Building a (Virtual) Power Station - one day workshop

Building a Virtual Power Station
One Day Workshop
By David Lipschitz
My Power Station Technology
8th April 2013
Phone: 021 551 9935; 074 119 3246
Email: david@mypowerstation.biz; skype: MyPowerStation
(c) My Power Station Technology (Pty) Ltd 2013
Permission is given to copy parts of this presentation as long as the Author is referenced 1

Wildpoldsreid
• Make twice as much energy as you need
• Clever Energy
– How?
• Work together
• http://www.youtube.com/watch?v=Tzc77Lqkl
dk (aa1)
(c) My Power Station Technology 2013 2

Wildpoldsreid
• A city wide learning centre that makes the
citizens money and helps everyone
understand the technology and its social
impact
• Storage
– Hydrogen (H) + CO2 = Methane CH4 & Oxygen

Work Smarter
• Smarter Grid
• Distributed Storage
• Active Participation
• http://www.youtube.com/watch?v=5_J97qpF
0I4 (aa2)

Introduction
Setting the context
Developing the framework for a Virtual Power Station
Systems Thinking

Virtual Power Station
• Power Station (Plant): Producing electricity
(and heat)
• Virtual: Simulated(not in one place)
• Power Station
– Centralised
• Virtual Power Station
– Decentralised; integrated; smart

© Orbital Renewable Energy
2009
Power Supply Today: A Few Power Plants For Many Users
Downsides:
Use of un-renewable resources
Air pollution
Ozone hole
Global warming
More natural disasters
Health risks
Loss of life quality
Dependence on OPEC,
governments and corporations
Nuclear danger
Nuclear waste
High costs for governments
and end-users due to results of
natures’ abuse

© Orbital Renewable Energy
2009
Power Supply Tomorrow: Many Private Power Producers
Benefits:
Use of renewable resources
No air pollution
Turn around of global warming
Healing of the planet
Creating a future
No health risks
Enhancement of life quality
No dependence on OPEC,
governments & corporations
No nuclear danger
No nuclear waste
Affordable, healthy and
environmentally friendly
energy for everybody,
everywhere

My Power Station
• My Power Station helps you power your life,
internally and externally
• Software, Energy, Power
• Internal Energy
– What keeps us going internally
– Sport, Exercise, Learning, Health, Family
– Power comes from sharing, trusting and working
together
• External Energy
– External inputs to ourselves; Money, Work, Jobs(c) My Power Station Technology 2013 9

Eskom 49m Energy Saving Campaign

Why are you here?
• What would you like to get out of this
workshop?
• Why?

Why I’m here
• I’d like you to leave here with the essential
toolset to convince yourself and your board of
directors and customers of the possibility of
solving our electricity crisis
– And reducing our cost of living
• For ourselves
• For our home, planet earth
– And making money and profits, sustainably
• What electricity crisis?

We’re in trouble!!
• South Africa
– No new base load power station build in the past
20 years
– vs: China: >1 GW per week added to their grid!!!
– China installed 18 GW of Wind in 2011; 40 GW
was installed worldwide. Zero in South Africa
– By end of 2012, China had 75.5 GW of Wind
(growing 80% per annum since 2007)
– In 2012 China produced more wind energy (100
TWh) than Nuclear (98 TWh)

We’re in trouble!!
• Can you see where South Africa’s going?
• New Coal Power Stations: only 10 GW
– Electricity is already sold!!
– 10.5 GW will be decommissioned in 2020’s

Electricity Build and
Decommissioning
From White Paper on Renewable Energy, 2003
2008 Load Shedding
Spare Capacity

Money
• Existing or New?
• Can’t we use existing money to finance our
new build?

News on 15th May 2012
• “Work to begin on 68km R5.2 billion in Nov
2012 (R5,200,000,000) railway line to supply
Majuba Power Station with 14 million tons of
Coal per annum” (Actual Start March 2013?)
– http://www.engineeringnews.co.za/article/work-on-r52bn-majuba-rail-line-to-begin-in-
nov-eskom-2012-05-14
• R100 billion being spent on new coal mines
• At least R2 Trillion on New Power Stations
– & R166 bn on The Grid (Eskom Transmission Plan)
• 5,000 x 1,200 kWh per month houses can be
permanently “removed” from the grid per R1bn, so
R2 Trillion is at least 10 million houses

What happened at Majuba?
• Majuba built in 1980’s. Majuba coal mine had
certain geological deficiencies, so coal is
trucked in from up to 68 km away.
Photo from Bloomberg

BRICS
Brazil, Russia, India, China, South Africa
• Page 69: NPC Report (Nov 2011): “Brazil, China, India, Indonesia, South
Korea and Russia will account for more than half of all global growth,
growing by an average of 4.7% a year to 2025, by which time their share of
global GDP will have grown from 36% to 45%.”
– My Comment: [It is time for South Africa and Africa to
shed its association with its colonial masters, England,
France, Germany, Portugal, Spain, and the USA, which are
part of the dying Western Empire, and change to a much
closer association with the Asian Tigers, BRICS (China
(9.5%)), Indonesia, South Korea, and of-course the African
Tigers: Ghana (13.5%)(2nd highest), Mozambique (7.2%),
Ethiopia (7.5%), Nigeria (6.9%), Botswana (6.2%), South Africa
(3.4%). 36 Africa countries growing faster than the RSA.
– Qatar (18.7%), India (7.8%), Russia (4.3%), Brazil (2.8%), Germany
(2.7%), USA (1.5%), UK (1.1%), Portugal (-2-2%), Greece (-6%)]
– Growth rates in % are net growth after inflation.

