A nice summary of REIPPP Round 4 preferred bidders

Done, I believe, by ED Consulting.  I haven’t seen any formal announcements, but the ferreting fairies have been working hard since the letters were issued.

Well done to all who have been successful thus far.  We wait with bated breath for any further announcements.  I have heard rumours of expectations of a Round 4.5 being announced on Friday…

REIPPP_Round 4

When the formal announcement from the DoE comes out I will update the table of all preferred bidders and reissue to all who’d like it.

NERSA Small-Scale Embedded Generation: Regulatory Rules Consultation Paper highlights

I’m a bit late on this one as the comments were due by the 25th March and the public hearing was on the 10th April, but below is a summary of what’s in the NERSA consultation paper on small scale embedded generation regulatory rules, published at the end of Feb 2015.

The document seeks to establish the principles upon which small scale (primarily solar PV) generators can operate, and the tariff structures that will apply.  It also supersedes the standard conditions for embedded generation within munics document that was issued in 2011, as this only considered systems of up to 100kW (quite small).

The paper seeks to:

  1. solicit comments from stakeholders on the proposed regulatory rules for small-scale embedded generation; and
  2. explore various tariff options available in promoting and incentivising installations that are grid-tied


Registration versus licensing:

Recognising the administrative burden associated with applying for a generation licence, as required under the Electricity Act, the paper recommends that all systems under 1MW are registered with the local distributor instead.

Various information is required for each system, including “technical studies and report on how much the network can take on these installations.”  The viability of this requirement for each individual system should probably be considered, and I suspect what they’re after here is that the munic or distributor should have a good and thorough understanding of the network’s capacity to embed generators within their system.

Reporting requirements:

The munics or distributors are required to report various information on an annual basis to NERSA.

Grid interconnection standards:

While the NRS 097 series is not complete and do not cover all technical aspects relevant for grid connection of SSEG systems, all systems are to be compliance with NRS 097-2-1:2010 and NRS 097-2-3:2014.


NERSA has requested comment on the suitability of type testing on inverters used for SSEG systems, in the absence of a SANS certification or inverter standards.

Codes of practice:

NERSA provides a high level outline of how they would approach the following technical requirements, and asks for comments from stakeholders accordingly:

  • Grid connection requirements
  • Power quality and limits of liability
  • Technical performance
  • Information exchange protocols
  • Signals, Communication and Control Functions


The meaty bit of the document in my opinion.  The principles outlined in this doc are pretty similar to those explained in my previous post (found here)

They separate the tariff out into two main types:

Charges for consumption:

  • Fixed costs based on the installed capacity; and
  • Energy cost at a set tariff for net-import OR a time of use tariff

Revenue for generation:

  • Export credit for any net export of electricity.

This export credit will be equivalent to the avoided energy generation costs only, which for munics will be the marginal charge for electricity purchased from Eskom, or for Eskom, will be equivalent to the cost of generating electricity.

This is to avoid impacting any customers who are not listed as SSEG’s (again, see my previous post on this).

This means that NERSA is not proposing a net-metering structure where consumption and generation is weighted evenly in terms of energy cost, despite the fact that the term net-metering is used in the paper.

Eskom tariff changes: a quick and dirty look at some impacts on the City of Cape Town

Eskom tariff changes:

Eskom has recently had tariff increases approved by the energy regulator, NERSA.  The average tariff increase approved for 2015/16 equates to 12.69%.  This comes into effect from the 1st April for all non-municipal customers, and from the 1st July for the municipalities.

The individual tariffs that make up the whole Eskom tariff suite are not all changing by the same amount, however, and some are increasing more than others.  For example, the Megaflex tariff for municipalities is increasing by 14%, whereas the Nightsave Rural Tariff, for instance, is increasing by around 12.7%.  I haven’t looked through them all.

Another key change is that the morning and evening peak times that apply during winter months (June – August) are moving forward by one hour, to better align with national peak demand periods.

This is shown in the graph below [1]

Eskom ToU tariff change

How does this impact the City of Cape Town?

Mark-up implications

The City purchases electricity from Eskom at wholesale prices, and resells it on to its customers, after applying a mark-up.  The tariff mark-up is dependent on the allowable tariff structure, the fixed and variable costs associated with distributing electricity, the cross-subsidies inherent in the tariffs (for instance, to allow for free basic electricity to low-income households), as well as the extent to which NERSA allows for the sale of electricity to cross-subsidise the rates base (I believe this is around 10%).  This means that the City will not automatically be increasing their tariffs by 14%, as this would mean increasing their mark-up by 14% also.

