Mind Map: Power-Gen Africa #PGAfrica 2015 Conference David Lipschitz 15th July 2015 Day 1
1
PowerGen 2015 David Lipschitz 15 to 17 July 2015 Start here. E&OE. People Septimus van den Linden Gas Engines, USA Chris Yelland Close the Al smelters No VAT Little PAYE No local profits No downstream activity! 10% of SA's power Out of date contracts SAIEE Chris Crone Malcolm Folkes Mr Cary Eskom Riaan Smit Jonathan Nye Erongo RED Amy Nash Research McKinsey US$ 490 bil for generation US$ 360 for transmission & distribution Plenary Keynote Mr Jacob Mbile, DOE New IEP IRP 2010 Expediting Private Coal & cogen & gas Procurement program, which responsive to local demand & supply changes Grand Inca agreement ratified Commercial negotiations now 13 GW to SA A treaty Skills, jobs (in construction) Energy Statistics, detailed at User Retrofitting public buildings Shifting demand from electricity to gas NEES National Energy Efficiency Strategy Reducing waste & reducing energy intensity 62c and 79c for wind & PV (grid tie) Biggest Problems Limited transmission grid capacity Low local community income generation Nigel Blakeby Mr Brian Molefe Mr Sicelo Xulu MD of City Power Energy A sector in transformation We need to survive it Investment We need a bigger energy mix Prosumers Empowered customers How do utilities interact with their customers in this environment? Digitisation Eg Smart Grid Big Data Analytics For Business Customer Service Reduce outages Performance Planning Searching for the Relevant data A new driver & pressure in our business New competitors Eg IPPs They must be embraced, not seen as destructive forces Aging workforce Requires up-skilling in younger people Key trends 2.1% economic growth worldwide 4.2% world wide Investment US$1.8 trillion In Africa to achieve 4% growth US$23.3 trillion world wide by 2040 Smart metering 9.4% growth CAGR Energy mix is changing 41% coal reduced to 21% by 2040 RE 21% to 33% But fossil fuels still the lions share for decades Engineering News Main topics Plenary Panel The challenges facing the Electricity Supply Industry in Africa Nelisiwe Mugubane Institutional memory Grid constraints How to plan so that our power supply is what we need Interaction between countries Eg Distribution Network How to bring centralized power to the consumer? But Utilities must embrace distributed generation Corridors where to transport this energy "Give the risk to the people best able to manage it". Ie IPPs! [what about solar leasing?] We must make sure that intergovernmental agreements are (sustained) maintained Monitoring & evaluation Dr Willem de Beer SANEDI Taylor Ruggles Department of State, USA Obama's Power Africa program Local finance & infrastructure is a challenge when trying to bring electricity to 600 mil Africans How to reduce project risk Takes a transaction based approach Project by project Finance Policy Enabling environment for private investment Cost reflective tariffs Having a relevant off taker Strong legal & regulatory frameworks Interconnections To neighbors so that you can trade electricity Arnaud de Limburger EPC Operates IPPs Develop, Build, Operate: to reduce risk An investor's perspective Governance Relinquishing sovereignty Because of huge financial backing from outside countries [Eg in Greece today] Reynolds Beks Dagogo-Jack Hydro power Especially small hydro in Africa Tax incentives not available in micro-hydro Especially because of capital intensive nature of the projects For stabilizing the grid if connected to the main transmission lines Time to get permits Not co-ordinated single point of contact in many governments Lack of skills Political will Stable regulations For a conducive, enabling, predictable, environment Soft infrastructure Are the conditions precedent in place to make sure power can be wheeled across the grids and across borders? Agreements Technical Regulatory For power to flow Wheeling charges Power Pool agreements To regulate the trade of electricity Efficient markets Rwanda Jacob Mblele The biggest challenge is the focus on mega-projects Big distances! DOE The solution is in micro-grids & distributed generation IPPs: What about rooftop? Aggregated demand with an integrated & co-ordinated need across Africa Are IPPs the fastest way of getting energy onto the grid? Can