Grid capacity constraints and the potential for nodal pricing
SAPVIA Networking Event
Corné van der Westhuizen
27 July 2016
Disclaimer
The calculations presented are done at a high level and only for the purpose of framing an opinion.
The results are preliminary and based on multiple assumption that need further refining.
Question 1: Is there a grid connection block?
Level 1: Substation Connection Capacity
Data Source: Eskom 2022 GCCA, 2016
Level 1: Substation Connection Capacity
Data Source: Eskom 2022 GCCA, 2016
Level 2: Area Transfer Limit
Data Source: Eskom 2022 GCCA, 2016
Level 2: Area Transfer Limit
Data Source: Eskom 2022 GCCA, 2016
Level 2: Area Transfer Limit per Substation
Data Source: Eskom 2022 GCCA, 2016
Level 3: Corridor Transfer Limits
?
Response to Question 1: Is there a grid connection block?
1.
Yes, there are immediate constraints in the central Northern Cape. These constraints can be
overcome by 2022, but will require significant transmission infrastructure investment by
Eskom
2.
Neighbouring areas currently still have large amounts of grid capacity available both at a
substation and area transfer limit level.
There is thus a grid connection block, but only in the [available] highest resource areas
Question 2: Can lower yields be offset by savings on
transmission losses and the cost of new transmission
infrastructure?
For simplicity this analysis will focus on Solar PV technology
Solar PV Yields
kWh/kWpeak/annum
Data Source: GEOModel Solar, 2013
Freely available from DEA
Solar PV Yield Variances
Data Source: Own interpretation
of GEOModel Solar, 2013
Single Axis Tracker Solar PV Yield Variances with Area Transfer Limits
2015
Data Source: Eskom 2022 GCCA, 2016
and own interpretation of GEOModel
Solar, 2013
Assumptions
Transmission losses
•
Losses in the transmission network vary between 3 – 10%, depending on the length and loading of
lines. The average losses for the entire transmission network is 3.2%.
•
One can assumed approximately 5% losses from remote (500 – 1000 km from major load centres)
highest solar resource areas on a constrained grid. With next best resource areas being half the
distance to major load centres these losses can probably be reduced the 2.5% - thus a 2.5% saving
New transmission infrastructure costs
•
For every 600 - 1000 MW generation added in the remote high resource areas an additional 500 1 000 km 400kV line at a cost of R 4 - 6 Mil/km (excluding substations) needs to be built.
•
At an average cost of 5 Mil/km for a 750 km line that can transmit 800 MW, it translates to R 350 Mil
per 75 MWac generation capacity added in the remote highest yielding solar PV areas.
•
With a 20 year payback of lines, and thus a 10% (R35 Mil) per annum repayment, and 2200
kWh/kWpeak/annum yield of a 86 MWdc single axis tracker plant (189 GWh/annum ), the
transmission infrastructure cost would be 18 c/kWh (or 25% increase on a 70 c/kWh tariff) for
dedicated transmission infrastructure.
Source: Eskom Strategic Transmission Planning, pers. comm., 2016
Response to Question 2: Can lower yields be offset by
savings on transmission losses and new transmission
infrastructure costs?
Yes, with about 2.5% reduction in transmission losses and R 350 Mil / 75 MWac (or 18c/kWh)
transmission infrastructure costs to keep developing the highest resource areas, it would
seem like large parts of the country with lower (~10%) solar PV yields could be developed at
the same or lower overall cost to the consumer.
Further benefits of moving solar PV development out of the highest
resource areas include:
•
•
•
•
•
Existing and already paid infrastructure
Eskom capital
Time
Dedicated vs shared infrastructure
Utilisation (regionally centralised battery storage?)
Source: Eskom Strategic Transmission Planning, pers. comm., 2016
Question 3: What would the tariff effect of nodal pricing
need to be to enable development in lower resource areas?
Tariff (R/kWh)
Correlation Between Single Axis Tracker Yield and Tariff
1000
1200
1400
1600
1800
2000
Yield (kWh/kWpeak)
2200
2400
2600
2800
3000
Tariff Variance Map
Single Axis Tracking Nodal Pricing Requirement
Assumption: Tariff in
highest yielding areas is
70 ZARc/kwh)
Data Source: Own interpretation
of GEOModel Solar, 2013
Response to Question 3:
The effect of nodal pricing would need to be
approximately 10 ZARc/kWh to enable the
development of single axis tracking in
neighbouring areas with available grid
connection capacity.
With a 20 ZARc/kWh nodal pricing development in
Gauteng, Limpopo and Mpumalanga with all its
available grid infrastructure would be on equal
footing
Question 4: How could nodal pricing be applied across
different technologies?
Nodal Pricing Across Technologies
•
Would one find the same results when doing similar calculations for other technologies such
as Wind and CSP?
- Probably not
•
If PV can be relocated and other technologies not, should available grid in areas with high wind
and CSP potential be ring-fenced for those technologies and PV developed somewhere else?
- Probably yes
•
Should there then be different nodal pricings applied to different technologies
- Probably not
Conclusion
•
The grid is only constrained in the highest resource areas.
•
For Solar PV the lower yields in some areas could be offset by reduced transmission losses,
savings on grid infrastructure investment, and the more efficient utilisation of existing and
new transmission infrastructure.
•
The same is probably not true for Wind and CSP development where the yield losses cannot
be offset by these savings.
•
Nodal pricing could be used to enable development of lower solar resource areas and in
doing so immediately overcoming current grid constraints.
•
The effect of nodal pricing would need to be in the region of 10 ZARc/kWh to achieve the
objective of migrating solar PV development to areas with available grid capacity. This is
significantly less than the >18c/kWh saving associated with the migration.
•
Nodal pricing should be determined from actual transmission losses, infrastructure costs,
and other socio-economic considerations.
•
The same nodal pricing should be applied across all technologies.
On
Track
Corné van der Westhuizen
Project Development Manager
juwi Renewable Energies (Pty) Ltd
Tel. +27 (0)21 831 6129
[email protected]
Questions?