China’s 12th 5-year plan tabled in 2011
• “Has a striking change from the past”
• “From
– A focus on investment-driven, high energy and
low-cost manufacturing”
• “To
– Low-carbon industries, new energy, next
generation information technology and high-end
manufacturing
– China’s goal is to achieve 15% global share of
these industries, compared with 3% now (in 2011)”
South Africa is still stuck here!
Note that the Chinese quote comes from
the NPC document! Page 69, NPC Plan 2020

Money will be borrowed
• Reason for the BRICS Development Bank!
• The BRIC will lend money to the S!
• The BRIC needs South Africa’s resources
• A no-brainer for them
• But the resource curse for us:
– The resource curse (Paradox of Plenty) refers to the paradox that countries
and regions with an abundance of natural resources, specifically point-source
non-renewable resources like minerals and fuels, tend to have less economic
growth and worse development outcomes than countries with fewer natural
resources.
– https://en.wikipedia.org/wiki/Resource_curse

News on 28th March 2012; and 27th March 2013
• President Jacob Zuma at the BRICS conference
seeking R1 trillion for the next 20 years
infrastructure expansion program
• Other BRICS countries growing at 10% per
annum after inflation; SA at 2%
– 10% + 5% inflation = R450 billion this year!
• Does government need to borrow this R1
trillion with us citizens (and countryside) as surety?
– 1 million new jobs; R1,000,000 debt per job!
– 50 mil to 57 mil people by 2020: need 3.15 mil jobs!
• Is there a better way? Using VPS Ideas?

R1 bn = 5,000 houses(VPS & Jobs)
• What is R1 bn anyway?
– Electrify 5,000 * 1,200 kWh per month houses
– 5,000 Smart Electricity Meters
– 5,000 inverters
– 5,000 solar water heaters
– 200,000 solar panels (Photovoltaic PV)
– Circuit Breakers; Cable; Fuses; Grounding Rods
– People
• 250 installers per year for the PV
– 25,000 installers employed for at least 20 years for entire country
• Manufacturers; designers; support people; etc

And
Only govt loan guarantees are required
– Supported by the Trevor Manuel and National
Planning Commission (NPC Plan 2030)
No subsidies
No government borrowing
No new regulations, in fact deregulation is
required
And best of all:
– Electricity plus People plus Resources enables:
• Clean Economic GROWTH -> more money for govt
• Massive Employment

“Breaking the Code of History”
• Eskom have said (email) that they “will
support private people working together to
look like a big customer to Eskom.” This
customer can be called a Virtual Power
Station.
• For fast growth, an economy needs:
• By David Murrin in “Breaking the Code of History” book
– Population Growth
– Resources
– Electricity
– South Africa has the first two, but the 3rd is
stagnant (c) My Power Station Technology 2013 25

Our Environment: GDP
• World GDP Growth

Our Environment: Wind
In 2011 Capacity Installed: China 18GW; Doubled every year 2005 to 2009;
Total Installed Wind Capacity Worldwide in 2011: 41,000 MW!
World Wide Wind Total Installed Capacity: 238,000 MW (238 GW)

Our Environment
• Photovoltaic (PV) Production

Video
We Live in Exponential Times
• 5 minutes
• http://www.youtube.com/watch?v=lUMf7FW
GdCw
• This exponential growth depends on
exponential availability of inexpensive
electricity
– For reference: watch later

The Virtual Power Station / Plant
• "Virtual power plants represent an ‘Internet of Energy,’" says senior
analyst Peter Asmus of Pike Research. "These systems tap existing grid
networks to tailor electricity supply and demand services for a customer.
VPPs maximize value for both the end user and the distribution utility
using a sophisticated set of software-based systems. They are dynamic,
deliver value in real time, and can react quickly to changing customer load
conditions.”
– http://en.wikipedia.org/wiki/Virtual_power_plant
• Estimated growth $5.2 billion worldwide in 2010 to between $7.4 billion
and $12.7 billion by 2015
• IT + ET = EI (Information Technology + Energy Tech = Energy Internet)
– Thomas Friedman, in Hot, Flat and Crowded (pg 224 onwards)

The Smart Grid
• vs The Dumb Grid
– Doesn’t know what its customers are doing and
when they will need something
– Uses historical information gathering
• The Grid interacts with its stakeholders
– “knows” the future
• Re customers
• Re suppliers
• Re pricing

Systems Thinking
• What exactly is a system? A system is a group
of interacting, interrelated, and
interdependent components that form a
complex and unified whole
– http://www.pegasuscom.com/systems-thinking.html
• We need to consider the big picture, not just
parts of it

Video: A bigger System
• a: Amory Lovins: a new fire (first 5 mins of 27)
– We can watch more later in the day if there is time
– Video available on TED
• http://www.ted.com/talks/amory_lovins_a_50_year_pl
an_for_energy.html

What benefits do big electricity
users get?

What benefits do big electricity
users get?
• Member of Electricity Intensive User Group
• High Level Meetings with Eskom
• Involved in Daily Eskom Scheduling
• Time of Use Tariffs
• ESCO Rebates; Demand Response
• Lower Electricity Charges
• Ability to export energy to the grid (Mondi)
• They are taken seriously by Eskom. They have
power (c) My Power Station Technology 2013 35

How can these benefits be made
available to small / all electricity
users?

How can these benefits be made
available to small / all electricity
users?
• Build a Virtual Power Station
– a cluster of small users which looks like a big
customer to Eskom
• The Nine Dots Model
– Solving the “Reverse Feed Problem”
– EV’s to “soak up” excess production and to
provide electricity at peak time

Virtual Power Station Videos
b: conEdison Smart Grid 5 mins
http://youtu.be/QPWCCz_OTGU
c: GE 8 mins (perhaps later)
http://youtu.be/ztw3aYLX4_U
d: Duke 4 mins
http://youtu.be/E1Jrdt1OV8s

End of Introduction
Beginning of Technologies

Our workshop
• Looking at electricity as the core missing
enabler to get our economy moving
• What tools do we need?
• What types of technologies are available?
• How can benefits that big business get be
made available to small business?

Riaan Smit
@ Wind Energy Conference, Cape Town, Tuesday 29th May 2012
• South Africa needs a
– “New Future Vision”
• Riaan is Chief Engineer in National Planning at Eskom

Thinking Differently
• Should we think differently?
– Do we need cars? How many? What sort? Can
they be shared?
– Do people need to go to work or can they
telework?
– Should our systems stay centralised or can they be
decentralised?
– How would we design the system if there was no
coal or nuclear energy?

