, condenser, as

well as the light

luminaires.

Retrofit could

contribute to

sustainable

energy

efficiency

improvements

Reflector

replacements

By using the

correctly designed

reflector, the energy

consumption can be

reduced dramatically

without reducing the

lighting levels

Replacing MV

and HPS with

57W CFL

luminaries

Replacing luminaries

with 57 CFL

luminaries.

Technically the 57W

CFL luminary is not

as reliable as the

conventional lamps.

Replacing the

luminaire with

a more energy

efficient

alternative will

improve the

efficient use of

energy


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improvements

Power and/or

ballast switching Voltage reduction

systems

A voltage regulator

reduces the lamp

current and therefore

the luminous flux by

means of input

voltage reduction.

Only appropriate for

HPS and Mercury

Vapour lamps.

Applicable for

original over

designed street light

network systems.

Effective

voltage

management

could directly

contribute the

system

efficiency

improvements

Power switching

Power switch enables

the reduction of

luminous flux and

energy consumption

during hours of lower

use.

Ballast switching Replace conventional

with electronic

ballasts.

State of the art

technology Tele-management

Communication

system that controls

individual luminaire

by means of RF or

GSM technologies.

“Smart” electronic

ballasts are required

for this

communication with

the lamp.


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improvements LED lamps

Used more and more

in the role as street

lights, but is currently

much more expensive

than conventional

street lamps.

Can be used in

conjunction with

renewable energy

supply options.

In general

LED’s provide

the potential

for lower

energy

consumption

for the same

light output

derived from a

more energy

intensive

option which

directly results

in improved

efficiency

Induction lamps Emerging lamp

technology that has

not been used in

South Africa, but is a

growing technology

in the rest of the

world.

To be able to measure the efficiency improvement derived from the introduction of the

initiatives described above will require the establishment of the “as-is” baseline, registering of

initiatives and monitoring of the rollout of the relevant initiatives.

5.2.3 Tribology

From an energy efficiency improvement perspective, the research did not present many

comprehensive examples of tribology related initiatives within the electricity supply industry

in South Africa.

6. Smart Grid: South Africa

6.1 Smart Grid technology deployment in efficiency improvement

The efficiency initiative information provided in section 5 above indicates that the approach

adopted to date in South Africa did not take the integrated electricity supply system into

account. Furthermore, the initiatives did not form part of a national energy efficiency

improvement plan. The focus was mainly on demand side improvements. While the initiatives

pursued should contribute to a change in the load profile and “flattening” of the system demand,

it will not necessary result in improved network management, reduction of losses, improved


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business sustainability, energy portfolio optimisation, etc. It is important to note that improved

matching of supply and demand may make the power generation system more efficient and

result in overall energy efficiency improvements in terms of primary fuel consumption even if

end use energy consumption is largely unchanged. To be able to achieve the required balance

from an energy efficient use perspective requires an integrated plan underpinned by

grid/network/plant and customer related intelligence and real time system management

capabilities. Reference to “the system” includes the national electricity system as well as the

system under the control of the relevant utilities e.g. municipalities. Without an integrated

energy efficiency implementation plan, it is doubtful whether the 12% energy efficiency

improvement target reflected in the Energy Efficiency Strategy of South Africa (2005) was

achieved by 2015.

Globally smart grid deployment is pursued with great success to achieve among others the

above stated objectives. The objective to move towards a more intelligent and visible grid is

fundamentally driven by the need to be more energy efficient. Due to the importance of energy

efficiency and the role it plays in economic growth, attractive incentives were provided to move

towards a smarter grid in America, Europe and the UK.

While there are many ways in which a smart grid can be defined, the definition adopted by the

South African Smart Grid Initiative (SASGI), as derived from the European Technology

Platform Smart Grid (ETPSG), defines the smart grid as follows: - “A Smart Grid is an

electricity network that can intelligently integrate the actions of all users connected to it –

generators, consumers and those that do both – in order to efficiently deliver sustainable,

economic and secure electricity supplies.”

Based on ETPSG definition, Smart Grid employs innovative products and services together

with intelligent monitoring, control, communication, and self-healing technologies to:

Better facilitate and manage the connection and operation of all sources of energy.

Give consumers more choice so they can help to optimise energy use.

Provide consumers with greater information and choice of supply.

Significantly reduce the environmental impact of the whole electricity supply system.

Deliver enhanced levels of reliability and security of supply.

In considering the objectives reflected above it is clear that the smart grid will directly

contribute to energy efficiency improvement. A smart grid provides the capability to manage

the industry value chain in an integrated manner while visibility is enhanced which facilitates

proactive decision making and optimisation. The ability to introduce effective load

management, demand response, real time pricing, etc. is dependent on effective customer

interface, grid visibility and plant/network control. It is important to note that “integrated”

energy efficiency from a system perspective is impacted by among others:

The efficiency of power generation, as it links to load profile, variability and matching

of supply and demand e.g. using energy in periods of lower generation cost and resource

availability i.e. when renewable energy is abundant.