However, increasing tariffs inevitably result in consumers using electricity more sparingly, which means that passing through Eskom’s tariff increases without increasing the mark-up would result in less ‘profit’ on electricity, and therefore less money to cover fixed costs and cross-subsidies.  This can result in the City needing to increase tariffs further to make-up for it.  Enter the vicious circle syndrome.

Time of use implications

With a simple tariff structure like the Domestic tariff, electricity was sold in 2014 at R1.35/kWh or R1.64/kWh (ex VAT), but the City is purchasing electricity anywhere between around R0.30/kWh to R2.10/kWh, depending on the time of use.

Therefore, it benefits the City the most if residential consumers consume electricity in off-peak times in summer, as they’ll be making the most ‘profit’ off the sale.  Electricity sold during peak times in winter, however, will actually cost the City money.  This is a result of the tariff structure, as the City is not able to pass through the time-of-use concept in their residential tariffs.

The City would therefore want Eskom’s peak period to be misaligned with their maximum demand period for all non-time-of-use tariffs.

The graphs below show an average household demand curve in January and June [2].  While these are not definitive and are based on 2010 data, they show that the change in the winter peak period could possibly benefit the City on the residential tariffs if winter peaks are sitting at around 8pm.  They also show the impact that electric geysers have on this peak period, and how solar water heaters or demand side management of geyser loads could help to lop off/shift that peak period.





1 – Eskom: “2015/16 changes to the winter time-of-use peak periods and tariff charge name changes”

2 – Trollip et al: “Potential impact on municipal revenue of small scale own generation and energy efficiency”

Summary of projects under the South African renewable energy independent power producer procurement programme

I am constantly looking for a summary of what has been awarded under the three (and a half) REIPPP rounds to date, and so thought I would put this on here, for my records as much as for your information.  I figure if I’m looking for it, someone else must be too.

Email me at vivi at energyramblings.com if you'd like this in table format
REIPPP Preferred bidders up to round 3.5

If you’d like a table version of the project and capacity summary, please drop me an email on vivi@energyramblings.com

Cape Town residential electricity tariff; how is it impacted by the installation of a solar PV system

A question came up from a solar PV installer in a forum session that I attended the other day that demonstrated that even those in the industry don’t really understand some of the challenges facing the City of CT with regards to tariff structure.  The question was something along the lines of “Why has the City come up with an embedded generation tariff with a daily charge that can be more expensive than the residential tariff – thereby disincentivising people to install solar PV systems on their home?” I’m paraphrasing.

To start with the basics:

There are two main tariff types for Cape Town households – Domestic and Lifeline. The intention of the Lifeline tariff is to provide low income households or, as it is currently set up, ‘low consumption’ households with free basic electricity (between 25kWh and 60kWh).  Some mid- or high-income households currently qualify, because they have a low monthly average consumption, but the City is planning to address this by including a maximum cap on the value of your property that qualifies (R300,000).

Let’s assume then that if you’re thinking about installing a PV system, you’re on Domestic, and not on lifeline.  If you can afford a PV system you’re probably not the target market for the free electricity programme anyway.

The VAT inclusive domestic tariff is currently set up like this, and will be increasing as of the 1st July.

  • 0-600kWh – 153.63c/kWh
  • > 600kWh – 186.81c/kWh

This is called an inclining block tariff (IBT) and there used to be a lot more blocks to it, instead of just two.  The more you use, the more expensive each kWh of electricity becomes.

There’s a lot written about IBT’s, and they’re designed to protect low-income households from increasing electricity tariffs.  They effectively represent a cross subsidy of electricity by the middle- and high-income households.

It’s not my intention to discuss the merits and demerits of this tariff structure in this post.

In response to increasing pressure for the City to allow installations of small scale embedded generators (which for the purpose of this post we’ll assume are all solar PV installations), the City developed the Residential Small Scale Embedded Generation tariff.

This tariff, for the first time, introduces a fixed daily fee which is payable, regardless of how much electricity you consume.  It is set up like this (VAT inclusive):

  • Service charge – R13.03/day
  • Energy charge – consumption – 109.17c/kWh
  • Energy charge – generation – 56.68c/kWh

What this means is that, for a 30 day month, you’d pay R390.90 in service fees, regardless of how much electricity you consumed or generated from your system.  However, you’ll notice that your marginal consumption tariff is around 2/3 of what you’d pay if you were a normal residential customer (block 1).  They have split out the fixed costs from the variable costs.

The City also does not allow you to sell them more than you buy, so you can never be a net exporter.  This will likely change in the future, but right now it’s in response to NERSA requiring you to have a generation licence if you sell power to another person, and this is the City’s way of getting around this.

Why has the City set it up like this?