Our problems
• Everything going UP
• Government taxing infrastructure instead of
growing the economy and getting money from
taxation
• Infrastructure
– Electricity; water; rates; fuel taxes; transport
– E-tolls; carbon taxes; electricity levies
– Exporting raw materials; importing finished goods
• Bad balance of payments / rand depreciation / inflation

Petrol Price Increases since 2002
Petrol price at pump; Oil = Rand $ in January each year * Brent Crude Converted to litres

Buying and Producing Electricity
Graph in Rand per kwh ex VAT
(c) My Power Station Technology 2013

Government’s Problem
• Get’s large amounts of revenue from
electricity generation
• Electricity makes a loss at peak time
– Eg Ankerlig: R4 to R13 per kWh
– Eg City of Cape Town Peak Demand: 72c (to R2.47)
per kWh + Demand Charge
– Means all Eskom’s rebates are based on removing
peak load so that they can be more profitable
– PV doesn’t fit into this! Or does it?

Ankerlig
• Near Atlantis
• 9 x 150 MW Combined Cycle Turbines
– Can use Diesel or gas; currently diesel
• 25,000 litres of diesel per minute
– X 60 minutes * R12 per litre = R18 million per hour
• R18 million / 1,350,000 MW
• = R13 per kWh!
Photo: ESBi Engineering

What knowledge do you have?
• Technical Terms
• Quick Recap?

This is what a Renewable Energy
System (without batteries) Looks Like …
PV Array
Combiner
Box
Grid Tie Inverter
DB Board
Mains
Utility
[Schematic excludes Grounding Systems; DC & AC Disconnect; Fuses; etc.]
Start here …
The grid is the “battery” (backup)
Eskom say Grid Tie is unsafe because
what if there is load shedding or if the
grid is switched off?

Anti-Islanding
• Used when the grid supply is shut off:
– “Since 1999, the standard for anti-islanding
protection in the United States has been UL 1741,
harmonized with IEEE 1547. Any inverter which is
listed to the UL 1741 standard may be connected
to a utility grid without the need for additional
anti-islanding equipment, anywhere in the United
States or other countries where UL standards are
accepted.”
http://en.wikipedia.org/wiki/Solar_inverter

This is what a Renewable Energy
System (with batteries) Looks Like …
PV Array
Combiner
Box
Solar Charge
Controller
Battery Bank
Inverter / Charger
(Island System)
DB Board
Mains
DB Board
Backup Loads
Utility
[Schematic excludes Grounding Systems; DC & AC Disconnect; Fuses; etc.]
Start here …
Generator

Grid Tie Island Schematic

Battery Only System
Watch Battery System Installation Video
http://www.youtube.com/watch?v=LT1AF4ycAQY

Terminology
• Grid Tie: an electrical system that is connected to the
government electricity grid
• Reverse Feed / Embedded Generation: where someone
besides Eskom sells electricity to the Grid
• Net Metering: where the consumer buys and sells
electricity at the same price
• Feed In Tariff: where the Grid Operator / Utility pays the
“Embedded Generator” a higher rate to feed the grid
• Time of Use Metering: where electricity is bought (and
sold) at different rates depending on grid demand (during off-
peak, standard time, and peak-time, or in the future on a second by second basis)
• Inverter / Grid Tied Inverter: Changes DC to AC electricity
• Island: allows a grid-tie inverter to operate during a power
failure, whilst isolating it from the grid

The Toolset

“Night” and Peak Demand
• Start with “the battery”, the most difficult
component
– Because Eskom doesn’t want us to export energy
– They and the Cities allow “Parallel Feed” which is
essentially what Solar Water Heaters (and heat
pumps) do, except that Solar Water Heaters
remove peak demand. Same for Timers and
Demand Response (DR).

“Night”
• What does it cost to build more generation (to
oversupply) vs how to store and manage
energy?
– Ie over generation vs energy storage
– This might change due to storage costs coming
down, carbon taxes, environmental legislation
– http://www.renewableenergyworld.com/rea/news/article/2013/04/e
nergy-storage-series-why-we-need-it-and-why-we-dont

“Night”?
• For Night and Cloudy Days customers will
need batteries, energy storage, and will need
to import electricity from the Eskom /
Munipalities, preferably at “off peak time”
• We need Behaviour Change (Toolset)
• AND we need Energy Efficiency (Toolset)
• Customers can save up to 77% of their
electricity requirement – and Eskom has incentives for
this

Toolset: EV – Nissan Leaf
• Available for $200 a month in Austin, Texas on
rental
• Battery pack should last 5 to 7 years in Austin
• 4.7km per kWh at R1.50 per kWh or 31 cents
per km in Cape Town
• 14 km per litre for 1.4 litre car at R12.73 per
litre or 91 cents per km
• Nissan Leaf is 1/3rd of the cost to run.
Repayments are about the same per month.
EV = Electric Vehicle (there are also Hybrids)

Toolset: Pumped Storage
a large scale battery
http://www.eskom.co.za/c/article/207/pumped-storage/

Pumped Storage Potential
• Lesotho Highlands
– 3GW Pumped Storage Potential
• USAID Electricity Supply Industry of Lesotho General
Information for Potential Investors report in May 2008
• Palmiet / Steenbras Dam (near Cape Town)
– 2 x 200 MW reversible Francis pump/turbines
• Generator manufactured by Fuji of Japan
• Turbine manufactured by Voith of Germany
– Construction started 1983
– Commissioned 1988

Toolset: Battery
• CSP (Concentrated Solar Power)
• Solar Tower
• Storage:
– In Salt or Sulphur
– Electricity produced in the normal way via steam
and turbines
• From sun during the day, or molten salt at night
• Needs external energy to keep the salt “wet” (liquid)
– Runs for 16 hours a day in Spain, eg 5am to 9pm,
covering the morning and evening peaks in South
Africa (c) My Power Station Technology 2013 62

Solar Towers
http://designbuildsource.com.au/worlds-largest-solar-towers-take-to-the-sun
Abengoa and Brightsource’s Palen Solar Tower Project, California

Toolset: Large Scale Batteries
• XTremePower
– eg 36 MW
• http://www.duke-energy.com/news/releases/2013012301.asp
• Flywheel
• Ultra-capacitors
• Global Key Players
– Generalists: ABB, Alstom, GE, S&C Electric,
Schneider Electric, Siemens
– Purists: A123, BYD, Panasonic, Toshiba, Xtreme
Power, ZBB Technologies, etc
http://zpryme.com/news-room/asian-grid-scale-energy-storage-market-364b-by-2020-zpryme-smart-grid-insights-reports.html