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The efficiency of the transmission and distribution grid i.e. load and no-load technical

loss reduction, reduction in line losses, transformer core losses, etc.

The efficiency in the end use consumption of energy which is influenced by tariffs, load

control etc. Billing and revenue recovery is also core to this as users that don’t pay for

energy use are unlikely to use energy efficiently.

Managing energy efficiency effectively therefore implies a focus on the entire value chain, i.e.

generation, transmission, distribution and the end customer – it cannot be an end

customer/demand focus only. It is acknowledged that the generation of electricity and heat

contributes to greenhouse gas emissions. It must also be appreciated that the electricity demand,

the use of electricity and the managing of the network/grid directly contributes to the generation

requirements. In the constant balance of production and consumption the efficient use of energy

and the ability to leverage alternative energy options, inclusive of storage capabilities become

mission critical. The various applications offered as an integral part of the smart grid solution

provides the key to improved energy utilisation and to address the challenges reflected above.

The extent to which Smart Grids are deployed in South Africa must not be underestimated. The

reality is that from a transmission and the upper end of the distribution voltages, significant

smart grid functionality is present. However, if we consider the distribution infrastructure in its

broader context and in particular at the lower voltages, very little and in some cases no

advanced technology deployment is present. It is for this very reason that the distribution

industry is confronted among others with extended outages, high losses (technical and

billing/theft related), inefficient energy utilisation, limited data which could be used to enhance

decision making and virtually no customer participation/communication. It is however

important to keep in mind that most of the current distribution infrastructure was designed and

built with a 20th century reference. It is therefore important to enhance the grid intelligence to

be able to facilitate aspects such as demand response, energy conservation, the introduction of

renewable energy options, outage management, grid self-healing, etc. The smart grid related

initiatives currently pursued in South Africa are mainly driven by the need to improved

renewable energy integration, decarbonizing the electricity generation, improve the ability to

effectively manage the grid, improve the network reliability and availability, reduce operating

costs and to respond to national imperatives. Energy efficiency is not the primary driver. The

transition towards smarter grids are however slow since funding support is limited. Despite the

pockets of progress, technology deployment e.g. smart grids are not leveraged to its full

potential. Once the electrical systems are “enabled from a smart grid perspective” it will be

substantially easier to accommodate the flexibility required in the management of renewables.

Therefore, smart grids can directly contribute to the reduction in CO2 emissions, eliminating

one of the main causes for climate change.

The initiatives pursued by the utilities in South Africa can broadly be categorised into the

following areas:


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Initiative Focus Impact on Energy

Efficiency

Distributed power

generation

Facilitate integration of

alternative energy options

harvesting clean energy

sources and move from

“unidirectional” to “bi-

directional” energy flow

Directly contributes to the

optimisation of the potential

energy portfolio

Improved revenue

management

Improved revenue

realisation

Indirectly influence energy

consumption and efficient

use of energy

Energy efficiency and

demand side management

Loss reduction,

network/plant loading and

demand reduction

Direct focus on efficient use

of energy

Outage Management Reduce network down time Indirect focus on efficient

use of energy

Improved grid/network

visibility

Improved ability to monitor

plant/equipment, to

effectively deploy resources

and real time optimisation of

network switches and

voltage control thereby

reducing line losses and

energy consumption

Indirect contribution to

energy efficiency

Active network

Management

Improved ability to manage

grid/network real time and

to optimise network loading

Direct contribution to

energy efficiency e.g.

flattening of the load profile

will reduce technical losses

and the maximum demand

Advanced asset management Reduce asset down time,

optimise operating costs and

extend asset life

Indirect contribution to

energy efficiency

While the “smartness” of a specific network must be defined by the asset owner; the

development of a smart grid, inclusive of the required back-office support, is a “technology

journey” and not a single event. While smart metering is pursued by most of the utilities in

South Africa, from a smart grid deployment perspective, the following South African entities

are making the best progress towards a smarter grid:

City of Cape Town

City Power

Eskom

Ethekwini Metropolitan

Nelson Mandela Bay Municipality

Considering the energy challenge which South Africa is faced with, there is an urgent need to

enhance the efficient use of the available energy portfolio. The inability of utilities to

effectively introduce energy efficiency and demand side management in the context of


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16

integrated demand management (IDM) stems from the absence of effective grid/network

visibility, active network management capabilities and/or remote switching capability. This

implies that the larger percentage of utilities in South Africa do not have the technology

capability to manage their load profile and demand in real time. To facilitate effective energy

management smart grid capabilities are of critical importance. Furthermore, outdated plant and

equipment in some cases compromise the ability of utilities to deploy near-real time network

management practices. Numerous municipalities are confronted with exceeding their notified

maximum demand (NMD) which results in network demand exceedance penalties. The more

important challenge is however the negative impact on the national grid inclusive of the

inefficient energy utilisation and generation requirements. This is an area where applications

within the suit of smart grid functionalities could be deployed to improve energy efficiency.