we have low cost & reliable energy in Africa? Nelly: it must be high cost to get it to be reliable Taylor: we must put up prices first Jacob: it doesn't need to be expensive! How do we get regional networks working? And what about an Africa wide grid? Questions Localisation Especially know how Me Building vs maintaining the machine & what is the machine for? 8,000 jobs vs 1 mil jobs Key Challenges & Opportunities City Power Mr Sicelo Xulu A local list Theft Load shedding Economic downturn & increasing elec costs Skills & service delivery Illegal connections Infrastructure & development affordability NEM, etc Whilst we are trying to build a new innovative system, there are a whole bunch of disruptive technologies Utilities must turn disruptive technologies into opportunities A global list Electricity growth 2/3 by 2040 DR & home energy mgt EG and Embedded Storage Big Data Improve investor relations & investor confidence Gas Engine Gas Turbine Technologies panel discussion PowerPhase Makes turbine 20% more efficient Brian Foley Can run a 2 MW standby or black start Loses power at higher temperature and humidity Alstom Matt Hiddemann Energy market needs Siemens & GE Siemens Frank Richter GE Robert Colwell Chaired by Septimus van der Linden Startup times Hot After running overnight Warm After weekend Cold After 2 week maintenance Fast Ramp rate Required for renewables But maybe emissions problems Ramp rate Jargon Wobble Index What is your turn down whilst meeting emissions? 35% to 45% Siemens can operate at 5%, but then not emissions compliant Gasify methanol for example As an input to a gas engine Strategy Energy Planning Transitioning the Power System Panel Discussion Regional power market Preconditions National control is required Customer will have a choice of supplier There will be a retailer in the market of the future Missing capacity SA 33 out of 42 GW, but what about 48 SAPP built 14 GW in the past 10 years, but wants to build 24 GW in the next 10 years Need to create various markets Financial NEM & DR & TOU & Storage costs Especially for EG Wheeling Power pools in Africa SAPP COMELEC Etc Speakers Eng Musara Beta SAPP Chief Market Analyst Matthew Ultimo Rodin Consulting Mthunzi Luthuli Chairman of panel discussion We should use our coal Professor Philip Lloyd Rodin Consulting Looking at the Urban Scale 100 to 500 units Prosumers Much greater awareness of EE and production requirements Population growth of 2.5%; Urbanisation at 4% Australia 1 million houses achieved in 5 years; 10% penetration Cost of capital If we had COC like Germany, capex costs would halve Examples Hudson Yards 70% of base load supply Freiburg Higashimata Japan Garden City, Nairobi Tsumkwe Menlyn Maine; Black River Park: SA Accra 26 hectares Why isn't it happening? Ownership Matthew Ulterino "Real estate is central to the energy transition" New technology - development [Grubb Curve] Eg battery vs diesel Low / high capex vs High / low ops cost Requires a financial innovation in the selling / financing model Cell phone sales analogy It's like a PPA Every time PV production doubles, PV prices come down 22% Technology disruption Battery R6 per kWh now House R2.14 Generator R5 House PV R1.50 A system with multiple opportunities to create value How will SA grow its electricity supply Philip Lloyd "The future will look like today" Energy intensity It's dropping, but it's an illusion Shortage 20 tWh per year We need 5 tWh more per year to meet our growth targets Renewables Big costs Eg intermittency Spinning reserve costs "South Africa's future is nuclear" Gas is nice, but not available in SA (yet) Mozambique has lots Currently 1% of our electricity is from gas 80 tWh from nuclear for R500 bil vs 8 tWh from RE for R200 bil Check the numbers Coal 1/3rd of our export earnings is from coal Means paradox in our policy SA wants to reduce coal production The Californian Duck Curve in RE systems
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Transcript of Mind Map: Power-Gen Africa #PGAfrica 2015 Conference David Lipschitz 15th July 2015 Day 1
PowerGen 2015David Lipschitz
15 to 17 July 2015Start here. E&OE.
People
Septimus vanden Linden
Gas Engines, USA
Chris Yelland
Close the Al smelters
No VAT
Little PAYE
No local profits
Nodownstream
activity!
