Solar photovoltaic research: Drakenstein Municipality

Rooftop Solar PV Solar photovoltaic research: Drakenstein Municipality Karin Kritzinger and Imke Meyer, Date 22/04/2015 Dialogue on Utility and Local Scale Renewable Energy in South Africa 22 April 2015-1

Contents Context of research Generation potential for PV in Drakenstein Potential of SSEG by private sector in Drakenstein Impact on municipal revenue Opportunities to install on municipal buildings Prefeasibility study 22 April 2015-2

Context of Research The 20% study - SU State of play of SSEG and impact on municipalities - WWF Overview of Drakenstein achievements to date - WWF Analysis of potential of SSEG by private sector - SU Potential impact on revenue - SU Opportunities to install on municipal buildings - SU Prefeasibility study - SU Financing of projects for the municipality - WWF 22 April 2015-3

Potential of SSEG by private sector in Drakenstein: Solar Resource Location Paarl Pretoria Kimberley Annual PV output (optimally inclined) 1 632 kwh/kw p 1 731 kwh/kw p 1 854 kwh/kw p 22 April 2015-6

Potential of SSEG in Drakenstein: PV Generation potential Dalweiding: 60 000 (Noorder Paarl, Daljosafat Industrial and Paarl East) Dwarsrivier: 30 000 (Pniel, Hollandse Mollen, Victor Vester, Pearl Valley and Val De Vie) Hugenot: 60 000 (Central Business district, Denneburg, Boschenmeer) Wellington: 30 000 Slot: 30 000 22 April 2015-7

Potential of SSEG in Drakenstein: PV Generation potential Dalweiding: 9 000 Dwarsrivier: 4 500 Hugenot: 9 000 Wellington: 4 500 Slot: 4 500 22 April 2015-8

kwh Solar photovoltaic research: Potential of SSEG in Drakenstein: PV Generation potential 6000000 5000000 4000000 3000000 2000000 Dwarsrivier Slot Paarl Municiplatiy Wellington Hugenot 1000000 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 22 April 2015-9

kwh Solar photovoltaic research: Potential of SSEG in Drakenstein: PV Generation potential typical summer day: Hugenot Eskom and PV 80000 70000 60000 50000 40000 30000 20000 10000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 22 April 2015-10

kwh Solar photovoltaic research: Potential of SSEG in Drakenstein: PV Generation potential typical winter(ish) day: Hugenot Eskom and PV 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 22 April 2015-11

kwh Solar photovoltaic research: Potential of SSEG in Drakenstein: PV Generation potential typical winter(ish) day: Hugenot Eskom and PV and loadshedding 90000 80000 70000 58 000 60000 50000 40000 128 000 30000 20000 10000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 22 April 2015-12

Potential of SSEG by private sector in Drakenstein Industrial user Residential user Usage analysis 22 April 2015-13

Potential of SSEG by private sector in Drakenstein Industrial user Paarl 30 kwp 11 identical sub systems with batteries Other; Natural light Solar geysers CFLs and LEDs Motion sensors 22 April 2015-14

Potential of SSEG by private sector in Drakenstein Industrial user 6000 PV production (kwh) 5000 4000 3000 2000 Total = ~45 000 kwh / year 1000 0 July August September October November December January February March April May June 22 April 2015-15

Potential of SSEG by private sector in Drakenstein Industrial user 30 April 2011 22 April 2015-16

Potential of SSEG by private sector in Drakenstein Industrial user 40000 Total Electricity use per month from PV and the grid 35000 30000 25000 13% 20000 15000 10000 87% 5000 0 22 April 2015-17

Potential of SSEG by private sector in Drakenstein Residential user Paarl SWH Heat Pump Gas hob EE lights Panel heaters 4.25kWp PV system 22 April 2015-18

Potential of SSEG by private sector in Drakenstein Residential user Electricity Usage 6 monthly 9000 8000 7000 6000 5000 SWH Heat Pump Gas hob Panel heaters in kids rooms Panel heater in main bedroom EE Lights (LED) 4.25kWp PV installation 4000 3000 2000 1000 0 2010: 1 377 kwh/m 2011: 1 259 kwh/m 2012: 1 344 kwh/m 2013: 1 287 kwh/m 2014: 1 128 kwh/m 22 April 2015-19

Potential of SSEG by private sector in Drakenstein Residential user Total Electricity use per month from PV and the grid 2500 2000 1500 1000 500 0 22 April 2015-20

Impact on municipal revenue Industrial user: 356 879 kwh / 45 798 kwh Residential user: 17 457kWh / 6 786 kwh 22 April 2015-21

Impact on municipal revenue 22 April 2015-22

Impact on municipal revenue 22 April 2015-23

Role of the municipality: the way forward Business as usual Policing illegal installations 22 April 2015-24

