SA needs to change to smart grid
Transitioning the grid is key to establishing an efficient, affordable and healthy electricity system that benefits all, write Dirk de Vos and Nicole Löser
One of Eskom’s objections to signing up additional renewable energy independent power producers (IPPs) is the alleged expense of strengthening the grid in areas in which many IPP projects are situated.
This objection raises deeper issues about the grid — how it is managed and developed, and what this means for the future development of renewable energy in SA.
Transitioning the grid is key to establishing an efficient, affordable and healthy electricity system that benefits all. Delaying this to advance further coal and nuclear power would be to the severe detriment of the public.
The current design and layout of the transmission grid is an outcome of Eskom’s mostly coal-fired generators. The grid is designed to take power from these generators — situated primarily in Mpumalanga and the Waterberg in Limpopo where the coal is located — and to transport it to the country’s main load centres. Most renewable energy development in SA has taken place in designated areas known as renewable energy development zones, where renewable projects have the best sun and wind resources and can connect to the grid.
In a context in which no renewable energy before those developed under the Renewable Energy Independent Power Producer Procurement Programme existed, the zones provide a sound starting-off point for a renewables programme to get off the ground.
However, this approach relegates renewable energy to the margins, confining its future growth to trivial contributions as SA’s renewable energy resources are widely distributed. Still, it is significant that Eskom has been offered earmarked financing to strengthen its grid to connect existing and future projects within the zone on very favourable terms.
If SA wants to transition to a cleaner, more efficient and sustainable energy system, which it will have to do sooner or later, a different type of grid will have to be built, one that can accommodate a far greater share of renewables. Work on doing this is well advanced in countries such as Germany. Despite concerns about instability and having to manage the dispatch of standby generators actively, the German grid has proven to be extremely reliable, as processes of dispatch are largely automated and it does not require much active intervention.
Model simulations show that a renewables-friendly or "smart" grid, designed to accommodate a large number of decentralised renewable generators, is more reliable than a centralised baseload-orientated grid.
A smart grid would include more direct-current, high-voltage transmission lines to transmit efficiently from places where surplus electricity is generated to those with a deficit.
The opportunity to push for a smart grid is now, as SA’s current grid is in need of significant upgrading. Perpetual delays in upgrading the transmission grid are a direct consequence of Eskom’s large cost overruns on the Medupi and Kusile coal plants, which are squeezing out capital available for upgrading.
SA’s existing grid requires large investment anyway. Building a smart transmission grid will require no more capital and probably less than the necessary investment already earmarked for the grid. The current grid infrastructure costs SA money and the poor state of many distribution grids is the main cause of outages.
Smart grids do more than simply transmit electricity. They allow for better management of supply and demand and serve as a better investment, as they hold their value and allow increased returns to utilities.
The performance of listed utilities that have invested in smart grids has seen significant improvements over those that have not invested.
There is a pressing need to tackle the threats posed by electricity users defecting from the grid and turning to renewable energy sources such as embedded generation. This is mainly as a result of escalating electricity costs from large centralised coal and nuclear plants, as well as current limitations on the grid.
Electricity sales to high-consumption users cross-subsidise poorer households and have generated, and continue to make significant contributions to the budgets of local governments, but grid defection by high-income users makes this model unsustainable. More renewable energy must not negatively affect the poor.
The push to a smart grid at transmission and distribution level requires new thinking, particularly in regulating electricity utilities and the incentives in place.
The current electricity system needs reworking if SA intends to serve the best interests of its people and to ensure that its climate-change commitments are met.
Renewables will be better enabled to flourish and serve the constitutional objectives of social and environmental justice — as well as climate-change mitigation — if the grid is configured to do just that.
• De Vos is director of QED Solutions and Löser is an attorney at the Centre for Environmental Rights