This is an example of an initiative which could present substantial local and national efficiency

improvement benefits.

Smart grid technologies fundamentally introduce a layer of digital intelligence to the grids and

marry the interface between the classical grid infrastructure and the information technology

capabilities. In this way the industry is enabled to respond to grid dynamics, restore power

interruptions, accommodate alternative energy options, facilitate demand response strategies,

etc. The importance of the interdependency between policy, standards and technology must be

appreciated. Without an overall integrated approach and enabling policies the roll out of Smart

Grids could result in less than optimal results.

The European Commission stated on 04 December 2011 in Brussels: “The European Union

2020 agenda comes across with a clear message for Europe. The EU’s future economic growth

and jobs will increasingly have to come from innovation in products and services for Europe’s

citizens and businesses. Innovation will also contribute to tackling one of the most critical

challenges Europe is facing today, namely ensuring the efficient and sustainable use of natural

resources. The development of our future energy infrastructure must reflect this thinking.

Without serious upgrading of existing grids and metering, renewable energy generation will

be put on hold, security of the networks will be compromised, opportunities for energy saving

and energy efficiency will be missed, and the internal energy market will develop at a much

slower pace.” The report further states: “Smart Grids provide a platform for traditional energy

companies or new market entrants such as ICT companies, including SMEs, to develop new,

innovative energy services while taking due account of data protection and cyber-security

challenges. That dynamic should enhance competition in the retail market, incentivise

reductions in greenhouse gas emissions and provide an opportunity for economic growth.”

In an article published on 22 April 2013 in energies, the author, Rosario Miceli, reflects on the

benefits derived from the introduction of a smart grid and states: “Targeting environmental

sustainability, energy efficiency and new power distribution, business models have to be

evaluated. Moreover, innovative, energy-aware, flexible and user-centric solutions, able to

provide interactive energy monitoring, intelligent control and power demand balancing at the

home, block and neighbor level are needed. These solutions will interconnect legacy

professional/consumer electronic devices with a new generation of energy-aware white-goods


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17

in a common network, where multi-level hierarchic metering, control and scheduling will be

applied, based on power demand, network conditions and personal preferences. Moreover,

renewable energy systems that will optimize and integrate, for example, an innovative

combined photovoltaic/solar (CPS) system can be used. These systems will provide hot water

for white goods (such as a dishwasher and washing machine) in order to strongly decrease the

energy consumption and the CO2 emissions at home by reducing/removing the heating

operational cycles; electrical energy from renewable energy sources (RES), which can be

utilized at home and during peak periods, even fed to the electricity network in a reverse power

generation/distribution business model. Information from CPS system will be shared in the

management network and used for a new set of energy management rules in order to maximize

energy savings and environmental savings at the home, block and neighbor level. In addition

to the energy management methodology to be used at the load level, they are now emerging in

smart grids in the vision of power system innovation”. The article further states: “Reliability,

efficiency and safety improvements of power distribution networks are accomplished through

communication and computing technologies. Smart grids can enhance the energy efficiency of

the grid to the benefit of the end-users by both coordinating and scheduling low priority home

devices, so that their power consumption takes advantage of the most appropriate energy prices

and/or energy sources at a given time. Furthermore, real-time information transmitted over

communication networks will allow power outage anticipation, as well as service perturbation

detection. By rapidly detecting and analyzing data coming from the distribution network, the

smart grid will be in a position to take corrective actions, so as to restore power stability when

needed. Harmonizing local distribution at the house level with energy distribution at a larger

level can also reduce grid congestion. Last, but not least, an enhanced electrical grid is expected

to lower CO2 emissions by reducing end-user energy consumption during peak hours, when

electricity is generated through power plants that produce a lot of CO2 emissions.”

A May 2011 report by the Asia-Pacific Economic Cooperation (APEC), titled “Using Smart

Grids to Enhance Use of Energy-Efficiency and Renewable-Energy Technologies,” states the

benefits to be derived through smart grid deployment in respect of energy efficiency is

recognised. The report however also states: “The engagement of end-use systems in demand

response through real-time pricing signals or other incentives is low, with wealthier and more

urban member economies showing the most activity in this direction. Of all smart grid

technology deployments, advanced metering infrastructure is receiving the most attention.

While this is a logical first step in a roadmap of smart grid deployments that will enable other

capabilities, it is only a start and addresses a small fraction of the potential benefits from

implementing smart grid capabilities. Even after measurement and communications systems,

such as AMI, are installed, significantly more work will be needed to advance energy efficiency

and support the integration of significant amounts of renewable resources.”