Toolset: Water
• Hydro
– Large Scale and Micro-Hydro
• Tidal
– Eg Siemens 1.2 MW for 1,500 households in
Northern Island
• Wave
• Ocean Currents
– Benguela and Agulhas Currents flowing at up to
3m/s (10km/h), 24 hours a day, 7 days a week
Also: Desalination

Toolset: Biogas
e.g.: GE Jenbacher Gas Engines

Toolset: BioGas
GE Jenbacher
• Landfill gas
– 1 million tons of waste power 1MW plant for
more than 15 years
– Waste from US city of 1 million can power 8MW
plant
• Sewerage
– Waste water from city of half a million powers
1MW plant; 100% of energy needed for the plant!
• BioGas
– 5000 cows can power 1 MW plant

Toolset: Local Storage
• “Municipal Energy Companies”
– Dr Hermann Scheer in The Solar Economy
– Every industrial business is also an energy
business
– Local integration
• Local jobs & a stronger local economy
– Lower costs with decentralised systems
– CHP: Combined Heat and Power, easier because of
local electricity production

Toolset: “Summer time”
• Windhoek 1 sun hour West of Durban. Could
build Solar Tower and PV plants there to
provide energy to Durban for the evening
peak.
• World's largest solar towers being built: 2 at 250 MW each in
the Californian Desert. Currently the largest tower is in Abu
Dhabi and it is 100 MW. The new design uses 50% less water
and 13% less land for a similar Solar Tower plant, and 33% less
land than a PV plant. Solar Towers also provide for energy
storage and already run for 16 hours a day in Spain.

Toolset: Behaviour Change

Toolset: Energy Efficiency
• Examples
• Calculations

Energy Efficiency Examples
• Energy Efficiency is all about not using or
needing electricity in the first place
• Eg:
– Electricity Meter
– Insulation
• Ceiling, window, pool cover
– Heating / Cooling
• Solar Water Heater; Ice Cooler
– Energy Efficient Appliances

Simple Electricity Meter

NegaWatts, not MegaWatts
PV = Photovoltaic System
EE = Energy Efficiency: Spend to save
ER = Eskom ESCO Rebate (approximate)
Price Per Total Monthly
%tage watts watt Price Repayments kwh price per kwh Inc VAT
PV 100% 8,000 R20.00 R160,000.00 R1,600.00 1,200 R1.33 R1.52
EE 0% 8,000 R20.00 R0.00
PV 30% 8,000 R20.00 R48,000.00
EE 70% 8,000 R12.00 R67,200.00
R115,200.00 R1,152.00 1,200 R0.96 R1.09
ER R290.00
R862.00 1,200 R0.72 R0.82
NegaWatts = Negative Watts

RE Example and Effect of EE
Figures as at July 2011
House Loads 1200 kwh/month Ball Park Number for Grid Tie Rand per kwh
Peak Average Sun Hours 5 h with Battery Backup R 60.00 R 1.06
Estimated W installed 7890 Electricity Cost pa R 15,264.00
Estimated Rand Value R 473,424.66 kwh/pa 14400
New Electricity Use Efficiency Electrical
Cost Saving Equipment Savings Water Savings Savings pa
Awareness R 899.00 15% R 71,013.70 pa R 2,289.60
Insulation - roof / ceiling R 3,000.00 10% R 47,342.47 R 1,526.40
Insulation - pool cover R 36,000.00 7% R 30,772.60 R 1,869.60 R 992.16
Pool Pumps R 3,000.00 10% R 46,800.00 R 1,508.91
Fridge R 5,000.00 4% R 16,800.00 R 541.66
SWH R 30,000.00 25% R 118,356.16 R 3,816.00
Gas cooking
Totals R 77,899.00 70% R 331,084.93 R 10,674.73
New Rands New W Rqd
New Estimate 473-331k+78k R 220,238.73 R 142,339.73 2372.3
New pool cover every 5 years; Pool Size: 50 sq m; Roof Size: 100 sq m; Elec savings higher if inflation included
Inverters life expectancy is 15 yrs. Replacement Not included.
Gas Cooking: probably no savings, but reduces peak electricity demand.
Battery Inefficiency = 20%; Grid Tie Inefficiency = 6%. R60 per watt incl inefficiencies. For 20 years
20kl Water Usage for Pool Per Month for 6 Months @ R15.58 R 1,869.60 R 37,392.00

Haven’t taken into account
• Potential sales to the City of Cape Town
• Net Metering through the transformer
• Retail Wheeling
• Time of Use Tariffs
• Carbon Credits
• Eskom ESCO rebate
• DR (Demand Response)

Toolset: Time of Use Tariffs
• Give the member of the Virtual Power Station
the opportunity to get paid to move their
loads outside Peak Time
• The member also gets the opportunity to sell
electricity at peak time
– We’ll see this when we discuss Net Metering

Cape Town Time of Use Tariffs

Cape Town Residential Stepped Tariffs
http://www.capetown.gov.za/en/electricity/Pages/ElectricityTariffs.aspx

Toolset: Computers
• Computers and the Internet
• Allowing the move:
– ET + IT = EI
– Energy Technology
– Internet Technology
– The Energy Internet
• Eg: Homeowner tells the utility that she needs the oven
for 1 hour during the day
• Work Smart

Computers: The ISP Model
• The Backbone
– Telkom, BCX, Internet Solutions
– Sells to ISPs
• The ISP: Internet Services Provider
– Sells to the public
• A relatively small number of backbone
suppliers
• A large number of public users

The ESP Model
• ESP = Electricity Services Provider
• Based on the ISP model
• Other examples:
– Railway grid in Europe
– Aviation grids
– Telecommunications grid
– All shared. Paid for by whom?
• Capex payments
• Utilisation payments
ISMO: Independent System
and Market Operator
= electricity middleman
1998 Electricity White Paper
re ISMO & Competition
2003 RE White Paper
re Competition
ISMO Bill Update in Business Report on 27th March 2013:
http://www.iol.co.za/business/business-news/new-electricity-middleman-nears-lift-off-as-ismo-bill-is-finalised-1.1492346#.UVlfEGnlw9B

Smart Metering and Control

Measure - SMART energy
"If you can not measure it, you can not improve
it.", Lord Kelvin

What your electricity measurement
should do
• Real time reporting
• Onboard reporting
• Long term data collection
• RS-232 communication to
database via GSM, Wifi or
Ethernet modules
• SMART control for geyser
heating and pool pumps
• Load shifting and DR
• SMART geyser element
management

ESCO Rebates

ESCO Rebates
• Standard Product (specific products)
– Lighting
– Solar Water Heater (homes)
– Showerheads
– Timers
• Standard Offer (projects)
– 70c per kWh deemed rebate for SWH
– R1.20 per kWh for first 10MW of NM PV
– Eskom IDM Web Site
• Other (c) My Power Station Technology 2013 88

Demand Response
• http://www.eskomidm.co.za/demand-
response
• It is a dynamic energy infrastructure management programme designed to
support the stability of the national electricity grid, and meet South
Africa’s growing demand for energy with the assistance of large and very
large energy users – in both the industrial and commercial sectors – who
agree to switch off certain production processes or turn down certain
electrical loads during periods of peak demand.