Having the grid available to export electricity into, and effectively using as a battery, costs someone money.  There are maintenance or upgrading costs that need to be accounted for. This daily service charge is the City’s attempt to recoup these costs regardless of how much electricity you use.  This helps to separate the cost of the two services the City is providing; namely the provision of an electrical network, and the delivery of electricity in kWh’s.

If there was no service charge, who would pay for the grid? Ultimately, it would be people who did not have any embedded generation.  And who would that be?  Those who couldn’t afford it.  Which would effectively be a cross subsidy in the wrong direction.

And before you say ‘but it’s green energy, so should have a premium payable,’ that argument is nice for Germany, where people can afford to choose whether they’d like to have an installation on their roof.  It doesn’t work here.  And the recent trends in PV prices mean it doesn’t need to work here for PV to take off.

Commercial tariffs already have a daily service charge, so are already set up to slip nicely into an embedded generation tariff structure.  There is talk of moving the residential tariff away from an IBT structure.  If this happens this issue will become a non-issue and this blog post will become irrelevant.

Also, for the record, 186.81c/kWh is a big tariff to be paying.  If you’re consuming over 600kWh and have moved onto this tariff, you’ll be paying big money each month for electricity.


I’ve included the VAT amounts as this is what the average household will be paying.  If I was looking at the commercial set up, I’d probably be using VAT exclusive amounts.

You can read up the impacts that IBTs have had here: http://pdg.co.za/wp-content/uploads/2012/04/Have-inclining-block-tariffs-for-electricity-made-a-difference-published-in-Business-Day.pdf

The City’s current electricity tariffs can be found here: http://www.capetown.gov.za/en/electricity/Elec%20tariffs%20201415/Schedule%20of%20Consumptive%20Tariffs.pdf

The difference between solar thermal and solar PV

I was in a meeting this week and found myself talking to someone who confusing solar water heaters with solar photovoltaic panels.  This took me a bit by surprise as I thought people were quite familiar with the two different technologies, as they’ve been around for a while, but it seems not.

Solar Thermal

Solar water heaters or solar geysers use the heat from the sun to warm up water, most often in flat panels on the roof, or water contained in tubes surrounded by a vacuum within another tube.  The warmed water is stored in a geyser, which often has back up heater like a normal geyser, to ensure there is hot water even on overcast days.  Flat panels are often used in temperate climates, where there is a lot of direct sunlight and where it is not typical to have overnight sudden frost.  Evacuated tubes are good for colder climates, or where there is sudden frost overnight, as sudden freezing of water causes it to expand and can crack flat plates, whereas the vacuum around the inner tube provides a measure of insulation from frost.

Solar water heaters help to reduce the electricity consumed for heating water, and can be an excellent investment for households, where a large chunk of electricity is used on heating water.

Solar photovoltaic (PV)

Solar PV systems are able to convert sunlight to electricity.  They are typically made up of individual silicon based cells that are connected together in a module or panel.  They can be connected to a building’s distribution boards to supplement the electricity supplied by the grid, or the electricity can be exported directly from the system to the grid.  They are able to convert direct sunlight, or, depending on the type of module used, they can generate electricity even on a muggy day.  Unlike solar geysers, they perform better when the module temperature is kept fairly low, and the light energy that is most important; not the thermal energy.

Both systems can be installed together, as they serve very different purposes.  It doesn’t make sense to install a PV system on its own if your biggest electrical load is from your geyser, and if you don’t have any hot water needs, it clearly doesn’t make sense to install a solar water heater.

Other solar thermal applications

Solar thermal installations can also be used to generate electricity, but this makes use of the thermal energy to heat water to turn a turbine, to generate electricity.  Thermal -> mechanical -> electrical energy.  These are often large scale installations, called Concentrated Solar Power (CSP) but there are some small scale systems that have been installed.

Lastly, solar thermal can also be used to run a building’s cooling system, as strange as that sounds.  The water is heated up, the steam is used to power the chilling machinery, which runs the airconditioning system.  Thermal -> mechanical -> cooling.

Generally though, most solar thermal installations are your run of the mill solar water heaters.  How to tell which you have:

  • do they have a series of glass tubes? – solar water heater
  • if it’s a glass plate, do they have lots of individual squares that are distinguishable? – solar PV
  • if it’s a glass plate, which looks like a solid black panel and/or there’s a tank installed above it? – solar water heater

EDIT: I have been reminded that I forgot to write about absorption chillers.  Read up on them here: http://www.gasairconditioning.org/absorption_how_it_works.htm

Sustainability vs energy security

South Africa is an interesting place.  We seem to end up aiming for the same end results as first world countries, but with third world motivators.  Heaven forbid someone mentions technology helping us to ‘leapfrog’ developmental issues or another reference to the cell-phone uptake in Africa.  I will mention neither of those things in this post (again).