The International Telecommunication Union (ITU), produced in 2012 a report titled: “Boosting

energy efficiency through Smart Grids.” The report recognised the potential to improve

efficiencies, manage the expected industry change and addressing climate change through the

deployment of smart grids. However, it also emphasised the importance of following a systems

approach taking into account the entire value chain from generation to the end-customer.


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18

Furthermore, the report states: “In order to maintain the grid stability in the presence of great

amounts of variable production from renewable sources, a large effort is required to control

other generators and/or the energy demand (loads) by actively involving the users to modify

their consumption according to the current production. The actual electrical grid control

method, with production that follows the “user demand”, is expected to change towards a more

flexible scheme, in which the “user demand” can be influenced or partially controlled

depending on renewable production availability. This evolution will change the whole

electricity supply chain, from generation, transmission and distribution to the customer side.

The current system will progressively see an increasing number of “prosumers”, namely, users

that are both producers and consumers. The variable and unpredictable power production from

renewable energy sources in different hours and seasons will require flexible dynamic loads

and large storage capacity to keep an optimal balance between availability and demand of

electric energy. Advanced types of control and management technologies for the electrical grid

can also contribute to a more efficient operational running of the overall system. These

technologies include devices such as smart electricity meters that show real-time use of energy

and that can respond to remote communication, enabling dynamic electricity pricing related to

real production and distribution costs.”

Furthermore, the report states: “Distribution is the most affected domain by the Smart Grid

implementation. Indeed, the distribution grid has to integrate dispersed small/medium size

generators and manage bidirectional power flows on a grid designed for unidirectional flows.

The distribution grid is where end users are connected and where Advanced Metering and new

policies of demand management can be implemented. Widespread adoption of PEVs (Plug-in

Electric Vehicles) and PHEVs (Plug-in Hybrid Electric Vehicles) will bring additional and

critical load to the grid.

The availability of distributed generators gives a real chance to have local production where

electric power is needed. This approach can reduce the bulk of energy transferred by long

transmission lines and bring more efficiency, due to less power losses. This can also increase

the local reliability of the power systems and provide better efficiency by using local renewable

resources (wind, water, sun, biomasses).

The integration on the distribution grid of a great number of partially predictable variable

sources and of new types of loads poses grid operation issues that require new control and

protection schemes. One of the possibilities to balance generation and load in real time is to

involve consumers, by asking them to modify their normal consumption patterns in response

to a utility's need.”

In general, the reports referenced indicate that among others energy efficiency improvements

in the electricity value chain can be achieved through smart grid deployment. It is however

important to note that effective smart grid rollout starts with effective planning followed by

selecting applications within the suit of smart grid options which will best serve the

requirements of a specific utility. Therefore, it is important to evaluate the available options

and subject the options selected to a pilot site, before embarking on a mass rollout. South Africa


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19

substantially lags the international smart grid leaders in respect of deploying smart grid

applications to improve efficiency.

From a local perspective, entities/institutions conducting a level of research in respect of smart

grid applications were considered. Cases were not considered where smart grid applications

were procured and implemented without a level of classical research.

In the case of South Africa, the available research reports are limited largely to SANEDI,

Eskom, the National Cleaner Production Centre of South Africa and GreenCape. Through the

SANEDI applied research programme, pilot sites were established in 9 municipal areas to pilot

smart grid related applications to improve efficiency in the electricity value chain6. The pilot

site selection was not driven from an energy efficiency perspective at the core but rather from

a business sustainability and service delivery improvement perspective. The pilot sites and the

applications applicable are reflected in the table below:

Table 2: Pilot sites

Site Research Objectives Smart Grid Application

eThekwini To assess the readiness and

technology deployment status

of the business

To enhance asset management

through a smart grid

Smart Grid maturity

assessment

Advanced Asset

Management

City Power To assess the readiness and


of the utility

To evaluate the system

requirements when multiple

tariff options, inclusive of IBT,

are made available to customers

Smart Meter deployment

Load Limiting through

smart meters

Tariff switching through

smart meters

Govan Mbeki To assess the readiness and


of the business

Revenue enhancement

Smart Grid maturity

assessment


Nala To assess the readiness and


of the business

Revenue enhancement

Smart Grid maturity

assessment


Naledi To assess the readiness and


of the business

Revenue enhancement

Smart Grid maturity

assessment


Nelson Mandela Bay

Municipality To assess the readiness and


of the business

Smart Grid maturity

assessment

Asset management

6 Note from interview with Mr T Yusuf, SANEDI


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20

Site Research Objectives Smart Grid Application

Smart grid enabled asset

management

Mogale City To assess the readiness and


of the business

Smart Grid maturity

assessment


Msunduzi To assess the readiness and


of the business

Smart Grid maturity

assessment

Asset Management

Thabazimbi To assess the readiness and


of the business

Smart Grid maturity

assessment


SANEDI is also involved in conjunction with DOE in a project aimed at energy efficiency

improvement in targeted government buildings through smart grid applications. While the

required base line evaluations were conducted, the metering requirements addressed and the

project governance established, reports were not available to be considered for inclusion in this

report.