Demand Response
• Demand Response is a highly flexible programme that can be customized
to the individual financial and energy usage objectives of participating
companies. The programme offers:
– Energy and capacity incentive payments;
– Seamless business continuity;
– Information on energy cost reduction; and
– Recognition for supporting the national grid and, therefore, the stability of electricity
supply to South Africa and its people.
• Utilising ground breaking software, hardware and support services that
reduce the demand for energy of participating companies, Demand
Response allows large and very large energy users to participate for free
and, most importantly, without operational interruptions.

Demand Response
• Eskom pays customers to reduce load on
instruction to balance supply and demand
• 3 types
– 1 second notice: up to 10 mins
– 10 min notice: up to half an hour
– 30 min notice: up to 2 hours
• Needs “Aggregator” & Customer Services Provider
• Eskom pays for measuring and other
equipment plus monthly fees
• Eskom looking for 500 MW short term and 2
GW long term (c) My Power Station Technology 2013 91

Some Eskom DR / ESCO Rebates
• ESCO Incentives
– 42 cents per kwh for reducing electricity at peak
time
– 10 cents per kwh for reducing electricity at off-
peak time
– 70 cents per kwh for water heating
– For customers with more than 100 kW to save
– Note that I am unsure what the latest numbers
are for these rebates (as at 3rd April 2013)

Demand Response

Homeowner DR
• Is it possible?
• How?
• TOU and DR
• PV and DR
• Taking DR to the people

My Suggestion for the VPS DR
• Standard Time Rate: R1.50 per kWh
• Peak Time Rate: R3.00 per kWh
• Off Peak Rate: 20 cents to 75 cents per kWh
• Prices including VAT
• And
• Using Net Metering
– Incentivises people to minimise use at peak time
and to try to sell at peak time.

Homeowner VPS DR
• ESCO Rebate
– 53 cents per kwh for reducing electricity at peak
time
– 10 cents per kwh for reducing electricity at off-
peak time
• Homeowner assumption

Carbon Credits

Carbon Credits
• Electricity Producer in “developing” country
earns carbon credits
• Paid for by polluter in “developed” country
• ETFs (Exchange Traded Funds)
– Allows one to trade Carbon Credits

Net Metering (NEM)
• Normal
– Buy and sell at the same rate, eg R1.50 per kWh
– Bank excess electricity used during the day
– Buy back at night
• Other
– 1: Buy at the normal rate; Sell at a lower rate
• In South Africa, this would get NEM going
– 2: Sell at the normal rate; Buy at a higher rate
• Great for users who can make more electricity than
they need.
The Jargon: http://www.thegreentimes.co.za/stories/energy/item/1130-net-metering-buzz-words

Net Metering (NEM)
• Avoided Costs
• Incl: the sum of all costs that the utility avoids as a result of customer generation to the grid,
including: energy purchases; generation capacity or resource adequacy; line losses;
transmission and distribution capacity; air pollution permits and offsets; ancillary services;
renewable energy purchases (E3, Net Metering Cost-Effectiveness Evaluation, Jan 2000,
California Public Utilities Commission)
• Facilities Private Investment
• If we are at Grid Parity it makes sense
• Facilitates Job Growth which in the USA is 10x
faster than the economy as a whole; 75% are
installation Jobs which are local and cannot be
exported

Countries with Net Metering
• 13 Countries + 42 USA States
• More than 20 years experience
– Were already running in 1991
• Government’s White Paper on RE – Nov 2003
– “Government is committed to the introduction of
greater levels of competition in electricity markets
– The production and distribution of energy should
be sustainable and lead to an improvement in
standard of living of citizens
– Barriers to entry should be lowered”

The Grid
From Eskom Annual
Report 2009

Quick Summary
• We can do all of this without residential and
other end user PV
• Although we should allow the utility to buy
energy at peak time, eg from battery backup
and/or EV’s and/or generators, etc
• And the utility and municipality should make
TOU tariffs available to small users

Renewable Energies
• Solar: SWH, PV, CSP, Solar Tower. + with storage
• Water: ocean, tidal, river, wave, pumped storage
• Other: Wind, Geo-thermal, Biogas, Sewerage to Gas
• Storage: battery, fuel-cell, water, salt, Sulphur, Hydrogen
• Non-renewable: coal, oil, gas, nuclear
Riverside Renewable Energy
Holt Logistics
Gloucester Marine Terminal
New Jersey, USA
• 9MW Roof Top PV
• $42m
• ~ 110,000 square meters
• 80% of energy requirement

What is PV?
Photovoltaic Panels

Can we produce electricity cheaper
than we can buy it?
Whiteboard / Word
• Assumptions:
– City of Cape Town
– Borrowing at 10% interest rate over 20 years
– Rooftop PV Systems
– 3 bedroom, 4 person household using 1,200 kwh per month
• Homeowner
– R1.29 per kwh 16% R1.50
• Business owner
– R1.02 per kwh 16% R1.18 + 1 cent (additional) levy + R120 per
ton carbon tax, ie 12 cents per kwh R1.31 28%
• More Info: R1,800; R182,400; 8 KW; R22.80; R182,400; R20 per watt?
How?

