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Industrial Scale Solar PV The case for municipal involvement

Industrial Scale Solar PV The case for municipal involvement. Santa Scheepers Distributed Solar. Introduction. SA can lead in solar power industry Excellent peak sunlight hours Innovation and resources ‘Dirty’ national electricity grid Grid factor: > 1 ton CO 2 per kWh

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Industrial Scale Solar PV The case for municipal involvement

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  1. Industrial Scale Solar PVThe case for municipal involvement Santa Scheepers Distributed Solar

  2. Introduction • SA can lead in solar power industry • Excellent peak sunlight hours • Innovation and resources • ‘Dirty’ national electricity grid • Grid factor: > 1 ton CO2 per kWh • Need renewable energy • Government has Integrated Resources Plan (IRP): • 42% of new generation is renewable until 2030 • 8GW targeted for solar PV alone • Hosting of COP17 gave impetus to green agenda

  3. SA Solar Energy Potential Source: Centre for Renewable and Sustainable Energy Studies, University of Stellenbosch. Redrawn after data obtained from NREL.

  4. Imagine turning this…

  5. … into a local power station Surface area: 100 Ha Marked area: 27 Ha (28%) Usable area: 10 Ha (10%) Potential output: 10 MW

  6. The solution No coal fired No nuclear every roof is covered with Solar PV If Then

  7. Rooftop Solar Options • Off-grid solutions • Grid tied • To augment municipal feed • Surplus to national grid using net metering • Independent Power Producer (IPP) • IPP sell to national grid via Power Purchase Agreement (PPA)

  8. Off Grid Solution Customer owned solar equipment Batteries Own feed Residential / Commercial Rooftop • Attributes: • Typically 5-100kW • No grid connection • Self sufficient, rural areas

  9. Grid-tied to Augment Customer owned solar equipment Batteries (Optional) Grid ConnectionPoint Meter Out Municipal feed National Grid Residential / Commercial Rooftop • Attributes: • Typically 5-100kW • With or without batteries, use municipal feed as backup • Not self sufficient

  10. Grid-tied with Net metering Customer owned solar equipment Grid ConnectionPoint Surplus Net meter Shortage National Grid Residential / Commercial / Industrial Rooftop • Attributes: • Net meter runs backwards when feeding surplus to national grid • ‘Sell’ at retail price (max=own usage) - save money, but can not make money.

  11. Rooftop Solar : IPP model IPP owned power plant Delivery Point IPP feed-in Grid ConnectionPoint Meter In Meter Out Customer feed National Grid Industrial / Commercial Rooftop • Attributes: • 1MW minimum capacity – requires 1Ha+ of usable roof space • Take part in IPP Procurement Process (tender) • Power Purchase Agreement (PPA) to sell to national grid at a premium

  12. IPP: The past… • REFIT (Renewable Energy Feed-in Tariff) • Talk, talk, talk of Independent Power Producers (IPP) • Promulgated in 2009 – but no Power Purchase Agreement (PPA) ever signed • First round of tendering 1025MW rumoured, never happened • Discussion document (March 2011) excluded rooftop • Technical hurdles: • Eskom insisted on 66kV, 20MW • Connection infrastructure lead time • Municipalities not mandated to be involved • Municipal Finance Act prevent higher price for clean energy • REFIT made no provision for municipal feed-in

  13. … is not the future • Everything changed on 3 Aug 2011 • Long awaited RFP published (DOE/001/2011/2012) • Known as “Independent Power Producer Procurement Process” • Due date: 1st Round 4 Nov 2011, 2nd round 5 Mar 2012 • More capacity on offer than expected – 3 750MW • Eskom may not tender – participate as Buyer and Transmission / Distribution partner only • For the first time - provision for Municipal Distribution Agreement!

  14. IPP Procurement Program • Technology (MW) • Onshore wind 1850 MW • Concentrated solar power 200 MW • Solar photovoltaic 1450 MW • Biomass 12.5 MW • Biogas 12.5 MW • Landfill gas 25 MW • Small hydro (≤ 10MW) 75 MW • Small projects (utilising any of onshore wind, solar photovoltaic, biomass or biogas Technologies which have a maximum installed capacity of 5 MW) 100MW

  15. IPP Procurement Process • RFP (DOE/001/2011/2012) is a massive document aimed at large scale projects • Finance and construction of power plants • Ultimate outcome: • Power purchase agreement (PPA) with Buyer (Eskom) supported by • Distribution Agreement with Municipality or Eskom or National Transmission Company • Implementation agreement (IA) with Department of Energy (DoE) to ensure economic development and other rules are adhered to

