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Opportunity

Planning for Smart( er ) Grid ‘ Technology innovation with an end in mind ’ A Presentation to the Parliamentary Portfolio Committee by SANEDI Presented by Dr. Minnesh Bipath and Dr. Willem de Beer. Opportunity.

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Opportunity

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  1. Planning for Smart(er) Grid ‘Technology innovation with an end in mind’ A Presentation to the Parliamentary Portfolio CommitteebySANEDIPresentedbyDr. Minnesh Bipath and Dr. Willem de Beer

  2. Opportunity • An opportunity exists for South Africa to improve service delivery and address the performance and electricity distribution related infrastructure backlogs of the 174 municipalities and Eskom Distribution, in a standardised, but holistic way.

  3. The electricity distribution industry is in a crisis and something needs to be done urgently Age of Facilities Cost/Revenue Reliability Demand Budget Competent skills Planning Horizon Electricity Price Customer Service Service delivery

  4. Why invest in the Smart Grid? • Through a study conducted by EDI Holdings during 2008 it was revealed that the estimated maintenance, refurbishment and strengthening backlog in the distribution network were calculated at R27,4bn (2008 values). • This backlog is growing at an alarming rate of R2,5bn per annum. • Current practices in the electricity distribution industry (EDI) do not guarantee business sustainability and economic growth, while the associated increased operation of under-maintained plant is posing a significant risk to the industry. • Despite the pockets of good performance, the 2007 NERSA Report on the state of EDI infrastructure demonstrated that the assets need urgent rehabilitation and investment. • Unless an immediate and direct intervention is initiated it will be very difficult to recover the industry from its downward trajectory.

  5. Why invest in smart(er) Grids? ...1 • The defunct EDI restructuring process was originally tasked with the responsibility of reforming the electricity industry and amongst others returm municipalities back to health; • With the closing down of the EDI Holdings there is a huge gap left in the electricity industry; • We currently have a resurgence of suppliers pushing their proprietary smart grid technology; • Risk of supplier lock in • Stranded assets • Technology dumping

  6. Why invest in smart(er) Grids? ...2 • In this disaggregated form there is scope for corruption and non service delivery risks. • If the electricity distribution industry is left alone to decide amongst others on technology options, we could end up with non standardised solutions. • What about integration of: • Renewables; • Energy efficiency; • Electric vehicles; • Electrification of public transportation; • Distributed generation; • Storage.

  7. Why invest in smart(er) Grids? • Between now and 2020, more than R250 billion will need to be spent to maintain and expand our electricity transmission and distribution infrastructures; • But without a smart grid perspective much of this money will be spent based on 20th century technology; • Under a business-as-usual scenario—without a smart grid perspective—that would be like expanding the nation’s telecommunications system without taking advantage of today’s digital and wireless technologies; • This is why the decisions to modernise the grid are so vital. • Will South Africa follow a business-as-usual pathway? Or will we step up to the challenge of a smart grid? There is a “case for action”

  8. The time has come for radical change “You cannot prevent the titanic from sinking by rearranging the deck chairs”

  9. What is the smart grid Information and Telecommunications infrastructure

  10. The Grid: Today vs. Tomorrow Source: NETL modern Grid initiative

  11. The Grid: Today vs. TomorrowSmart(er)Grid characteristics Source: NETL modern Grid initiative

  12. Smart(er) Grids become a Key Enabler in the Municipal & Industry Landscape

  13. Transfer Data into Knowledge & Management Information (Knowledge & Understanding) (Information) People in the Loop Smart Grid People in the Loop Information SCADA Data Acquisition Application Data Application in the Loop Supervisory Control Data SCADA

  14. Managing the Change to the Smart(er) Grid in a well coordinated manner that involves stakeholder Two Ways to get there—Market and Mandate

