The role of wind in addressing capacity constraints in the Philippines

Boracay_Gen1

There is a constant and gentle hum of generators on Boracay island.  In Sabang, the hotel managers told me about the regularity of brownouts, and the need for backup generators.  While there, I experienced only short intervals of power-outages, where backup gensets kicked in.  It’s different on Boracay.  For the last two days the hotel staff where I’m staying have turned the generator off while I’ve been there, to give it a rest.  It had been running for the whole day.  It kicked on in the middle of the night, which was not ideal, since our room is right next door.  They’re running these generators hard, for long periods.

Boracay_Gen2

Boracay_Gen
This is a little island, with an increasing population.  Sandy white beaches, warm water, diving spots and gentle lapping waves make it a tourist’s dream.  It also makes it a power utility’s nightmare I assume.  It’s less than a kilometre from Caticlan by boat, and this is effectively the main land.  Nabas Wind Farm, a project by PetroWind Energy Inc commenced commercial operation on the 10th June 2015.  On a clear(ish) day it’s visible from Boracay and looks impressive standing on the hill.  It’s a 36MW facility, built to supplement the power to Boracay, and qualified for P8.53/kWh (USD0.182/kWh).  Initially it was approved to be a 50MW facility, and at 36MW it’s clearly not enough on its own to address the capacity constraints, or there would still not be brownouts taking place.

With over 7,000 islands in the Philippines, it’s also clear that distributed energy is essential here.  The way that this country addresses its electricity constraints may be a lesson in how embedded generation, distributed generation, micro-grids, hybrid solutions and storage systems are rolled out.

Boracay_Gen3

CSIR study update – benefits of renewable energy to the South African economy

Last year the CSIR released a report which investigated the total cost or benefit that renewables had had on the South African economy in 2014.  This was conducted in light of a) a number of REIPPP Round 1 projects coming online in 2014 and being in operation for the first time and b) capacity constraints currently being experienced in SA (aka load shedding).

The study has been widely referenced by the renewables industry, because of its findings, as it calculated that the presence of renewables had benefitted the economy to the tune of around R800m.  I went to a talk given by CSIR, hosted by SANEA, earlier this year where Dr Tobias Bischof-Niemz from the CSIR described the methodology, the assumptions and the resulting findings from this 2014 report.

In short (very short), the study considers three main inputs:

  1. the cost of fuel avoided by renewables replacing traditional generation sources
  2. the cost payable to renewable IPP’s for electricity exported to the grid
  3. the effective burden that would have been felt by the economy during constrained intervals, where, if not for the presence of the renewables projects, Eskom would have been unable to meet demand (unserved energy)

The picture below shows how these three inputs were added together (or subtracted…) to determine the total benefit to the economy.

CSIR_costs

 

Some things to note:

  1. the cost of unserved energy was based on the DoE’s IRP
  2. projects online were mostly for Round 1 – where tariffs were a lot higher than in subsequent rounds (see previous post on this here)
  3. projects came online throughout 2014, and were gradually commissioned throughout the year

At the time this report was issued, South Africa was aware that it was heading into an extended period of loadshedding and I know that load shedding intervals and levels have increased since I’ve been away.  With this in mind, and considering that 30% of the cost savings to the economy realised by renewables was as a result of RE projects being able to assist with capacity constraints, there was a lot of interest in continuing with this study into 2015.

Yesterday, the CSIR released a press statement indicating that the study has been updated for the first half of 2015.  I found this on the SAWEA site, which you can download here.  The same methodology was used, and some of the finding announced include:

  1. Fuel savings realised from renewables offsetting coal and diesel amount to around R3.6billion
  2. cash spent on renewables for the period comes to R4.3billion
  3. 203 hours of ‘unserved energy’ avoided equates to a benefit to the economy of R4.6billion.

The total benefit to the economy resulting from renewables is therefore around R4billion (R3.6b+R4.6b-R4.3b).

This is fantastic news for the renewables industry in South Africa.  A very positive message to come out of years of hard work and perseverance by all involved.

It is simultaneously a very sad indicator of the extent of load shedding being experienced that the value of renewables in avoiding unserved energy is now nearly 60% of the total benefit; double that from 2014.

An incredibly important article to read, load shedding may well be a reality for us this winter.

From Business Day, full article found here.  Most important line for me: “Mr Gigaba was also at pains to point out that keeping the lights on at all costs was no longer tenable.”

SWITCH off your geyser between 5pm and 9pm, or face load shedding this winter, was the essence of the message conveyed by Eskom CEO Brian Dames and Public Enterprises Minister Malusi Gigaba at their briefing on the state of the system on Monday.

While this was the message, the words “there will be load shedding” were carefully avoided by both gentlemen.

Mr Dames, after being questioned, eventually said that only if faced with a blackout — that is, an unplanned catastrophic collapse of the system — would he “drop the load.” Mr Gigaba refused to say the words: “We will not say there will be load shedding, because you want us to say it.” However, he said that unless there was drastic behaviour change from consumers, Eskom would be unable to keep the lights on and certainly could not do the job alone.

While their message might be the last thing household consumers want to hear, the reality was that it was good news for at least two reasons. First, it represented a late (but better late than never) recognition that driving the power system hard, and delaying maintenance was shortening the life of Eskom’s assets and causing increasing equipment failures.

Mr Dames said that in the coming five years, maintenance will be done at a level of 10% a year without any compromise. Further, he said, that even during the winter months nine units — a unit is anywhere between 400MW and 800MW — will be taken down, as Eskom had reached a point “where maintenance cannot be delayed any longer”.

“The country must understand that for the last five years we have managed to keep the lights on. We did this by operating our power system much harder. Now it requires substantial maintenance to maintain performance,” he said.

Mr Gigaba was also at pains to point out that keeping the lights on at all costs was no longer tenable.