The real savings in being energy
independent (kw vs kwh)
• If you spend R1m a year on electricity
• And you can install your own system for
R900,000 per year
• What would you prefer?
• If you buy your own system, then at 10% per
annum over 20 years, the R900,000 equates to
a capital cost of R7.5M

The Cherry on Top
• Once you’ve paid off the system, it is YOURS
• Your electricity cost doesn’t increase every
year …
☞ … which means that you can plan for the future!
• And: you can save 70%+ of your electricity
cost over 20 years

Fix your price and save

Discussion

Trust & Expectations
• Can we rely on the system?
• Should we rely on the system?
• What is “the system”?
• Customers expect
– The system to be up
– Maybe we expect “load shedding” because of
what happened in 2008
– Many private people and businesses installed
generators to give themselves security of supply

Opportunity to sell electricity
• To Cities, Eskom, other users
• Especially at peak time
– Average electricity cost to City of Cape Town is 55
cents per kwh
– E.g.: Ankerlig near Atlantis produces 1,350 MW,
uses 25,000 litres of diesel per minute, at a cost of
between R4 and R13 per kwh
– So, we can produce at R1.32 per kwh and sell at
R3 per kwh!

How to get started?
• “Mandelaton” CID
– Community Improvement District
• Milnerton Proper; Woodbridge Island; Lagoon Beach; Joe Slovo /
Phoenix; Sunset Beach
• Measure: 2,000 meters * R6,000 each installed
– Incl, Voltage, Current, Peak Demand,
– Can tell what’s running by looking at “profiles”
– Can control Geyser
– Can switch loads on and off (DSM and rebates)
– Is Wireless, so user needs internet connection
• Design, Finance, Implement, Insure, Maintain

Mandelaton CES

VPS Mandelaton Prezi
http://prezi.com/p0j3paibfy6j/echo-
2/?auth_key=20848266276fdb23f7d16535f3ceb50b9136f3f0&kw=view-p0j3paibfy6j&rc=ref-
15959272

Discussion

Social and Technical Factors

Social and Technical Factors
• Social
– “Belief”
– “Myth”
• Technical
– Prices are dropping 10 to 20% per annum
– Energy Storage is possible; cheaper than running
peaking power stations
– RE allows non-degreed installation and
maintenance personnel, appropriate for RSA

Energy Literacy
• How literate are South Africans about their
energy choices?
• The USA has
http://www1.eere.energy.gov/education/ener
gy_literacy.html and http://www.need.org/

Do we know the risks & costs?
• Of Fossil Fuel Energy
– No, even after 150 years of building power
stations
– Kusile and Medupi: budgetted to cost R79 billion
for 4.8 GW each; now R125 billion each and rising
– Coal and other fossil fuel costs rising faster than
expected
• Of Renewable Energy
– Yes, and they are decreasing

The Risks
• Mainly our 20th Century assumptions
• Compare wind and nuclear risks
• Donor assistance risks

Assumptions
• Our economy has an assumption built into it
– Cheap and reliable Electricity ??
• But 150% increase over the past 5 years
– Cheap build ??
• But R79 bn quote: R125 bn now; 12 months behind schedule
– Cheap raw materials ??
– Reliable Distribution Systems ??
• Transformer life: was 35 years -> now 12.5 years
• Decreasing Costs works for IT ✔
– Lets find out if it can work for electricity?
• How risky are our assumptions?

Riskscontinued
• Environmental Risks
– Water, health, pollution, jobs, GDP growth
• Security of Supply
– Coal, oil, nuclear: Wind, sun:
• Cost of Supply
– Coal, oil, nuclear: Wind, Sun:
• The Cost of Unserved Energy
– Energy Security; what is the cost of being out of action?
• For a business; for a homeowner who doesn’t know they are off?
– R75 per kWh
• Nuclear Waste Management

Risks
IRP2010 v8 (nothing re PV; nothing re Net Metering)
Cheap?
Reliable?

Risks: The “Nuclear Fleet” Cost
• 9.6 GW
• What’s it going
to cost?
• With such widely
varying costs, would
you do this project?
• Can we remove
9.6 GW from the
grid at peak /
any time?
• How? (c) My Power Station Technology 2013 126

Risk of “old thinking”
• South Africa might miss out on the 21st
Century “Gold Rush”

Risks Section – New Build

World Energy Growth Rates by Source
Percent Annual Average Growth

Solar Insolation Map
Germany: 2.4 ave peak sun hours per day; SA 5.9 (5 after derate factor)

Risks Section - Wind Power
http://www.earth-policy.org/data_highlights/2013/highlights37

Risk Section – Chinese Wind vs
Nuclear Generation

Risk Thinking – Chinese Wind
Power Potential

The Big Energy Myth
• From Dr Hermann Scheer’s Book
– “The Solar Economy” pp 169 to 170
– “Once the fear of the small scale has been dispelled,
once RE has demonstrated that it can replace fossil
energy in its entirety, then the aura of the centralised
nuclear/fossil industry will quickly fade. While fossil
mythology remains unchallenged, humanity is faced
with the absurd prospect of choosing death over a
solution it is afraid to embrace. … Ordinary people are
caught up in the myth of big technology … We need
an active and engaged society”

Seven Crises(video)
- caused by our energy system
• Climate crisis
• Fossil fuel availability crisis
• Social (3rd World) crisis
• Health crisis
• Nuclear crisis
• Water crisis
• Food (agricultural) crisis
Dr Hermann Scheer, Member of the German Government, President of EUROSOLAR,
General Chairman World Council for Renewable Energy (WCRE)
Photo: “For Work and Environment”, from Dr Scheer’s Facebook Page.

Show Dr Scheer Video
http://youtu.be/w_KZ01ps6gI

Crises / Risks of the Fossilised Fuel Industry
Dr Scheer at Retech Conference, February 2009, Las Vegas, USA
• [3rd world]:
– 40 countries are unable to pay their energy bill
– Their oil import bill is more than their total export
earnings
• COP 17 and global treaties
– How do we organise the technological revolution?
– Which technological revolution happened as a
result of a global treaty? Not One!
• We should do it because it is an advantage of
us

The [3rd world]
My brackets ([])
• The so called “third world” is where the new
empires are starting
– Where development is happening
• The “third world”
– Has population growth
– Has resources
• Most of the Developed World is stagnating
– Has growth potential
• The Developed (1st) world
– Stuck in an old paradigm?