Role of the municipality: the way forward Municipalities play a dominant role in ED Business as Usual Perfect Harmony Small number of rooftop PV installations Large number of rooftop PV installations Central Control Hard Times Municipalities play no role in ED 22 April 2015-25

Small number of rooftop PV installations Business as Usual Municipalities remain the local distributors and resellers of electricity. All users of electricity dependent on a reliable supply of electricity from Eskom who, as a monopoly, can determine the price. Central Control Municipalities play a dominant role in ED Solar photovoltaic research: Perfect Harmony Municipalities, industry and private home-owners continue to install rooftop PV in collaboration with each other. The electricity generated by PV suplements the central electricity supply from Eskom and thereby increases security of supply in a stable electricity market. Hard Times Large number of rooftop PV installations Eskom / new regional distributors takes over electricity distribution. Stimulation and/or control of PV market out of the hands of municipalities, including the security of supply as well as the price. Municipalities play no role in ED Industry and private home-owners continue to install rooftop PV and financially secure clients become independent of the local/national grid resulting in a loss of revenue for both Eskom and the local municipalities. 22 April 2015-26

Contents Solar Resource Municipal Sites 1 Market Street Local Site concerns Load Characteristics Constraints Feasibility 22 April 2015-28

Location Paarl Mountain (Evl. 676 m) Paarl Haweqwa mountain range 22 April 2015-29

Solar Resource Location Paarl Pretoria Kimberley Annual PV output (optimally inclined) 1 632 kwh/kw p 1 731 kwh/kw p 1 854 kwh/kw p 22 April 2015-30

Municipal Buildings investigated Civic Centre 1 Market Street Electricity Building The location of the 3 sites in relation to Paarl Mountain 22 April 2015-31

Macro Site Concerns Electricity building Civic Centre 1 Market Street GHI [kwh/m 2 ] 2105 2104 2080 PR 77.7 % 77.5% 76.5% Specific Yield [kwh/kwp] 1644 1643 1625 The macro shading results in +/- 1% difference in yield. 22 April 2015-32

Site constraints 1. Available Roof Space 2. Building Usage Load Approx. usable roof space: 1000 m 2 Approx. minimum usage: 20 kw 22 April 2015-33

Building Usage Load: Details Hourly Averaged Plots for Each Month, Weekdays only Hourly Power Usage Averaged for Each Day of the Week Approx. minimum weekday daylight usage: 90 kw Approx. minimum weekend daylight usage: 20 kw 22 April 2015-34

System Configuration 25 kwp System 50 kwp System 0.9% difference in near shading losses 22 April 2015-35

System Output 25 kwp System 50 kwp System Morning and afternoon peaks need to be addressed to achieve maximum savings 22 April 2015-36

System Output 25 kwp System 50 kwp System Total excess electricity: 75 kwh Total PV electricity produced: 27 763 kwh Excess negligible in comparison Total excess electricity: 4 100 kwh Total PV electricity produced: 54 335 kwh Excess electricity is 7.5% of the total electricity produced over this period 22 April 2015-37

Scenarios Investigated 25 kwp System 1. Building billed on the Drakenstein 2014/2015 Bulk Time of Use Medium Voltage Tariff 2. Eskom Bulk Time of Use Megaflex Tariff 50 kwp System 1. Building billed on the Drakenstein 2014/2015 Bulk Time of Use Medium Voltage Tariff 2. Eskom Bulk Time of Use Megaflex Tariff 3. Building billed on Large Power Users Small Scale Embedded Generation Medium Voltage tariff 22 April 2015-38

Financial Assumptions Funding scenarios 100% upfront capital funded, 50% upfront capital funded and 100% loan funded Capital Costs scenarios investigated R 16/W p, R 18/W p and R 20/W p Annual electricity increase over 20 years 12.2% year on year for the first 2 years, 8% for the next 10 and then 6% for the remaining 8 years Inflation rate 5.5% PV production degradation Linear to 80% of original production in year 20 Project lifetime 20 years Inverter replacement cost R 3.20 /W p O&M 0.35% of initial project cost annually Depreciation Depreciated over project life time Discount rate 5.5% Lending Rate 10% 22 April 2015-39

Feasibility Results: 25 kwp System Scenario 1@ R 18/W p Scenario 2@ R 18/W p Total cost over project lifetime (Building billed on Bulk Time of Use Medium Voltage Tariff) (Building billed on Bulk Time of Eskom Megaflex Tariff) 100% 100% upfront upfront 50% capital upfront funded 100% Debt 100% upfront 50% 100% upfront upfront capital 100% Debt funded capital funded capital funded funded capital capital funded funded 100% upfront capital funded 100% upfront capital funded funded R 584 917.60 R 888 485.91 R 1 192 054.22 R 584 917.60 R 888 485.91 R 1 192 054.22 Project IRR 9.02% 8.35% 5.37% 6.07% 3.19% -7.85% NPV R 170 653.19 R 84 558.71 -R 1 535.77 R 25 429.27 -R 60 665.21 -R 146 759.69 Payback period [years] 11 13 17 13 17 20+ LCOE of PV energy over duration of project LCOE of Utility energy over duration of project 100% upfront capital funded R 0.78 R 1.49 R 2.19 R 0.78 R 1.49 R 2.19 R 1.76 R 1.76 R 1.76 R 1.37 R 1.37 R 1.37 22 April 2015-40