  16. IPP Procurement: Bid Process Register and get bid documentation R15 000 Compulsory1st and 2nd Round over ( 14 Sept 2011) Attend Bidders Conference Bid Bond R100k/MW 1st Round 4 Nov 20112nd Round 5 March 2012 Potentially up to 5 Submit Bid Legal, Technical, Financial Criteria Price 70% Economic Development 30% Qualify? Reject Technology or substation oversubscribed Competitive Evaluation Compete? Pass Qualification Criteria Bid Bond R200k/MW Preferred Bidder Preferred? Obtain license Sign contracts Sign Finance Deals Within 6 Months Reject Project fee 1% Project Financial Close

  17. Compliance Burden • Price limit for Solar PV = R2.85 • Consultants required (REMT can assist) • Environmental Impact assessment • Externally verified yield report • Audited financial model • Contracts drawn up/reviewed • Arrange financing and structure special purpose company

  18. Rooftop IPP: Regulatory framework

  19. Municipal Distribution Agreement • Municipality receives electricity from the IPP and distributes as normal • Notify Eskom (Buyer) how much energy received - added to normal bill from Eskom to Municipality • Pro-forma contract in RFP documentation - between Municipality and IPP for connection • Municipality does not sign PPA - someone else is paying for clean energy in your city! This was absolutely critical for rooftop IPP!

  20. Environmental Impact Assessment NEMA act – Listing Notice 1 (Basic EAI required) The construction of facilities or infrastructure for the generation of electricity where: i) The electricity output is more than 10 megawatts but less than 20 megawatts ii) The output is 10 megawatts or less but the total extent of the facility covers an area in excess of 1 Ha NEMA act - Listing Notice 2 (Scoping EIA required) The construction of facilities or infrastructure for the generation of electricity where the electricity output is 20 megawatts or more. Other potential considerations: • Phased activities where a combination will exceed specified threshold • Power lines > 275kV (Listing 1) • Power lines >275kV outside urban area or industrial complex (Listing 2)

  21. Distributed Solar • Distributed Solar is an IPP Project Developer • Registered and attended conference (ticket to play) • Respond to tender (2nd round) - main bidder on multiple projects • Focus is solar PV on commercial/industrial rooftops • Own and operate solar plant - rent roof space from owners

  22. Program Phakisa • Series of small pre-developed projects (cookie cutter style) • Cover exactly 9500m2 roof space with solar PV – 1.4MW peak capacity • 90% of project documentation standard (merge project info). Within municipal area it’s 99%! • Negotiate with municipality once and draw up distribution agreement • Obtain program-wide funding • Each project is almost automatically bankable • No EIA required, Reference yield report , Technical credentials established • Financial model developed and verified • Contracts and legal stuff drawn up • Just add land owner consent (sign pre-developed option to lease)

  23. What’s in in for building owners? • If you have large roof space (with enough carry capacity) to allow 1Ha of solar panels to be installed then: • Option 1: Rent out your roof space (extra margin) • Inflation linked additional income guaranteed for 20 years • Around R50k - R100k per Ha per year • Use to off-set your electricity costs • Option 2: Generate your own – rent out the rest • Reduce your carbon footprint • Energy security • Save on electricity costs • Enhanced reputation!

  24. Rooftop Solar: IPP model (Hybrid) IPP owned power plant Customer Owned Delivery Point IPP feed-in Grid ConnectionPoint Meter In Meter Out Municipal feed Own feed National Grid Industrial / Commercial Rooftop • Attributes: • Very large roofs - facility >1Ha (requires EIA) • Use income from renting roof space to fund own power equipment (Optional) • Significantly reduce carbon footprint at low effective cost

  25. What’s in it for your city? • Most PV from Solar Farms in Northern Cape (see map) but we focus on rooftop implementation in other regions • Local community benefits: • Investment in your local economy • Employment and training • Up to 1.5% of income spent on socio economic development projects • Local employee share scheme puts 2.5% into local hands • Brand your city as a hub for clean technology • Localise power supply • Need buy-in from local municipality • Quote for municipal connection / meter • Municipal Distribution Agreement as per RFP • This is a team effort

  26. Climate change adaptation Due to climate change we must expect more extreme weather events more frequently. This can cut off supply lines from centralised power sources. Therefore, Localisation of energy generation is a climate change adaptation strategy!

  27. Conclusion Let’s get this off the ground and onto our rooftops! Santa Scheepers santa6@mweb.co.za 0829295159

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