Eskom conducted smart grid related research among others in the following areas, to improve

efficiency in the electricity value chain7:

Table 3: Eskom Smart grid related research

Research Objectives Smart Grid Application Potential Impact on

Energy Efficiency

Improve generation

black start capability Plant and grid dynamic

management

No direct impact on

efficient use of energy

Improved grid &

equipment visibility Supervisory control and data

acquisition (SCADA)

Indirect impact on


Improved remote plant

& equipment condition

monitoring

Advanced asset management Indirect impact on


Improve customer

interface and enhance

revenue management

Smart metering

Metering Data Management

System (MDMS)

Direct impact on efficient

use of energy

Enhance system loading

under controlled

conditions

Grid sensors Direct impact on energy

efficiency

Improve communication

reliability and capacity

Architecture development No direct impact on


Improved Overhead Line

visibility and enhance

flexibility in respect of

managing line thermal

rating

Line Sensors Direct impact on efficient

use of energy

7 Note from interview with Mr N Singh, Eskom


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21

Research Objectives Smart Grid Application Potential Impact on

Energy Efficiency

Improve efficiency of

workforce deployment

Active workforce deployment No direct impact on


Improved customer

participation in energy

efficiency

Home energy system/control Direct impact on efficient

use of energy

Understanding the

system dynamics when

disruptive technologies

are introduced (PV

Rooftop, etc.)

Advanced asset management Direct impact on efficient

use of energy

Enhance ability to

electrify deep rural areas Micro grids Direct impact on efficient

use of energy

Improve energy

management in the

distribution component

of the ESI

Integrated demand side

management

Energy trading

Direct impact on efficient

use of energy

Optimise use of smart

grid related investment

through leveraging

interoperability

Advanced infrastructure

management Indirect impact on


The South African Industrial Energy Efficiency Project, hosted by the National Cleaner

Production Centre of South Africa, assisted industry in South Africa to reduce their energy

consumption and their greenhouse gas emissions. This initiative resulted in an avoided energy

cost estimated at R1,76 billion over the past 5 years8.

The following universities established specific competencies which could be leveraged from

an energy efficiency and smart grid perspective9:

Table 4: University Smart grid related research

University Competency that could be leveraged

University of Cape Town Modelling & Simulation

Durban University of Technology Real time simulator

University of KwaZulu-Natal Real time simulator

HVDC

University of Pretoria Energy Efficiency and Demand Side

Management (EEDSM) – National Hub

and Smart Grid laboratory

University of Stellenbosch Energy storage & renewable technology

Power Quality control

Solid stator transformer

8 Sashay Ramdharee, Project Manager, Energy Systems Optimisation. 9 Note from interviews with Dr M Bipath, Dr J Rens, Mr P Groenewald & Mr N Singh


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22

In respect of the University of Pretoria, the university hosts the National Hub for Energy

Efficiency and Demand Side Management (EEDSM) within their Centre of New Energy

Systems. Indications are that the Centre attracts many postgraduates from across the country,

as well as international students into the energy efficiency programmes10.

From a broader industry perspective, a number of international companies are investing in

smart grid technologies to improve energy efficiency. These initiatives are mainly driven from

a product development and marketing perspective. Smart grid application suppliers like ABB,

GE, Siemens, Ventyx, Oracle, etc. are investing in smart grid RDI. Electricity distribution

utilities are less committed to invest in technology research, development and innovation

(RDI). However, most of them are willing to report back on their smart grid implementation

experience. The results from three reports are reflected to illustrate the points made above.

Ventyx produced a report during May 2013 which indicated that efficiency improvement in

the electricity value chain can be realised through a smart grid. In the list below the smart grid

applications/initiatives highlighted reflects contributions (directly or indirectly) to energy

efficiency improvement.

Outage reduction

Reduction in equipment operation

More accurate grid/network calculations

Improved capacity management

Improved network predictions

Accurate network loading estimations

Improved mitigation plans

Reduced peak demand

Improved resource utilisation

Improved resource dispatching

Improved reporting and compliance

Improved customer interface

Confidence in grid/network status

Efficient feeder topology

Improved use of feeder capacity

A report produced by ABB11 indicated that the deployment of a smart grid is essential in

providing data to power effective asset health management.