Feasibility Results: 50 kwp System Saved [ZAR] % of total savings Energy Charge (used when produced) R 44 415.34 Energy Charge (accounted for through netmetering) R 1 575.59 83.97% Demand Charge R 8 781.99 16.03% The excess savings amounts to 3.6% of total energy savings This increase in savings is less than the cost decrease in active energy charge (14%) Since the cash flow of a project is the result of the avoided electricity costs for this sized system and required electricity load, positive returns are not expected. 22 April 2015-41

Feasibility Results: Comparison 50 kwp 25 kwp Scenario 1@ R18/W p (Building billed on Bulk Time of Use Medium Voltage Tariff) Scenario 3@ R18/W p (Building billed on Large Power Users Small Scale Embedded Generation tariff) Scenario 2@ R18/W p (Building billed on Eskom Megaflex Tariff) 100% upfront capital funded 50% upfront capital funded 100% upfront capital funded 50% upfront capital funded 100% upfront capital funded 50% upfront capital funded Total cost over project lifetime R 1 169 835.20 R 1 776 971.82 R 1 173 135.20 R 1 782 497.99 R 584 917.60 R 888 485.91 Project IRR 8.20% 6.96% 7.24% 5.29% 9.02% 8.35% NPV R 256 444.10 R 84 255.14 R 161 178.48 -R 11 641.84 R 170 653.19 R 84 558.71 Payback period [years] 11 13 12 15 11 13 LCOE of PV energy over duration of project R 0.83 R 1.59 R 0.79 R 1.51 R 0.78 R 1.49 LCOE of Utility energy over duration of project R 1.76 R 1.76 R 1.55 R 1.55 R 1.76 R 1.76 22 April 2015-42

Lessons Learnt For this specific building it is more feasible to discard excess energy and remain on the bulk time of use tariff rather than moving over to the embedded generation tariff because of: The roof size and shading constraints The required load of the building In order for the net metering option to make a good business case the system needs to be significantly larger then the required day time load. Manage the load of the buildings, always the first step is to put energy efficiency measures in place PV system will also help create awareness and set a good example for others to follow 22 April 2015-43

Thank you Karin Kritzinger & Imke Meyer 22 nd April, 2015 www.panda.org 2010, WWF. All photographs used in this presentation are copyright protected and courtesy of the WWF-Canon Global Photo Network and the respective photographers.

Drakenstein Bulk Time of Use Medium Voltage Tariff 2014/2015 Charge Value Fixed Charge R 1 296.00 Demand Charge per kva R 44.00 Access Charge per kva (12 months) R 37.00 High demand season Low demand season Active Energy Charge [Jun-Aug] [Sept-May] Peak [R/kWh] R 1.853 R 1.1369 Standard [R/kWh] R 0.7778 R 0.6358 Off peak [R/kWh] R 0.4463 R 0.3947 Reactive Energy per kvarh R 0.0200 22 April 2015-46

Drakenstein Large Power Users Small Scale Embedded Generation Medium Voltage Tariff 2014/2015 Charge Value Fixed Charge R 1 495.00 Demand Charge per kva R 52.00 Access Charge per kva (12 months) R 44.00 Active Energy Charge High demand season [Jun-Aug] Low demand season [Sept-May] Peak [R/kWh] R 1.5924 R 0.9771 Standard [R/kWh] R 0.6684 R 0.5464 Off peak [R/kWh] R 0.3836 R 0.3392 Reactive Energy per kvarh R 0.0200 22 April 2015-47

Eskom Time of Use Megaflex (local authority) Tariff 2014/2015 Charge Value Service charge R/Account/day R 2 813.83 Administration charge R/POD/day R 89.86 Transmission network charge per kva R 5.73 Network access charge per kva R 4.12 Network demand charge per kva R 7.62 Urban low voltage subsidy charge per kva R 10.09 Reliability service charge per kwh R 0.0027 Electrification and rural network subsidy charge per kwh R 0.0559 Active Energy Charge High demand season Low demand season [Jun-Aug] [Sept-May] Peak [R/kWh] R 2.2224 R 0.7249 Standard [R/kWh] R 0.6732 R 0.4989 Off peak [R/kWh] R 0.3656 R 0.3165 Reactive Energy per kvarh R 0.1010 R 0.00 22 April 2015-48

Electricity Building 22 April 2015-49

Civic Centre 22 April 2015-50

1 Market Street 22 April 2015-51