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Flexible LNG Power in South Africa

Authors:Wayne GlossopJyrki Leino

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3 BIG QUESTIONS

• What does the SA system require from gas plants in the future?

• Which technology is best suited to meet these needs?

• What about the impact of LNG GSA’s?

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To date, there is no clear answer on what the “real” role of gas power will be in the South African Power System:

• Ministerial Determination (December 2012):

• “that baseload and/or mid-merit energy generation capacity is needed to contribute towards energy security, including 2652MW to be generated from Natural Gas.”

• Gas Power RFI (May 2015):

• “intra-day flexibility is required with lower load factors during night and higher load factors during the day and evening peak hours”.

• 35% Load Factor >500MW

• 50% Load Factor <500MW

• 600MW EoI (May 2016):

• “The Power Generation Facility is anticipated to be operated in either baseload or mid-merit mode of operation utilising appropriate power generation technologies.”

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THE UNDEFINED ROLE OF GAS IN SOUTH AFRICA

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CC

-GT

CC

-IC

E

LN

G G

SA

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BEST TECHNOLOGY AND IMPACT OF LNG SUPPLY?

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Using specialised Power System Optimisation software, we studied the SA power system between 2020-2030 based on the IRP using 3GW gas.

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HOW DID WE STUDY THE SYSTEM?

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100

200

300

400

500

-

100

200

300

400

500

600

700

Win

d C

ap

acit

y [

MW

]

So

lar

PV

Cap

acit

y [

MW

]

1 Month Aggregated REIPPP Dispatch

Solar PV Wind

New build options

Coal Nuclear

Import

hyrdo

Gas -

CCGT

Peak -

OCGT Wind CSP Solar PV

MW MW MW MW MW MW MW MW

2010 0 0 0 0 0 0 0 0

2011 0 0 0 0 0 0 0 0

2012 0 0 0 0 0 0 0 300

2013 0 0 0 0 0 0 0 300

2014 500 0 0 0 0 400 0 300

2015 500 0 0 0 0 400 0 300

2016 0 0 0 0 0 400 100 300

2017 0 0 0 0 0 400 100 300

2018 0 0 0 0 0 400 100 300

2019 250 0 0 237 0 400 100 300

2020 250 0 0 237 0 400 100 300

2021 250 0 0 237 0 400 100 300

2022 250 0 1143 0 805 400 100 300

2023 250 1600 1183 0 805 400 100 300

2024 250 1600 283 0 0 800 100 300

2025 250 1600 0 0 805 1600 100 1000

2026 1000 1600 0 0 0 400 0 500

2027 250 0 0 0 0 1600 0 500

2028 1000 1600 0 474 690 0 0 500

2029 250 1600 0 237 805 0 0 1000

2030 1000 0 0 948 0 0 0 1000

Total 6250 9600 2609 2370 3910 8400 1000 8400

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ENERGY DISPATCH FOR GAS BASED POWER

0

10

20

30

40

50

60

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Ca

pa

city f

acto

r [%

]

The role of Gas capacity constantly varies depending on the supply/demand status of the system. It never remains in a single profile.

Simulated weekly gas power

dispatch profile for 2020-2022

Simulated weekly gas power

dispatch profile for 2023 onwards

Note 1: Simulations carried out with Plexos and inputs obtained from the Integrated Resource Plan (Base Case 0.0) of South African Department of Energy

Note 2: Delivered gas price estimated at 12USD/GJ.

1 2 3 4 5 6 7

1 2 3 4 5 6 7

Po

we

r o

utp

ut

Days

Po

we

r o

utp

ut

Days

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The demand for, and generation of, electricity must be kept in constant balance in order to maintain the stability of the electricity system. Frequency is the measure of system stability

• Differences between forecast and actual real time can arise from 3 main reasons:1. Unplanned outages of power plants or/and transmission lines2. Electricity demand (load) deviating from the forecast3. Intermittent renewable generation output deviating from forecast

• Need for Reserves will increase as renewable penetration exceeds 10%* in 2019• SA Grid Code defines the following start up requirements for Regulating Reserves

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INTRODUCTION TO OPERATING RESERVES

1%3%

4%6%

8%9%

10%11%

13%14%15%

16%

20%21%

24%24%25%26%

20

13

20

14

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20

30

Renewable Energy Penetration as a % of the peak demand**

* According to the International Energy Agency, the power system will start to experience the effects of variability from renewables sources after 5% penetration levels are reached (reference: IEA 2014,

“The power of transformation”).