What I do find interesting is the driving force behind the uptake of small scale renewable energy and energy efficiency interventions.  

When I worked at the City of Cape Town the message that we kept pushing was that the efficient use of energy wasn’t something that was going to be a ‘nice-to-have’ feature.  It wasn’t going to be driven by carbon emission reduction targets, by corporate KPI’s or consultants pushing the green agenda.  It would largely be driven by the cost of energy.

That’s what we’re seeing.  Eskom’s recent tariff increases have led to increased interest in possible energy efficiency interventions and the competitive nature of the national renewable energy bidding programme has led to major decreases in the price of solar PV technologies.  

Of more interest to me though is what the recent loadshedding means.

I was in a meeting recently where there was talk about PV on a new development.  One of the guys said (well I’m paraphrasing, so don’t quote me quoting him) – I don’t care about how much you’ll save me on carbon, or if the payback is five years or ten.  I need to know that if the utility goes down my business can keep running.  If this installation means that we don’t have to shut down for two hour intervals on and off, it’ll pay for itself in no time.

Energy efficiency can help with your company’s P&L, but there won’t even be any Profit at all unless you have energy in the first place.  It’s a game changer when energy security concerns meet rising electricity tariffs.  Where we’re sitting today is very different from 2008; when we hadn’t experienced a whole whack of NERSA approved tariff increases.

The face of energy security itself is changing.   I know that in 2008 there was a massive rush at the local diesel genset store.  I also remember every restaurant on the Camps Bay strip having some form of generator in 2006 when someone thought a bolt in the Koeberg reactor would make for a fun story.  While solar technology is intermittent in nature, it has a role to play.  I’ve posted on here before about the continued work going into energy storage. A viable storage solution for renewable energy, resulting in independence or at least protection from an unstable grid is inching its way towards us.  

What makes a city resilient?

The list of the 50 most violent cities in the world has been making the rounds recently, with a lot of people being surprised that Cape Town has come in near the top of the list.

In 2012, as part of the Rockefeller foundation’s study into cities’ resilience and the indicators that can be used, the company I work for carried out a series of workshops, focus group sessions and interviews with various city stakeholders. From government officials, to NGO representatives.

The findings were fascinating and unsurprising. Cape Town suffers from chronic stress issues. Violence, hopelessness, hunger. Stemming from a legacy of inequality that is systemic in all things we do.

The City Resilience Framework was issued in April 2014 and you can find it here. http://arup.com/cri

This framework incorporates findings from a desktop study and from the field based research and is a very interesting read. What I wanted to share were 8 qualities or functions of a resilient city. Read through them and think about your city. If you’re in Cape Town, maybe think about this with the problem of violence in the back of your mind. Where do you come across these functions failing? Does your daily life impact on these areas of life for either you or someone else? Can understanding these help you to have more empathy for other people and the things they struggle with? What role does our municipality have to play in addressing these? What responsibility do we have? Where should we be applying more pressure?

A resilient city:
1. Delivers basic needs. Can people get access to food, water, energy?
2. Safeguards human life. Can a city respond to shocks and stresses to protect its inhabitants?
3. Protects, maintains and enhances assets. Are man made and natural assets treated and maintained properly, and are they utilized efficiently and equitably?
4. Facilitates human relationships and identity. Are cultures, heritage, language, religion and genders celebrated and empowered? Is diversity encouraged?
5. Promotes knowledge, education and innovation. Is the empowerment of our civil society promoted? Is education a priority? Is it easy to access, of good quality and available to all?
6. Defends the rule of law, justice and equality. Is the response to a violation of the law fair, reasonable and consistently applied? Are laws, policies and regulations fair, and are they implemented appropriately? Is there recourse for victims?
7. Supports livelihoods. Do people have hope that they will be able to provide for themselves and their community? Are there opportunities? Can they get to those opportunities?
8. Stimulates economic prosperity. Is trade supported?

What I feel could also be included under 8 is does it stimulate social prosperity? Are people happy.

After reading the above with my Cape Town hat on, I find it very easy to believe we are so high on that list. In a place where people have had their sense of identity eroded for decades, where the education system has been first unfair and then incompetent, where the rule of law is ineffective, where economic opportunities are thin on the ground, and people have to travel ridiculous distances to get there, and where basic needs are sporadically available. How then in the face of this can a city respond to continuous stresses; increasing drug use, the legacy of inequitable urban planning and segregation, continued immigration, global economic events… Without bending, cracking and breaking in parts.

But if we know where those pressure points are. If we are aware of what leads to a strong, flexible and resilient society are we not able to take action, collectively, to help pull us out of this list if shame. Let us be shamed to be ranking so high. Let us use that shame to get us to act.

What makes a city resilient?