SAPVIA Market Assessment & Technology Cost & Value Comparison Studies

Transcription

1 Contents SAPVIA Market Assessment & Technology Cost & Value Comparison Studies Andrew Bowden & Vivienne Roberts Arup October 2013

2 Arup s PV experience in South Africa Due to our structure and past experience, Arup was well positioned to get involved with a number of projects right from the beginning of the REIPPPP Process. We are involved in eleven of the Round 1 Projects that have gone through financial close and already begun construction or are due to start soon. The Map on the right shows projects we have been involved in throughout Rounds 1 and 2 in varying roles including Owner s Technical Advisor, LTA, Resource Analyst, Socio-Economic Analyst. We also worked on 12 Round 3 projects and 21 SPIPPs projects. We have experience in pre-bid, financial close, construction monitoring and commissioning stages. 2

3 Frost & Sullivan approach Primary Qualitative Data: Stakeholder Interviews

4 Report Contents Report I: Market Analysis Report II: Cost and Value of PV in South Africa

5 Market analysis: SA electricity context IRP2010 electricity mix in 2030 Total 2030 (MW) Coal CCGT OCGT Import Hydro Wind CSP Solar PV Nuclear Total New Build 6,250 2,370 3,910 2,609 8,400 1,000 8,400 9,600 45,637

6 PV growth projections Current installed PV capacity (excluding REIPPPP round 1) Installed PV Base (to 2012) Off-grid Commercial/ Roof-top Utility-scale Total 12.89MW 9.16MW MW Projected annual PV installations

7 PV growth projections Cumulative PV growth projections

8 PV LCOE comparison & REIPPPP Pricing ZAR/kWh LCOE for various generation technologies REIPPPP Actual average Round 1&2 pricing, and anticipated Round 3&4 pricing Historical Projected Round 1 Round 2 Round 3 Round 4 REIPPPP Round 3 bidding tariffs rumoured to be as low as 86c/kWh.

9 ZAR c/kwh ZAR c/kwh PV LCOE vs blended tariffs PV LCOE compared against Eskom s MYPD3 and NERSA approved tariff projections ( ) 250 PV LCOE compared against Eskom s MYPD3 and municipal tariff projections ( ) PV LCOE Range NERSA Approved 8% tariff increase MYPD 13% increase (nominal c/kwh) MYPD 16% increase (nominal c/kwh) PV LCOE Range NERSA Approved 8% tariff increase Blended Municipal Residential >600kWh Blended Municipal Commercial kwh Blended Municipal Industrial kwh

10 Barriers and strategic focus areas Restraint/ Barrier Cost Bureaucratic regulatory process Net Metering / Municipal barriers Required Outcomes PV to reach Grid Parity with Municipal Tariffs PV to reach Grid Parity with Eskom s Wholesale Tariff Simple process to develop utility-scale PV projects under REIPPPP. Net metering framework Protect municipalities revenue stream while allowing endusers to use net metering. Regulatory framework enabling municipalities to purchase renewable energy from IPPs. Available skills and technical capacity in municipalities. Priorities Address Net Metering barriers Promote local content and job creation while maintaining fair pricing. Engagement with government to streamline procurement processes and documentation Draft and lobby net metering framework. Investigate funding models for municipalities to purchase renewable energy through PPA s. Lobby DoE/IRP Planning Team/Nersa to set a renewable energy target for municipalities and address legislative or regulatory constraints for municipalities (e.g. MFMA). Address skills and capacity shortages within municipalities.

11 Barriers and strategic focus areas Restraint/ Barrier Wheeling Charges Grid Connection Challenges Required Outcomes Standardized framework and procedure for wheeling power Current, high resolution information about transmission and distribution capacity available to PV projects Establish Solar Corridors or Solar Nodes Priorities Lobby DoE/Nersa/Eskom for greater clarity and transparency on wheeling charges Lobby Eskom to make capacity and connection voltage information available to any developer, at any stage of a project. PV industry to work together with the DoE and Eskom to investigate the option to create Solar Corridors and/or Solar Nodes

12 Summary of benefits of PV Benefit / Advantage Promotes diversity and security of supply Modular & Scalable Using existing structures to generate electricity High job creation Environmental benefits: low carbon emissions and no pollution Quick to build Negligible water consumption Simple to build/install No transmission line losses (for commercial/industrial segment) Can be used in conjunction with pumped storage/gas a baseload solution No fuel costs Decommissioning: no waste, simple and cheap, no pollution Local industry creation Can match the load profile with the generation profile for commercial/industrial segment

13 Cost (ZAR/kWh) Externality costs Kusile Medupi PV Round 1 PV Round 2 Cost (excluding externalities) Externalities - Low Scenario Externalities - High Scenario Low Scenario (Rm) Low Scenario (R/kWh) High Scenario (Rm) High Scenario (R/kWh) Health Climate Change 3, , Water 21, , Mining 6, , Total 31, ,

14 Externalities: CO 2 & water CO 2 emissions Water consumption in generation

15 Number of Jobs (Thousands) Jobs/MW Job creation potential Job creation and local content spend, REIPPPP (Round 1 & 2) vs. Medupi and nuclear Number of jobs/mw created through REIPPPP 20 PV Total other RE Coal (Medupi) Nuclear (IRP Alloc.) MW allocation 1,049 2,446 4,764 9,600 Total Project Cost (R millions) Local Content Value (R millions) Local Content (%) Construction Jobs Construction Job/MW Operations Jobs 33,985 73,454 91, ,000 11,988 22,784 52, , % - 58% 30% 14,943 20,218 8,000 70, N/A N/A PV Total Re Wind Coal (Medupi) Nuclear Breakdown of REIPPPP PV jobs by province REIPPPP Round 1 REIPPPP Round 2 Coal (Medupi) 2.6

16 Local Content % Local content and SED Local content % for REIPPPP Rounds 1 and 2 and Medupi, and projected PV local content % for Round 3 REIPPPP Round 1&2 socio economic development 70% 60% 50% Estimated Project Revenues (R millions) SED 1% (Rmillions) SED 1.5% (Rmillions) 40% 30% 20% PV - Round 1 PV - Round 2 55, , % 0% PV CSP Wind Coal (Medupi) Round 1 Round 2 Round 3 Coal (Medupi) Nuclear Nuclear Total 77, ,167.6

17 Conclusion Large potential for growth in South Africa There are barriers which are constraining growth, but through effective engagement with government, these can be addressed Net-metering /embedded generation barriers are to be addressed if a large uptake of commercial/rooftop systems is to be achieved The commercial market is expected to increase, and overtake utility scale developments in the long term PV is becoming increasingly cost competitive, and grid parity with Eskom MYPD3 blended tariff expected from 2018 PV is modular and scalable and quick to install, especially important considering the delays in the construction of Medupi (and Kusile) Low running costs and externalities associated with the generation of electricity from PV Superior job creation and socio-economic development potential

18 Thank you Clocktower, V&A Waterfront Andrew Bowden Vivienne Roberts