Analysis of options for the future allocation of PV farms in South Africa

Transcription

1 Analysis of options for the future allocation of PV farms in South Africa

2 M.P.E. GmbH International Engineering and Consulting company with offices in Germany (Tübingen) and U.K. (London). Services: Grid Connection of onshore and offshore wind farms (largest project: 2000MW offshore wind connections in Germany) and PV farms. Wind farm and PV farm planning (EPCM contracts) Consulting services relating to the grid integration of renewables. Main clients: transmission system operators, distribution network operators, regulators, ministries International reputation: Germany, U.K., South Africa (GIZ), Pakistan (USAID), Vietnam (ICASEA), Ghana, Nigeria, Mexico, Honduras, El Salvador, Indonesia, Philippines

3 Background According to IRP 2010, up to 8400MW of IPP-PV farms will be installed in the not too far future. Most projects are planned to be located in the Solar Corridor -> Substantial Transmission Reinforcements will be required On the other hand, solar irradiation in other parts of SA, which are closer to load centers, is still very good. Allocation of PV closer to load centers would lead to slightly higher LCOE but would require less transmission reinforcements. Question: What would be the overall economic impact if PV farms were

4 Background

5 Scenarios Installed PV capacity 8400MW Target year (grid): 2020 Scenario A: Maximum energy yield -> Allocation of PV farms predominantly in the solar corridor ( as planned scenario) Scenario B: Minimum grid reinforcements -> Allocation of PV farms close to load centers Scenario C: REDZs -> Allocation of PV farms predominantly in the Renewable Energy Development Zones (REDZs).

6 Scenario A

7 Scenario B

8 Scenario C

9 Scenarios Province Scenario A [MW] Scenario B [MW] Scenario C [MW] Northern Cape North West Free State Mpumalanga Limpopo KwaZulu Natal Gauteng Eastern Cape Western Cape Total

10 Scope of Work Calculate LCOE of PV farms allocated in each of the three scenarios. Carry out a transmission expansion study for each of the three scenarios and identify required transmission grid upgrades Estimate required distribution grid upgrades on basis of a simplified assessment. Calculate the impact of PV generation on grid losses for each of the three scenarios Calculate the total LCOE of PV production, including cost of transmission upgrades (LCOT), distribution upgrades (LCOD) and losses (LCOL)

11 LCOE Calculation PV CAPEX and OPEX PV Plant (static) [USD/kWp] $ 1.850,00 PV Plant (tracked) [USD/kWp] $ 2.000,00 Substation [USD/kVA] $ 15,00 Annual operation costs (static) [USD/kWp] $ 31,50 Annual operation costs (tracked) [USD/kWp] $ 35,00 Financial Share of equity 25,0% Share of dept 75,0% Return on equity (nominal) 17,0% Interest rate on dept (nominal) 13,0% Credit period [years] 16 WACC nominal 14,0% Inflation 5,7% WACC real (year 1 to 16) 8,3% WACC real (year 17 to 20) 11,3% Time of Use [years] 20

12 LCOE Calculation Scenario A Scenario B Scenario C LCOE in USD/kWh, static systems 0,1198 0,1244 0,1229 LCOE in USD/kWh, tracked systems 0,1116 0,1171 0,1153 Table shows average LCOE of each scenario LCOE of analyzed plants ranges from 0,1 USD to 0,135USD depending on the region. LCOE slightly higher than actual bids, which may be due to the assumed financial parameters.

13 Grid Expansion Scenario A Scenario B Scenario C Transmission Lines (400kV/275kV) in km Number of Substation Transformers Distribution Lines (132kV/88kV) in km Scenario A Scenario B Scenario C CAPEX of Transmission grid upgrades in Mio. USD 554,73 135,27 165,13 CAPEX of Distribution grid upgrades in Mio. USD 670,76 423,03 445,73 Total CAPEX of grid upgrades in Mio. USD 1.225,49 558,30 610,86 tracked systems Scenario A Scenario B Scenario C LCOT in USD/kWh 0,0036 0,0009 0,0011 LCOD in USD/kWh 0,0044 0,0029 0,0030 Total (LCOT+LCOD) in USD/kWh 0,0080 0,0038 0,0041

14 Grid Expansion - ScA Line overloads, before reinforcements

15 Grid Expansion - ScA new line upgrade to 400kV new line new line new line

16 Losses - Approach Load flow simulations considering the complete SA transmission grid for one year (resolution: 30min) Time series data of all substation loads Time series data of PV generation Different levels of wind generation assumed Cost optimized dispatch of conventional generation (based on Merit Order and additional constraints and rules) Cost evaluation based on Long Run Marginal Cost: LRMCmax: 1200ZAR/MWh (113,5USD/MWh) LRMCmin: 600ZAR/MWh ( 56,75USD/MWh)

17 Load and PV Generation 70000, ,00 DIgSILENT 60000, , , , , , , , , ,0 3854,3 3868,6 3882,9 3897,2 0, ,5 x-achse: Loss Assessment: Hour of Year Loss Assessment: Load [MW] Loss Assessment: PV Generation [MW]

18 Losses - Results Base Case Scenario A Scenario B Scenario C Av. Power Losses in MW Annual Energy Losses in GWh Difference, Power in WM Difference, Energy in GWh 0-802, , ,848 Scenario A Scenario B Scenario C LCOL, max LRMC in USD/kWh -0,0057-0,0063-0,0062 LCOL, min. LRMC in USD/kWh -0,0029-0,0031-0,0031 LCOL, average LRMC in USD/kWh -0,0043-0,0047-0,0047

19 Main Results Total LCOE of PV generation, including CAPEX, OPEX and energy yield of PV farms, transmission and distribution grid upgrades and impact on losses

20 Conclusions: Main Conclusions and Recommendations All three scenarios result in very similar economic impact In Scenario A, energy yield of PV farms is the lowest but cost of transmission upgrades is the highest. Losses are reduced in all cases with PV (compared to cases without PV). Beneficial impact on losses. Recommendations: Because overall cost of the three scenarios is almost identical, decisions can be taken considering additional aspects, such as environmental aspects, socio economic aspects and the timely realization of the required grid upgrades etc.

21 Thank You! Markus Pöller Geeven Moodley M.P.E. GmbH DOWNLOAD: or go to and search for allocation