Overview of Solar PV in South Africa
Dr Christopher Haw
May 2013
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Structure of my talk
1. Introduction
2. Global and local trends and forecasts
3. Commercial end-use market issues
4. Addressing PV critisisms
5. Conclusions
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Introduction to me
Spokesperson & co-founder (SAPVIA)
Director
Konkoonsies 10MW solar PV facility
Aurora Power Solutions
SOLA
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100 Members and
growing
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SAVPIA
Represents industry at a national and provincial level
Informs its members of the latest trends and
regulatory developments
Promotes a higher penetration of the technology
Facilitates business to business contacts among
industry stakeholders
NOTE: SAPVIA will be launching an independent
research report (F&S, ARUP)
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A stark reality
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1000
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1950 2000 2050 2100
Worldwide possible coal production
M toe
OECD North America
China
LA
OECD Pacific
A
frica
OECD Europe
South
Asia
East Asia
FSU
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b
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itu
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subbituminous
subbituminous
b
itum
inous
bituminous
bituminous
bituminous
bituminous
lignite
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bituminous
Year
WEO 2006: Reference scenario
WEO 2006: Alternative policy scenario
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Global PV Capacities
source- EPIA
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Global predicted trends
source EPIA
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Utility vs Embedded scale
prediction
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Eskoms pilot SOP program for small scale embedded renewable energy achieved
its 20MW target within 9 months. Approximately 75% of that is PV.
New determination of 3200MW renewables for next three years
1000MW per year to be procured through REIPPP, estimated 300MW of PV
Small projects program of 100MW (majority of which will likely be PV)
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Distinct Market Segments
Utility scale ground mounted (REIPPP)
Program on track
Risks still exist in desperate projects low-balling
Will be dominated by international utilities
Embedded or small scale generation
Has greater opportunity for job creation, local
content and local economic development
Still has barriers to overcome which need political
support
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Global Trends
EPIA Market Outlook 2013-2017:
In the coming years, deployment strategies will depend much more
on the capacity of PV power to actively participate in the
electricity system
several key markets are already entering the transition phase
from an investor-driven market to an energy savings-driven market in
the building segments (residential, commercial and industrial).
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What are the barriers and opportunities to
solar PV for end-use consumers in South
Africa?
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Opportunities
Great solar resource
Rising energy prices
Technology prices dropping
Smart grid technology increasing
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Barriers
Municipal and National revenue loss
Utility lack of control over demand profile
No bi-directional energy flow restricts size
Market awareness and uptake
Wheeling costs
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Case Study Office Centre,
Cape Town
Installation and operation of a 700kW PV
system in CT.
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Good Solar Resource
Using satellite data predictions the
resource probability can be calculated
and guaranteed
Approximately 1650kWh/kWp
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Good Resource
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Opportunity - Load shifting
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Essential Loads
Non-Essential
Loads
Inverter/PLC
PV system
Stand-by
Generator
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Load shifting and
demand control
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PV Generation Old Load Profile New Load Profile
300kVA, 2 hours, R160 per KVA
Saving R48,000 p.m.
Equivalent kWh- 18,000
kWh value R2.60
A dispatchable generation source
with LCOE less than R2.60 is
financially viable.
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Load shifting
opportunities
Load shifting, or demand management, is in the best interests
of the Utilities.
Smart grids aim to improve demand management and
measurement
Embedded PV systems include components with the ability to
measure demand peaks and control non-essential or residual
loads.
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Barriers evident from the case study
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Size restriction
With no bi-directional flow allowed the system has to
be optimized to ensure minimum over-production
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Huge opportunities for embedded generation are lost
because regulation is not in place to allow back feed into
the system.
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Return generation
effecting Market Uptake
Evidence suggests that most medium size businesses require
payback period of 3-4 years to enable market.
This means IRRs of 25-33%.
Current returns with Eskom subsidy are 15-20% in Cape Town
and 20-25% in Johannesburg
Returns are difficult to calculate with complicated tariff
structures and require historical load profiles.
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Further support is needed to fuel further PV uptake:
Provide simplified tariff structures for embedded generators
Eskom SOP subsidy
Tax breaks, other..
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Wheeling Charges
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Eskoms wheeling charges can be as much as 18% of the tariff or approximately 30c/kWh in 2016, effectively discouraging
potential wheeling agreements in South Africa.
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Addressing the criticisms
of solar PV
1. It generates energy at the wrong time and
therefore does not contribute to the capacity
crisis
2. It has no storage and cant be used in a
baseload manner.
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Generation Timing
Load profiles evolve
with more urbanisation
and economic
sophistication
South Africa has both a
current peak crisis,
but also a future energy
supply crisis
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PV future costs in SA
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PV as baseload
Combined with
pump storage
(e.g. INGA), PV-
PS will be
cheaper than
coal by 2020.
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Water Usage
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Conclusions
Solar PV has a strong future in South Africa and is expected to
achieve rapid growth in the next 15 years.
Many of the critisisms aimed at PV are mitigated by its rapid
cost reduction ability and the evolving load profile
The commercial and industrial market segment will
experience growth as prices reach parity but require political
support and focused effort to amend restrictive regulation
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Thank you
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