In a presentation presented by Mr Sandile Maphumulo (Head of Electricity, eThekwini) during

January 2012 at the Grid Week in Mumbai, he highlighted the following benefits/efficiency

improvement which they derived from pursuing smart grid related applications. The smart grid

10 Note from interview with Dr M Bipath, SANEDI 11 ABB. Asset management. The next generation maintenance strategies


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23

applications/initiatives highlighted reflects contributions (directly or indirectly) to energy

efficiency improvement.

Efficient and cost effective response to emergencies

Improved load management

Improved technical loss management

Improved outage management

Improved network reliability and availability

Improved asset management

The table below represents a consolidated perspective of smart grid related technology

applications that could be pursued to enhance efficiencies in the electricity value chain. The

functionalities contributing directly to energy efficiency includes:

Accurate loss management and loss reduction

Technical loss reduction, network optimisation and energy balancing

Capacity management and network loading

Figure 2: Table of Technology Applications

From the above it is clear that there are numerous opportunities to improve energy efficiency

through the deployment of smart grid technology applications. Energy efficiency as a specific


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24

objective should however be included in the current assessment and benefit realisation criteria

of smart grids in South Africa.

6.2 Smart Grid related research and technology development opportunities

While it is true that a substantial portion of the electricity infrastructure in South Africa is old

and requires refurbishment or replacement, it is also true that this is not implying that a smarter

grid cannot be pursued. The investment required in the electricity infrastructure actually

presents the ideal opportunity to pursue the deployment of smart grid related applications. The

DOE is in possession of a substantial report, referred to as the Approach to Distribution Asset

Management (ADAM), which reflects the infrastructure investment requirements. The

selection of the appropriate technology applications can assist the electricity supply industry in

achieving the business objectives. It is however important to note that energy efficiency

improvement might not be the core driver and rather a “benefit by default.” From a South

Africa perspective, smart grid deployment to date was mainly considered from a business

sustainability improvement and service delivery perspective. There is merit in evaluating the

smart grid business case for South Africa, also from an energy efficiency perspective. Moving

energy efficiency to the core of the smart grid deployment could enhance the benefit realisation

and improve the return on the investment.

It is critical for the utilities in the energy sector to define the enterprise Information Technology

(IT) architecture taking into account the technology deployment vision as well as the

Operational Technology (OT) requirements to render an effective electricity value chain. If the

IT and OT requirements are not well defined, it could among others lead to the wrong selection

of the communication protocol and specification of the data transfer capability. Among others

accurate data is important to facilitate effective energy efficiency initiatives. Furthermore, it is

essential in the selection of technology applications that aspects such as; interoperability,

upgradability, security, safety, cost and performance are addressed. The technology

deployment must facilitate two-way digital communication, wide-area situational awareness,

improve energy efficiency, improve network management, load management and improve

customer interface. Without achieving the above, the smart grid will not produce the expected

value.

In selecting technology, it must be kept in mind that the technology supplier and technology

support provider will become a “business partner”. Therefore, this relationship must be kept in

mind when systems, application, business solutions, etc. are researched, developed and

ultimately procured. It is therefore important to pursue smart grid related technology research

in an objective manner and to avoid “dominant influence” from a small group of technology

suppliers/developers.

The study underpinning this report revealed that the current smart grid initiatives in South

Africa are more focussed towards the Distribution business. The underlining objectives, as

stated before, are to improve business sustainability and service delivery while energy

efficiency improvement for the ESI is not a core driver. While the energy improvement


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25

efficiency potential to be derived through the smart grid is recognised, the overall potential has

not been quantified. This is an area requiring further research with the objective to assess the

energy efficiency potential associated with the various smart grid applications. Research in this

regard will be of utmost value in the compilation of an integrated smart grid plan or the ESI in

South Africa.

Options which could also be explored to improve energy efficiency through smart grid

deployment include, but are not limited to:

Integrated demand management at utility level

Real-time energy monitoring

Energy portfolio optimisation at utility level by embedding wind and solar

Embedding alternative energy options at utility level to defer network capital

requirements and to improve network loading

Embedding rooftop PV at utility level as part of the utility service offering

Energy storage within the distribution business to improve energy efficiency

Providing Wi-Fi over the utility network as a service to end customers – while the

network is energised i.e. if the power is interrupted the Wi-Fi service is also interrupted

Metering standards and functionality to facilitate nett-metering and/or nett-billing

Develop a model to define the minimum utility back-office support requirements

Development of an integrated smart grid plan aimed at energy efficiency improvement

through appropriate technology deployment

6.3 Landscape of institutions engaged in smart grid research

Internationally, substantial investments are made in respect of smart grid related research. As

stated earlier the smart grid was identified as a key enabler to enhance the ability of utilities to

respond to among others the drive towards a more energy efficient environment and improved

customer service. The United States Department of Energy (DOE), the United States

Department of Energy's National Renewable Energy Laboratory (NREL), the International

Smart Grid Action Network (ISGAN), the National Institute for Standards and Technology

(NIST), the European Commission, the Union of the Electricity Industry–EURELECTRIC and

the Electricity Power Research Institute (EPRI) are among the leading international institutions

devoting resources towards smart grid related research.