  15. Taxonomy of a smart(er) grid

  16. Geographic Information Systems e.g. GDC & TIPS Executive Information Systems e.g. Data warehouse & marts We are not Starting cold - Systems Architecture Support e.g. Finesse, HR Operational systems e.g. CRP, PIC, Maximo Data Infrastructure

  17. Key Traditional Grid Challenge

  18. The future grid

  19. Benefits of a Smarter Grid

  20. Secondary Benefits...1 • Standardise, processes, systems, operations and infrastructure; • Centralised procurement based on standards and best practices: • More power from suppliers to centralised buyer; • Opportunities to leverage FDI or local companies investment; • Remove wastage; • Move to supply chain management ; • Better management of stock and inventories; • Centralised stock warehouse; • eliminate opportunities for proprietary technology and stranded assets; • Encourage raw material beneficiation and job creation.

  21. Secondary Benefits...2 • Better budgeting, expenditure and cash-flow management of municipalities; • Better electricity prices over the long term; • Better service delivery; • Better data for planning and management.

  22. Barriers to the development of a Smart(er)-Grid • There are many reasons the smart grid is not emerging more quickly. Fundamentally, no single business owns or operates the grid. Individual players have little incentives to risk major change. With so many players in the grid system, finding a common vision for change is difficult but imperative. • The benefits are so broad and far reaching that perhaps only government can account for the cumulative societal value. Longer term financial incentives are needed to enable the larger infrastructure investments needed for the Smart(er) Grid • Regulatory and legislative barriers – change statutes, policy, and regulation to eliminate those that inhibit progress and create those that encourage progress and create a ‘win-win’ scenario for all stakeholders • Culture and communication – increase the understanding and awareness of stakeholders on the value of the Smart(er) Grid and encourage them to embrace the needed changes within their organisational cultures

  23. Barriers to the development of a Smart(er)-Grid • Industrial barriers – define the case for change, the ‘burning platform’, and provide the necessary incentives to engage industry on the smart grid. Industry will respond when it understands there is a profitable market for smart grid technologies and services. • Technical barriers – need to increase the speed of research, development and deployment. • Increase funding to support research, development and deployment for those technologies that are needed for the Smart-Grid • Work more closely with academia to develop the new human resources with skill needed for the Smart-Grid • Apply more priority and resources to the development of needed standards. • Clarify the pathway to the Smart-Grid by developing a transition plan that shows the intermediate milestones for achieving its vision

  24. Considerations • Need to apply the systems thinking; • All stakeholders need to be involved in the decision to move to a smarter grid; • Specialist skills need to undertake the task currently exist in the industry and would need to be seconded for the duration of the programme; • Rationalisation of jobs will be required and more sustainable jobs will be created; • Unions, SALGA will be key in decision making; • Funding currently does exist in the industry but will need to be re-prioritised.

  25. Progress to Date • Under the guidance and mandate of SANEDI a representative Smart Grid industry forum was establish to: • Integrate and co-ordinate the initiatives in the electricity supply industry; • Facilitate standards an inter-operatibility; • Optimise investments from a national perspective; • Leverage work done to date; • To direct the move towards an intelligent grid.

  26. Decisions Needed...1 • Establishment of an inter-department (DOE, DST, DTI, DEA, DPE, COGTA) Smart Grids Task Group. • Need access to one municipality to undertake the end to end demonstration. Need to answer the following questions. • What performance do we expect from the smart grid? • How would it be characterised to meet those expectations? • What technologies must be brought to bear? • How do we know if we’re succeeding? • How much will smart grids cost? • What manpower will be required? • How can smart grids be linked to the development of the SA economy? • What timelines can be expected?

  27. Decisions Needed...2 • Funding allocation to position the SA Grid to be able to amongst others: • Underpin the required economic growth; • Facilitate demand response; • Reduce the carbon footprint; • Enhance service delivery and improve customer satisfaction. • Who will be the South African Intelligent Grid Sponsor i.e. Lead South Africa to the ultimate Smart Grid?

  28. Questions ?

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