IPP’s seek compensation in South Africa for throttling back power requests from Eskom

• Reuters reports that IPP’s in South Africa are seeking compensation for revenues lost when adhering to requests from state utility Eskom to limit electricity supply to the national grid, industry executives said.
• Local IPP SOLA Group’s two Lichtenburg solar PV plants, which each produce just over 100 megawatts (MW), were requested in April and May by Eskom to cut output by up to 80% and produce only 20 MW per day.

Eskom has submitted a proposal to the country’s energy regulator to introduce a mechanism to compensate independent power producers (IPPs) for lost revenue resulting from curtailment rates of up to 10%.

The curtailment requests are due to a lack of capacity in South A            frica’s transmission sector to accommodate renewable energy feed in.

South Africa’s transmission infrastructure is designed mainly around base-load coal-fired power generation. To accommodate new generation capacity, the bulk of which will come from renewables, the country will need to quickly ramp up transmission infrastructure (transmission lines, transformer capacity and energy storage) to accommodate variable loads and ensure grid stability.

The Managing director of Eskoms’ new Transmission Company, Mr Segomoco Scheppers, said that the country needed to add more than 1500 km of new transmission lines annually over the next ten years. This is to ensure transmission capacity to accommodate more than 50 GW of new generation power which will mainly come from intermittent renewable energy (wind and solar projects).

Currently, Eskom’s transmission division is adding 300 km of new power lines annually. Scheppers confirmed that in the last ten years, only 4 347 km of new powerlines were added.

Another challenge is transformer capacity. Scheppers confirmed that more than 122 600 MVA transformation capacity would have to be added, representing 77% of Eskom’s current installed base of just over 160 000 MVA. In the last ten years, only 19 060 MVA has been added to the grid infrastructure.

South Africa’s Minister of Electricity, Dr Kgosientsho Ramokgopa, has confirmed that the National Energy Crisis Committee (Necom) is considering a public–private partnership model for transmission infrastructure to accommodate new generation capacity which includes intermittent renewable energy. The capex on this is pitched at R210-billion which Eskom and the government does not have. He added at the time that there was no intention of relinquishing state ownership of the grid. Read more

“We are hoping that there will be adequate compensation for generation that is curtailed,” Ian Burger, a technical director at private power developer SOLA Group, told Reuters.

Eskom studies indicate that the costs of curtailing renewable energy are significantly lower than the billions of dollars required for upgrading the network to connect the same amount of renewable power to the grid.

By reducing generation from independent producers, Eskom hopes to immediately free up an estimated 3,470 MW of additional capacity on the constrained grid Reuters reports

Author: Bryan Groenendaal