10% of SA's power
Out of date contracts
SAIEE
Chris Crone
Malcolm Folkes
Mr Cary
Eskom
Riaan SmitJonathan Nye
Erongo RED
Amy Nash
Research
McKinsey
US$ 490 bil for generationUS$ 360 for
transmission &distribution
Plenary Keynote
Mr Jacob Mbile, DOE
New IEP
IRP 2010
Expediting
Private Coal &cogen & gas
Procurement program, whichresponsive to local demand &
supply changesGrand Incaagreement
ratified
Commercialnegotiations now
13 GW to SA
A treaty
Skills, jobs (inconstruction)
Energy Statistics,detailed at User
Retrofittingpublic buildings
Shifting demand fromelectricity to gas
NEESNational Energy
Efficiency Strategy
Reducing waste &reducing energy intensity
62c and 79c for wind& PV (grid tie)
Biggest Problems
Limitedtransmission grid
capacity
Low local communityincome generation
Nigel Blakeby
Mr Brian Molefe
Mr Sicelo Xulu
MD of City Power Energy
A sector intransformation
We need to survive it
Investment
We need a biggerenergy mix
Prosumers
Empowered customers
How do utilities interact with theircustomers in this environment?
Digitisation
Eg Smart Grid
Big Data
Analytics
For
Business
Customer Service
Reduce outagesPerformance
PlanningSearching for the
Relevant dataA new driver &pressure in our
business
New competitors Eg IPPs
They must be embraced, notseen as destructive forces
Aging workforceRequires up-skilling in
younger people
Key trends
2.1% economicgrowth worldwide
4.2% world wideInvestment
US$1.8 trillion
In Africa toachieve 4%
growth
US$23.3 trillion world wide by 2040
Smart metering 9.4%growth CAGR
Energy mix ischanging
41% coal reducedto 21% by 2040
RE 21% to 33%
But fossil fuels still thelions share for decades
Engineering News
Main topics
Plenary PanelThe challenges facing the Electricity
Supply Industry in Africa
Nelisiwe Mugubane
Institutional memory
Grid constraints
How to plan so that our powersupply is what we need Interaction
betweencountries
EgDistribution
Network
How to bring centralizedpower to the consumer?
But Utilities must embracedistributed generation
Corridors where totransport this energy
"Give the risk to the people bestable to manage it". Ie IPPs!
[what aboutsolar leasing?]
We must make sure thatintergovernmental agreements
are (sustained) maintained
Monitoring &evaluation
Dr Willem de Beer
SANEDI
Taylor Ruggles
Department of State, USA
Obama's PowerAfrica program
Local finance & infrastructure is achallenge when trying to bringelectricity to 600 mil Africans
How to reduceproject risk
Takes a transactionbased approach
Project by project
Finance
Policy
Enabling environment forprivate investment
Cost reflective tariffs
Having arelevant off
taker
Strong legal ®ulatory
frameworksInterconnections
To neighbors so that youcan trade electricity
Arnaud de Limburger
EPC
Operates IPPsDevelop, Build,
Operate: to reduce risk
An investor'sperspective
Governance
Relinquishingsovereignty
Because of huge financial backingfrom outside countries
[Eg in Greece today]
Reynolds BeksDagogo-Jack
Hydro power Especially smallhydro in Africa
Tax incentives notavailable in micro-hydro
Especially because of capitalintensive nature of the projects
For stabilizing the grid if connected tothe main transmission lines
Time to get permits
Not co-ordinated single point ofcontact in many governments
Lack of skills
Political willStable regulations
For a conducive, enabling,predictable, environment
Soft infrastructureAre the conditions precedent in place to
make sure power can be wheeled across thegrids and across borders?
Agreements
Technical
Regulatory
For power to flow
Wheeling charges
Power Poolagreements
To regulate thetrade of electricity
Efficient markets
Rwanda
Jacob Mblele
The biggest challenge is thefocus on mega-projects
Big distances!
DOE
The solution is in micro-grids &distributed generation
IPPs:
What about rooftop?
Aggregated demand with anintegrated & co-ordinated
need across Africa
Are IPPs the fastest way ofgetting energy onto the grid?
Can we have low cost &reliable energy in Africa?