The “Downturn”
• Is it possible that we’re creating it ourselves?
– By focusing on cost savings instead of growth?
• Just something to think about
– I’m not saying we’ve created our recession, but I
wonder if its in our minds, as a self-fulfilling
prophesy
– Also in South Africa:
• One has to do the same thing over and over again
• A huge waste of resources, time and energy

What’s electricity for anyway?
• It’s like ICT, except ICT depends on Electricity
• It’s an enabler to get the country moving
• Fast, cheap, reliable pathways from a to b will
get our economy going
– Communications (Infrastructure)
– Electricity, Population Growth, Resources
• David Murrin: “Breaking the Code of History”
• Can the “Energy Internet” finally happen?
– Thomas Friedman in “Hot, Flat and Crowded”

Donor Assistance Risks (DAR)
BRICS Dev Bank?
• What are the risks?
– Dependence on outside funding
– If the exchange rate weakens, repayments get
higher
– Little capacity building
– An expected “repayment” for donor assistance
• What chance is there that we can build our
future infrastructure needs without DAR?

Some of the Rules
• See application Form – Embedded Generation for
City of Cape Town’s rules

Government and Citizens
• Is making our own electricity legal?
• “Embedded Energy” Generation Legislation
Already Exists
• SABS: NRS 097-01-2010 (December, 2010)
• NERSA: Embedded Generation (2011)
• Waiting for:
– Eskom adoption
– City adoption
– Business and Homeowner adoption

Red Tape
• City of Cape Town
– Red Tape to Red Carpet Process
• South Africa
– 15 laws; 10 standards; 10 documents
– Just for “parallel feed”!
• USA
– 2 laws; 3 standards; 1 document
• Germany
– Install; inspect; FITs 8 days later

How to convince Govt
of The Five Winners?
• The Five Winners http://youtu.be/I7W6kn9M8pI
– Customers
• eg the homeowner (electricity generator & consumer)
• Eg the business owner (and employees)
– Suppliers
• Installers; Designers; Maintenance People; Call Centres;
Inspectors; Manufacturers
– Cities
– Eskom
– The Environment
• Fast economic growth. “Base Load” can’t keep up!

Reaching Grid Parity

Reaching Grid Parity
• Feed in Tariffs and their purpose
• Rebates and their purpose
• Net Metering

Why FITs? Why any kind of incentive?
• Introduced in Germany in 1991
– In 1993, the FIT was $1.34 per kWh
– In 1993 Rands, this was R4.57 per kWh
– In 2012 Rands, this was R11.32 per kWh
– In 2001 in South Africa:
• Per kWh: Domestic 24.59c; Manu and Mining 12.32c
• The FIT had three principles
– The Utility must connect anyone to the grid
– They must buy all the energy that is produced
– They must buy at a fixed price for the length of the
contract, ie 15 to 20 years

So what did FITs do?
• Brought down the cost of Renewable Energy
• Note that the FIT contract is similar to the
contract the government signs with Eskom to
build a power station
– An agreement to buy a certain amount of
electricity
– At a certain price
– For a certain period of time
• There are “FITs” in our car production system
– Government gives R5 billion of incentives to car companies annually
– The Joule needed R9.5 billion. And South Africa would have had its
own electrical car!

What do Rebates do?
• Kickstarted Renewable Energy
• Benchmark: 30%
– A utility’s “avoided cost”
• Germany: 50%
– Higher incentive
• Different kinds
– Rebate
– Tax Credit

EQUALITY
• How did we get to Equality (Grid Parity)?
• Who helped?
– Germany (G): Feed In Tariffs since 1991
– Still the largest installed base of PV panels (roof
top, building integrated, farm, etc)
– 370,000 people employed in RE in G in 2010
– Targeted 20% RE by 2020
• Achieved this in 2011!
• Now targeting 35% by 2020
• Solved the “Grid Destabilisation” problem in 2011

Retail Wheeling

Retail Wheeling
• Selling electricity across the grid
• Similar to
– Airways
– Railways
– Telecommunications
• Pay the Grid Operator a Wheeling Tariff for
using the grid
• Needs an Independent System Operator?

Next Steps
• Contact me for training, consulting and to set
up Virtual Power Stations
• Contact me for Financial ICT Solutions

Contacts
• David Lipschitz, My Power Station
– Phone
• 021 551 9935 (W); 074 119 3246 (C)
– Email
• david@mypowerstation.biz
– Web
• http://www.mypowerstation.biz

• End of presentation
• The rest is for reference

Virtual Power Station Agenda
• See hand out
• I’d like us to brainstorm and develop a solution
• We will consider:
– Systems Thinking
– What benefits do big electricity users get?
– How can these benefits be made available to small
/ all electricity users?
– Reaching Grid Parity – how did we get here
– Feed In Tariffs and their purpose

Agenda continued
– Rebates and their purpose
– Net Metering
– Time of Use Tariffs
– Demand Response
– Energy Efficiency
– Smart Metering
– Social Factors
– Technical Factors

Agenda Continued
– Types of technologies that can be used in a Virtual
Power Station
• Photovoltaic Systems; Concentrated Solar Power; CSP
Tower; BioGas
• Pumped Storage
• Battery, ultra-capacitors, hydrogen storage, fuel-cell
– Dealing with peak demand
– What about rainy days and night?
– Government’s role. NRS 097-2-1:2010 and NERSA.
Embedded Generation and its Rules. Laws, Policy.

Agenda
• Electricity Generation; Assumptions & Risks
• Electricity and Infrastructure Challenges
• Some Questions & Myths
• Our Environment
– We live in Exponential Times
• Electricity & “The Grid”
– Can we rely on The Grid?
– Can we make electricity ourselves cost effectively?
• How to get started?
• Q&A (c) My Power Station Technology 2013 160

The Numbers
• How to understand the really big numbers?
• Should we think differently?
– Do we need cars? How many? What sort? Can
they be shared?
– Do people need to go to work or can they
telework?
– Should our systems stay centralised or can they be
decentralised
– How would we design the system if there was no
coal or nuclear energy?

