SPRI. NERSA, The National Energy Regulator South Africa
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Transcript of SPRI. NERSA, The National Energy Regulator South Africa
NERSA MANDATE
WHITE PAPER ON RENEWABLE ENERGY POLICY
RENEWABLE ENERGY POLICY IMPLEMENTATION
RENEWABLE ENERGY FEED- IN TARRIFS (REFITs)
NEW GENERATION CAPACITY REGULATIONS
INTEGRATED RESOURCE PLAN 2010-2030
MINISTERIAL DETERMINATION
POLICY ADJUSTED IRP 2010-2030
NET NEW CAPACITY (2030)
DoE RENEWABLE ENERGY IPP PROCUREMENT
CURRENT CAPACITY ALLOCATIONS
TARIFF COMPARISONS
OPERATIONAL INSTALLED CAPACITY UNDER RE IPPP
CONCLUDING REMARKS
PRESENTATION OUTLINE
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NERSA MANDATE (1)
NERSA’s mandate is anchored in:
4 Primary Acts:
National Energy Regulator Act, 2004 (Act No. 40 of 2004)
Electricity Regulation Act, 2006 (Act No. 4 of 2006)
Gas Act, 2001 (Act No. 48 of 2001)
Petroleum Pipelines Act, 2003 (Act No. 60 of 2003)
3 Levies Acts:
Gas Regulator Levies Act, 2002 (Act No. 75 of 2002)
Petroleum Pipelines Levies Act, 2004 (Act No. 28 of 2004)
Section 5B of the Electricity Act, 1987 (Act No. 41 of 1987)
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Electricity Regulation Act No.4 of 2006:
Objectives of this Act include the following:
i. To Achieve the efficient, effective, sustainable and orderly development
and operation of electricity supply infrastructure in South Africa,
ii. To Promote the use of diverse energy sources and energy efficiency,
iii. To Promote competitiveness, customer and end-user choice
iv. To facilitate a fair balance between the interests of customers and end
users, licensees, investors in the electricity supply industry and the public
NERSA MANDATE (2)
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White Paper on Renewable Energy Policy of the Republic of South Africa
of November 2003:
A target of 10,000 GWh renewable energy contribution to final energy
consumption by 2013, to be produced mainly from biomass, wind, solar
and small-scale hydro.
This policy document is being reviewed to assess progress after the
first 5yrs of policy implementation and also propose medium to long
terms RE targets.
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NERSA RESPONSE:
Prepared Renewable Energy Feed-In-Tariffs (REFITs)
Held Public hearings and stakeholder workshops on REFITs
Prepared the PPA for Renewable Energy Purchases under REFITs
Assisted in the preparation of the DoE RE IPP commercial agreements
Made allowance in the Eskom’s Multi Year Price Determination (MYPD) in terms
of revenue for IPP purchases
Approved the Grid Code for Wind Generation
Approved the Transmission and Distribution Use of System framework
Granted licences to the DoE RE IPP programme successful Bidders
NERSA introduced a REFIT framework in two phases.
A REFIT is a pre-approved tariff for a specific Renewable Energy
generation technology e.g. wind
By nature REFITs include a premium above tariffs for conventional
generation to attract investors and developers
REFIT was only for those selling to the “Buyer” so that the price is diluted
to end user
REFITs did not apply to bilateral agreements.
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Phase I tariffs approved in March 2009:
Technology Tariff (R/kWh)
CSP trough (6hrs storage) 2.10
Wind 1.25
Small Hydro 0.94
Landfill gas 0.90
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Technology Tariff (R/kWh
CSP trough (no storage) 3.14
CSP tower (6 hrs storage) 2.31
Biomass Solid 1.18
Biogas 0.96
Landfill gas 0.90
Large scale grid-connected PV (≥ 1MW) 3.94
Phase II tariffs approved in October 2009:
New Generation Capacity Regulations were gazetted on 5 August 2009
for procurement of generation capacity and the role of the Government
institutions
Regulations were later reviewed and gazetted on 4 May 2011.
In revised regulations, DoE is responsible for planning and procurement
of new generation capacity. Public Finance Management Act requires
procurement to be done through a competitive bidding process.
Competitive Bidding chosen over REFITs, however, NERSA’s
experience with REFIT was carried across into the process i.e. PPA
term, Eskom as Buyer, RE technologies.