Nelly: it must be high costto get it to be reliable
Taylor: we must putup prices first
Jacob: it doesn't needto be expensive!
How do we get regionalnetworks working? And what
about an Africa wide grid?
Questions
LocalisationEspecially know how
Me
Building vs maintaining themachine & what is the machine
for? 8,000 jobs vs 1 mil jobs
Key Challenges & OpportunitiesCity Power
Mr Sicelo Xulu
A local list
Theft
Load shedding
Economic downturn &increasing elec costs
Skills &servicedelivery
Illegal connections
Infrastructure &developmentaffordabilityNEM, etc
Whilst we are trying to build a newinnovative system, there are a whole
bunch of disruptive technologies
Utilities must turn disruptivetechnologies into opportunities
A global list
Electricitygrowth 2/3 by
2040DR & home energy mgt
EG andEmbedded
Storage
Big Data
Improve investor relations &investor confidence
Gas EngineGas Turbine Technologies
panel discussion
PowerPhase
Makes turbine 20%more efficient
Brian Foley
Can run a 2 MWstandby or black start
Loses power at highertemperature and humidity
Alstom
Matt Hiddemann
Energy market needs
Siemens & GESiemens Frank Richter
GE
Robert Colwell
Chaired by Septimus van der Linden
Startup times
Hot
After running overnight
Warm
After weekend
ColdAfter 2 weekmaintenance
Fast
Ramp rate
Required forrenewables
But maybeemissionsproblems
Ramp rate
Jargon
Wobble Index
What is your turn down whilstmeeting emissions?
35% to 45%
Siemens can operate at 5%, but thennot emissions compliant
Gasify methanolfor example
As an input to agas engine
StrategyEnergy Planning
Transitioning the Power SystemPanel Discussion
Regional power market PreconditionsNational control
is required
Customer will have achoice of supplier
There will be a retailer in themarket of the future
Missing capacity
SA 33 out of 42 GW,but what about 48
SAPP built 14 GW in the past 10years, but wants to build 24 GW
in the next 10 years
Need to createvarious markets
Financial
NEM & DR & TOU &Storage costs
Especially for EG
Wheeling
Power pools in Africa
SAPP
COMELEC
Etc
SpeakersEng Musara Beta SAPP Chief Market Analyst
Matthew Ultimo
Rodin Consulting
Mthunzi Luthuli
Chairman of panel discussion
We shoulduse our coal
Professor Philip Lloyd
Rodin Consulting
Looking at theUrban Scale
100 to 500 units
Prosumers
Much greater awareness of EE andproduction requirements
Population growth of 2.5%;Urbanisation at 4%
Australia
1 million houses achieved in 5years; 10% penetration
Cost of capital
If we had COC like Germany,capex costs would halve
Examples
Hudson Yards70% of baseload supply
Freiburg
Higashimata Japan
Garden City, Nairobi
TsumkweMenlyn Maine; BlackRiver Park: SA
Accra
26 hectares
Why isn't ithappening?Ownership
Matthew Ulterino
"Real estate is central tothe energy transition"
New technology -development
[Grubb Curve]Eg battery vs diesel
Low / high capex vsHigh / low ops cost
Requires a financial innovation in theselling / financing model
Cell phonesales analogy It's like a PPAEvery time PV production doubles,
PV prices come down 22%
Technology disruption Battery R6per kWh now
House R2.14 Generator R5 House PV R1.50
A system with multipleopportunities to create value
How will SA grow its electricity supplyPhilip Lloyd
"The future willlook like today"
Energy intensity
It's dropping, butit's an illusion
Shortage
20 tWh per yearWe need 5 tWh
more per year to meet our growth targets
Renewables
Big costs
Eg intermittency
Spinning reserve costs
"South Africa'sfuture is nuclear"
Gas is nice, but notavailable in SA (yet)
Mozambique has lots
Currently 1% of ourelectricity is from gas
80 tWh from nuclear for R500 bil vs 8tWh from RE for R200 bil
Check the numbers
Coal1/3rd of our exportearnings is from coal
Means paradoxin our policy
SA wants to reducecoal production
The Californian DuckCurve in RE systems