** As per Base Case IRP2010

10s

10min 1hr

Rese

rve

MW

’s

49.85Hz

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Technology Performance Differences allow for different grid functions to be met:

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TECHNOLOGY COMPARISONS

Conditions “Ultra-Flexible” Tech

[eg: CC-ICE]

“Conventional” Tech

[eg: CC-GT]

Output 600 MW 600 MW

Efficiency (Net, LHV) 100% load (25degC) 50% 55%

75% load (25degC) 50% 52%

50% load (25degC) 50% 48%

Start up Times Hot Standby 10min (90%) / 1:20min

(10%)

15-20min (50%) / 1:30min

(50%)

Start up Costs EUR/MW/start 5 60*

Note* As per NREL report “Power Plant Cycling Costs” April 2012

Ultra-Flex Conventional

Spinning Non-Spinning Spinning Non-Spinning

Regulating Reserves Yes Yes (90%) Partial No

Supplying Reg Reserves from non-spinning state means that

no Variable OPEX is incurred – i.e. it is the most cost

effective way to provide reserves to the system

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0

10

20

30

40

50

60

70

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Ca

pa

city fa

cto

r [%

]

Conventional Energy

Conventional Reserves

Ultra-Flex Energy

Ultra-Flex Reserves

Engines are the technology of choice to provide Regulating Reserves to the system:

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TECHNOLOGIES AND THEIR ROLES IN ENERGY AND RESERVES

Increasing role

as reserve

provider to the

system

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-350 000

-300 000

-250 000

-200 000

-150 000

-100 000

-50 000

0

50 000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

00

0’ U

SD

Conventional Energy

Conventional Reserves

Ultra-Flex Energy

CC-ICE Energy+Reserves

The ability to provide flexible energy and reserves generates significant annual savings:

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SYSTEM LEVEL IMPACT FROM TECHNOLOGY AND RESERVES

Source of System Savings from Flexibility

CoalOptimisation

DieselReduction

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What is “Coal Optimisation”?

IMPACT OF FLEXIBILITY

Coal Fleet Parameter No Gas Ultra-Flex Variation

Start p.u.p.a Pcs 8.067 7.798 -3%

Generation per start p.u MWh 360 741 372 444 3%

Duration of average pulse Hrs 724 747 3%

This may be

small but it is

against a huge

installation base

of +30GW

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TECHNOLOGY DISPATCH VISUALS

Lower bound Upper boundary DA generation RT generation

“Typical” week with gas technologies providing energy and reserves to the system:

Ultra-Flex Tech=

Energy + Reg

Reserves

Provider

Conventional

Tech = Energy

Provider

ULT

RA

-FLE

XIB

LE

CO

NV

EN

TIO

NA

L

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FLEXIBILITY AN LNG PERSPECTIVE

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FixedGSA

• 100% take-or-pay obligations

• 3Mtpa offtake requirement [~65% LF for 3GW]

• Good LNG import terminal infrastructure utilisation

10USD/GJ

VariableGSA

• 0% take-or-pay obligations

• No minimum offtake obligations

• Variable LNG import terminal infrastructure utilisation

15USD/GJ

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OPTIONS FOR LNG ‘GAS SUPPLY AGREEMENTS’

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A comparison of systems with no gas; fixed gas; and variable gas power projects

-1 800 000

-1 600 000

-1 400 000

-1 200 000

-1 000 000

-800 000

-600 000

-400 000

-200 000

0

200 000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

00

0’ U

SD

No Gas Fixed Gas [10USD/GJ] Variable Gas [15USD/GJ]

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PIÈCE DE RÉSISTANCE

Cheaper to have

no gas at all on

the system than

inflexible gas

Flexible gas

always creates

greater system

savings than

inflexible gas

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3 BIG ANSWERS

• What does the SA system require from gas plants in the future?

• The ability to switch between profiles depending on the system’s supply/demand situation

• Diesel Displacement and Coal Optimisation

• Which technology is best suited to meet these needs?

• Ultra-Flexible Gas Technologies are able to provide much needed system reserves in a cost effective manner thereby creating system savings

• What about the impact of LNG GSA’s?

• The value of providing system flexibility outweighs the benefits from optimising your gas supply chain

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Smart Power

Generation

THANK YOU

ENERGY EFFICIENCY

FUEL FLEXIBILITY

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