From a South African perspective, SANEDI, and Eskom are the leaders in respect of investing

resources in smart grid related research and associated efficiency improvement. Both

organisations have agreements in place with the majority of the universities and universities of

technology in South Africa. Through an industry partnership the smart grid related research is

directed and mainly funded through SANEDI or Eskom. There are also cases where the

Department of Science and Technology (DST) are directing energy efficiency research.

The only body in South Africa which is structured to engage with the ESI from an integrated

smart grid perspective is SASGI. SASGI was established through SANEDI with the primary

objective to provide guidance in respect of the transition to a smarter grid. The SASGI


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26

Membership is made up of utility representatives and various government bodies with a direct

interest in the efficient and effective operation of the ESI as well as smart grid deployment.

The current smart grid approach is informed by the SANEDI, Smart(er) Grid Multi-Year

Programme Plan 2014-2018 and the focus is predominantly on the distribution sector of the

ESI. While the importance of climate change and energy efficiency is recognised in the plan,

the plan is not driven from a national energy efficiency improvement perspective. Due to

funding related challenges SANEDI is dependent on grant funding to complement their budget

allocation. The funding constraints resulted in SANEDI adopting an “applied research”

approach. In essence the focus from a smart grid perspective is on research through the practical

execution of defined projects. While this approach is yielding results, there is an urgent need

to invest in advanced research since this will pave the way to be more proactive in deploying

appropriate technology which will best serve the South African requirements. Under the

guidance of the Department of Energy (DOE), SANEDI identified the piloting of various Smart

Grid applications such as: (a) Distributed Power Generation (DG) (b) Revenue Enhancement

(c) Energy Efficiency and Demand Side Management (EEDSM) (d) Advanced Asset

Management (AAM) and (e) Active Network Management (ANM) will help to demonstrate

the benefits of a smarter grid. Furthermore, the European Union (EU) grant funding secured

through SANEDI was earmarked in conjunction with DoE for this purpose. The donors made

the funding available for technology deployment within the electricity utility businesses.

Municipalities were invited to put forward specific technology deployment projects and to

apply for funding support.

While the research being conducted in respect of improving energy efficiency technology

development must be recognised, it is important to note that it is not informed by any defined

national strategic plan. Therefore, it is reasonable to expect that the current research is driven

by specific needs or areas of interest. Potentially the most obvious driver of the smart grid

related research and development must be the Integrated Energy Plan (IEP). It is advisable to

establish an integrated smart grid energy efficiency technology development plan.


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27

7. Conclusion

The need for South Africa to be more efficient in the use of energy resources is accepted in

principle. The challenge however is to produce tangible results which will render a better

environment and lead to improved sustainability of the ESI. Based on international best

practices, the absence of large scale deployment of appropriate technology which could be

leveraged to improve an integrated business approach becomes a major constraint. This also

impacts on the efficient use of energy. Furthermore, in the context of a monopoly business such

as the ESI, effective regulation is required to instil the required high performance and

compliance culture.

Internationally a combination of incentives (e.g. funding), penalties and enabling technologies

are used to achieve energy efficiency objectives. The technologies developed and deployed are

underpinned by sound research and in many cases by results obtained through technology

deployment under laboratory conditions. The international success is further enhanced through

the exchange of information and the participation in organisations such as ISGAN, NIST and

EPRI. In addition to the technology enablement it is essential that the market arrangement be

such that it promotes transparency and facilitates a high performance business culture. The

absence of a defined market arrangement/rules and the unwillingness to address it in South

Africa, is not doing the country or the end customers any favours.

Furthermore, from an energy efficiency deliverable perspective, baselines are established and

targets set against defined objectives/expected outcomes.

The operating environment of the electricity utility business changed substantially over the past

decade. It is clear that the traditional business of “buying and selling” energy is under threat.

This implies that new revenue streams must be identified, the business be aligned to

accommodate the disruptive technologies and that more efficient and sustainable practices be

explored. The effective deployment of appropriate technology can significantly contribute to

the improvement in business sustainability. In respect of achieving energy efficiency

objectives, the following are some of the areas where technology deployment was leveraged to

provide early results:

Advanced energy balancing and introduction of real-time statistical metering

Improved management of energy delivered at grid connection points

Deployment of smart meters as part of revenue management improvement

Reduction in network down time

Improved back-office functionality

Improved grid/network visibility

Integrated asset management

See Section 6 (page 12) of this report for examples of how the above options can contribute to

efficiency improvements.