DoE/National Treasury assisted by NERSA were responsible for
developing technology specific PPAs and Procurement Documents.
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In terms of 2011 New Generation Capacity Regulations , The Minister may,
in consultation with the Regulator determine that new generation capacity is
needed to ensure the continued uninterrupted supply of electricity and
determine the types of energy sources from which electricity must be
generated, and the percentages of electricity that must be generated from
such sources.
The Integrated Resource Plan (IRP) 2010-30 was promulgated
in March 2011
IRP is “living plan” which should be revised by the Department
of Energy (DoE) every two years but is only in the process of
being updated this year
DOE initiated first iteration of IRP in January 2010
IRP included scenarios, policy options and technology choices
Publication participation conducted in June 2010
Public consultation and subsequent independent international
consultant input resulted in changes to the IRP modelling as
well as new scenarios to test additional policy options process
led to refinements, and to the approved Policy-Adjusted IRP
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The procurement document released on 3rd August 2011 provided for
procurement of 3 725MW in five different bidding phases
100MW of the 3 725MW were reserved for small-scale Renewable
Energy programme i.e. capacity range of 1– 5 MW.
A hybrid procurement method (i.e. price competition within a prescribed
ceiling price) was adopted by the DoE.
Phase 1: On 7 December 2011, 28 preferred bidders were selected
from a total of 53 bids. Energy Regulator approved 28 generation
licenses on 26 April 2012
Phase 2: On 21 May 2012, 19 preferred bidders were selected from a
total of 79 bids. Energy Regulator approved 19 generation licenses
in September 2012.
Phase 3: On 04 November 2013, 17 preferred bidders selected from
total of 93 bids. Energy Regulator approved 17 generation licences in
March 2014. 17
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To ensure integrity of the adjudication process international reviewers
were used and strict process rules applied
Government decided to get maximum leverage out of the process
and imposed social and developmental requirements on the bidders
These requirements included:
Local Content
Broad Based Black Economic Empowerment (BBBEE)
Price
70 %
30 %
Economic Development
Job creation
Socio Economic
Local content
Project cost
Rand/MW
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Technology
Ministerial
Determination
MW
First Bid
Allocation
MW
Second Bid
Allocation
MW
Third Bid Allocation
MW
Onshore wind 1 850 634 562.5 435
Solar photovoltaic 1 450 631.5 417.1 787
Concentrated solar
power200 150 50 200
Small hydro (≤ 10MW) 75 0 14.3 0
Landfill gas 25 0 0 18
Biomass 12.5 0 0 16
Biogas 12.5 0 0 12
Total 3 625 1 415.5 1 043.9 1 456
Source: Department of Energy
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Source: Department of Energy 22
2,37
1,56
1,26
0,77
BW1 BW2 BW3 BW4
Portfolio Price Trend R/kWh
Prices stated in April 2015
terms. Energy weighted
average (R/kWh) considering
average technology RFP
submission price (published)
per BW and projected,
annual energy contribution
per technology type.
Operational Installed Capacity under RE IPP Programme
as at 31 December 2015
7 191
639
1045
1522
1709
1860
2021 2021
Q3 FY13/14 Q4 FY13/14 Q1 FY14/15 Q2 FY14/15 Q3 FY14/15 Q4 FY14/15 Q1 FY15/16 Q2 FY15/16 Q3 FY15/16
RENEWABLE GENERATION:MW OPERATIONAL
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REIPPs have
consistently
contributed new
capacity to the
network since the end
of 2013. At December
2015, 83% of IPPs
scheduled to be
operational have
started commercial
operations. The
average lead time for
these 40 projects to
complete has been 1.7
years.
Over 2021 MW of Renewable Energy is connected to the grid as of December
2015
Renewable Energy development requires sound policy and regulatory
framework
Government institutions and industry stakeholders need to cooperate in order to
implement renewable energy policy successfully
The competitive bidding process resulted in efficient prices
Limiting new capacity has led to a manageable process
It is expected that renewable energy will improve the socio-economic
development of South Africa while contributing to of emission reduction.
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Thank You
Tel: 012 401 4600
Fax: 012 401 4700
Website: www.nersa.org.za
Physical Address:
Kulawula House
526 Madiba Street
Arcadia,0083
Pretoria
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