R2.3 trillion
R2,300,000,000,000
• Repayments
– At 10% over 20 years
– R23,000,000,000 per month
• R23 billion per month is what the people of South
Africa will be paying for their new electricity fleet if we
follow the old 20th Century technology path
– 50 million people; 7 million taxpayers
• R3,285 per taxpayer per month
– for capex repayments only

R125 billion for Kusile
R125,000,000,000
• 12,500,000 * R10,000 Solar Water Heaters
– i.e. : 12.5 million R10,000 Solar Water Heaters
• Kusile
– 4.8GW
– 12,500,000 SWH need 20 GW of electricity
• SWH can be used to
– Heat water & air
– Cool water & air
– R46 billion (58%) over budget already

Electricity Challenges
• For City Dwellers without electricity, NO:
– Water, Banking, Petrol, Transport, Food, Life
– Only 4 days of food in the supply chain
• Everything we do depends on electricity
– We need security of supply
– We need price certainty
• Therefore we need a game plan to make this a
reality

Some Questions
• http://www.surveymonkey.com/s/NetMeterin
g-2012-12-22
• If you could make your own electricity
cheaper than you could buy it, would you
want to do this?
• Do you know what Net Metering is?
• Do you want to make money and conserve the environment?

Global Energy Resources
30 TWH in 2030
10 TWH in 1990
The sun
provides
5,000 times
the amount
of energy
required by
the entire
planet

How long do we have?
At 3% electricity consumption growth

Buying and Selling Electricity
• Normally
– We buy electricity
• From Eskom
• From the Cities, who buy from Eskom
• Now
– We can produce electricity
• We can use it ourselves
• We can sell it to The Grid
• We can sell it to our own customers!

Producing Electricity (Energy) 1
• History
– Before Electricity
• Windmills; Pumps; Water-Mills; Steam
– “Base Load” (after electricity “invented”)
• Coal, Nuclear, Hydro-electric (3)
– Now
• Sun, wind, river, tide, ocean-current, geo-thermal (6)
• Sun: PV, CSP, Tower, Solar Water Heating (+3)
– PV = Photovoltaics (like the leaves of a tree)
– CSP = Concentrated Solar Power (with or without storage)

Producing Electricity (Energy) 2
• History
– Benefits and Costs
• Base load electrical systems dramatically reduced our
costs and allowed the industrial revolution to happen
• But this assumed unlimited, cheap, supply of
equipment and raw materials (coal, etc)
• But: population growth and industrial growth have put
huge constraints on the systems
• And: at the same time, maintenance costs have been
rising rapidly for power stations, transmission and
distribution systems

Reliability of equipment
• What happens when there is a problem?
• Disruption in power supply
– Unplanned and prolonged downtimes
– Destruction of equipment
– Sudden cut offs
• No proper shutdowns
• Customer dissatisfaction/frustration
Uni of Joburg talk at Transformer and SwitchGear Conference
Joburg April 2012

David Lipschitz
• BSc (Honours) MBA
• My Power Station Technology: Energy Expert, Software Developer
• Grid-Tied Photovoltaics Course: Feb 2009, Phoenix, AZ, USA
• NABCEP Level 1 Certification
– North American Board of Certified Energy Practitioners
• Additional related technical training
• Spoke / Chaired Energy Efficiency conference 2010
• Spoke at Various other Energy Conferences
• Presented in Parliament re. Climate Change Hearings
• Presented to Parliament re. IRP2010 Hearings
• Presented at Powering Africa Strategy Summit in November 2011
• Contact Details:
– 021 551 9935 (Office)
– 074 119 3246 (Cell/Mobile/iPhone)
– david@mypowerstation.biz
– Mypowerstation (Skype)
– http://www.linkedin.com/in/davidlipschitz (LinkedIn)

Designs
• We charge R6,800 plus VAT for a design for a private houses and for systems up to
10KW. Above 10 KW we charge R50,000 plus VAT, excludes EIAs, Engineering or
Architect Fees.
• Why we charge for designs?
– A design includes a site visit, a formal design with a parts list, an Efergy electricity meter so that
the client can become aware of their electricity use and reduce it, and an energy efficiency
exercise
– If the client buys a system from us and the value of the system is over R80,000, we discount their
installed price by the fee.
– This is fair as the design requires experience and designs in IT, Architecture, etc, aren’t free.
Designs can take up to 3 days. All prices and equipment needs to be checked. If we do 10 designs
and then someone buys from us, we need to constantly increase the prices of the systems to
recover our sales cost investment; this means that we either go out of business or run at a loss,
which isn’t in our or our clients bests interests
– We need to recover our investment of over R4 million so far in ensuring that we install systems
that meet electricity needs, are properly grounded, cable sizes are correct, the proper circuit
breakers and fuses are used, etc. At the moment we follow the USA NEC article 690 RE guidelines
as far as possible as there aren’t guidelines in South Africa, although there are DC guidelines.
– Update November 2011: NERSA have published RFD Embedded Generation which refers to NRS
097-2-1:2010 (Grid Interconnection Of Embedded Generation). We are now waiting for
implementation by Eskom and the Cities.

Research

Do wind turbines kill birds?

Bibliography - Mindmaps
• Renewables and Sustainability Mindmap by David
Lipschitz:
https://www.mindmeister.com/maps/show/13046747
• Domestic Energy Independence by David Lipschitz:
• Living Without Grids – a survival mechanism by David
Lipschitz:

Project Video and Example
• Gecko Rock
– Specification:
http://mypowerstation.co.za/2010/09/16/my-
power-station-completes-installation-of-power-
station-at-gecko-rock-press-release-16th-
september-2010/
– Video:
http://www.youtube.com/watch?v=LT1AF4ycAQY

Other Resources
• Total Installed Electricity Capacity Worldwide:
http://www.steamtablesonline.com/electricity
/electricity-installed-capacity.aspx
• Eco Economy Indicators: http://www.earth-
policy.org
• Insolation Map: http://www.earth-
policy.org/indicators/C49/wind_power_2012

Other Resources
• Books
– Hot, Flat and Crowded by Thomas Friedman
• 2008
– Bending the Curve by Robert Zipplies
• 2008
– Screw Business as Usual by Richard Branson
• 2011
– Breaking the Code of History by David Murrin
• 2010

Country Production Graphs
• Germany
– http://www.agora-
energiewende.de/service/aktuelle-
stromdaten/stromerzeugung-und-verbrauch/
• Portugal
– http://www.centrodeinformacao.ren.pt/PT/Inform
acaoExploracao/Paginas/EstatisticaDiariaDiagrama
.aspx

Germany Net Exporter of
Electricity
• http://www.pv-
magazine.com/news/details/beitrag/germany-
-power-exporter-even-with-fewer-nuclear-
plants_100010756

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