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28

A study tour during 2014 to the United States, in which the author participated, to evaluate

smart grid benefits revealed that through the effective deployment of Smart Grids, outages can

be reduced by 20% while outage durations can be reduced by 30% within the first 18 months

of operation. Furthermore, examples were provided where peak loads relative to the loading

on the distribution networks were reduced by 15% and consumers saved up to 20% on their

electricity bill. The centralised Volt-Var control which in effect reduce energy waste by

adjusting voltage and reactive power on distribution lines in response to demand from

customers, presents a favourable option to network management and examples of voltage

lowering of up to 3% was demonstrated. Field force automation results suggest that

productivity improvements of up to 10% for office workers and as high as 18% for field

workers can be achieved with 8 months’ improvement in inspection time.

While there are countries with substantial Smart Grid experience and numerous reports

reflecting the potential benefits to be derived from smart Grid deployment, it must be

appreciated that this is a relatively new concept. Therefore, it is to be appreciated that detailed

results in respect of the assessment of results from completed project and benefits realised are

still in short supply. All indicators suggest however that the Smart Grid presents the potential

to render a more effective industry, a more efficient energy utilisation and a significant

contribution to the protecting of the environment.


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29

8. Contact Information

This study was conducted by Dr Willem J de Beer, an independent consultant in the South

African energy sector. Dr De Beer is actively involved in the electricity supply industry for

over 40 years from a strategic as well as an operational perspective. He is accredited through

Carnegie Mellon University, Washington, as a Smart Grid Navigator. He is therefore qualified

to assess the smart grid maturity of an utility and to facilitate utility readiness and ultimately

the rollout of a smart grid. He can be contacted on email at: [email protected] or on +27

82 338 0854.


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30

ANNEXURE A: Documents Reviewed

ABB. Asset management. The next generation maintenance strategies

Africa Utilities Technology Council (2016). Telecoms & ICT – The Essential Ingredients to

Create Energy Networks of the Future in Africa

Asia-Pacific Economic Cooperation (2011). Using Smart Grids to Enhance Use of Energy-

Efficiency and Renewable-Energy Technologies. Pacific Northwest National Laboratory 902

Battelle Boulevard Richland, WA 99352 USA

Carnegie Mellon. (2016). Smart Grid Maturity Model. Retrieved December 01, 2016, from

http://www.sei.cmu.edu/smartgrid/tools/

Deloitte (2011). Advanced metering infrastructure cost benefit analysis

Department of Minerals and Energy, “The white paper on energy policy – South Africa

(1998)”, Pretoria, 1998

Electricity for Europe, Active Distribution System Management. A key tool for the smooth

integration of distributed generation. A EURELECTRIC paper, FEBRUARY 2013

Energy Central (2009). Straight Talk About Smart Grid Funding, Planning and Results

Rosario Miceli (2013). Energy Management and Smart Grids. energies

EPRI (2011). Estimating the Costs and Benefits of the Smart Grid. A Preliminary Estimate of

the Investment Requirements and the Resultant Benefits of a Fully Functioning Smart Grid

EURELECTRIC views on Demand-Side Participation. EURELECTRIC, 2011

European Commission (2013). Incorporating demand side flexibility, in particular demand

response, in electricity markets

European Commission (2014). Benchmarking smart metering deployment in the EU-27 with

a focus on electricity

European Technology Platform. (2016). European Technology Platform - Smart Grids. Smart

Grids EU. Retrieved November 28, 2016, from http://www.smartgrids.eu

GreenCape, & Atkins, P. S. (2014). Smart Meters Survey - Localisation and roll-out barriers

Institute of Communication & Computer Systems of the National Technical University of

Athens ICCS-NTUA (2015). Study on cost benefit analysis of Smart Metering Systems in

EU Member States. FINAL REPORT

International Telecommunication Union (2012). Boosting energy efficiency through Smart

Grids.


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31

NIST (2013). Technology, measurements and standards challenges for the smart grid.

Oracle (2009). Smart Grids: Strategic Planning and Development

SANEDI, Smart(er) Grid Multi-Year Programme Plan 2014-2018

Scottish Smart Grid Sector Strategy Enabling the Low-Carbon Economy, Creating Wealth

Smart Grid Consumer Collaborative (2012). Consumer pulse and segmentation

The Smartness Barometer – How to quantify smart grid projects and interpret results.

EURELECTRIC, February 2012


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32

ANNEXURE B: Individuals Interviewed

Dr Minnesh Bipath, Acting Chief Information Officer, SANEDI, South Africa

Dr Johan Rens, North West University

Mr Nick Singh, Technology Manager, Eskom, South Africa

Mr Philip Groenewald, Manager, Eskom South Africa

Mr Teslim Yusuf, Project Manager, SANEDI, South Africa

Mr Mvuleni Bukula, Executive Manager: Energy, Nelson Mandela Bay Municipality