This document provides a summary of the PowerGen 2015 conference, including: 1) Discussions covered a wide range of topics related to electricity supply in Africa and South Africa, such as transmission infrastructure challenges, enabling private investment, and opportunities for distributed generation. 2) Key challenges mentioned include limited transmission grid capacity, low local community income generation from projects, and the focus on large centralized mega-projects over micro-grids. 3) Solutions proposed encompass embracing new technologies and competitors, ensuring intergovernmental agreements are maintained, and recognizing the potential of micro-grids and distributed generation to expand energy access.

1. PowerGen 2015
David Lipschitz
15 to 17 July 2015
Start here. E&OE.
People
Septimus van
den Linden
Gas Engines, USA
Chris Yelland
Close the Al smelters
No VAT
Little PAYE
No local profits
No
downstream
activity!
10% of SA's power
Out of date contracts
SAIEE
Chris Crone
Malcolm Folkes
Mr Cary
Eskom
Riaan Smit
Jonathan Nye
Erongo RED
Amy Nash
Research
McKinsey
US$ 490 bil for generation
US$ 360 for
transmission &
distribution
Plenary Keynote
Mr Jacob Mbile, DOE
New IEP
IRP 2010
Expediting
Private Coal &
cogen & gas
Procurement program, which
responsive to local demand &
supply changes
Grand Inca
agreement
ratified
Commercial
negotiations now
13 GW to SA
A treaty
Skills, jobs (in
construction)
Energy Statistics,
detailed at User
Retrofitting
public buildings
Shifting demand from
electricity to gas
NEES
National Energy
Efficiency Strategy
Reducing waste &
reducing energy intensity
62c and 79c for wind
& PV (grid tie)
Biggest Problems
Limited
transmission grid
capacity
Low local community
income generation
Nigel Blakeby
Mr Brian Molefe
Mr Sicelo Xulu
MD of City Power Energy
A sector in
transformation
We need to survive it
Investment
We need a bigger
energy mix
Prosumers
Empowered customers
How do utilities interact with their
customers in this environment?
Digitisation
Eg Smart Grid
Big Data
Analytics
For
Business
Customer Service
Reduce outages
Performance
Planning
Searching for the
Relevant data
A new driver &
pressure in our
business
New competitors Eg IPPs
They must be embraced, not
seen as destructive forces
Aging workforce
Requires up-skilling in
younger people
Key trends
2.1% economic
growth worldwide
4.2% world wide
Investment
US$1.8 trillion
In Africa to
achieve 4%
growth
US$23.3 trillion world wide by 2040
Smart metering 9.4%
growth CAGR
Energy mix is
changing
41% coal reduced
to 21% by 2040
RE 21% to 33%
But fossil fuels still the
lions share for decades
Engineering News
Main topics
Plenary Panel
The challenges facing the Electricity
Supply Industry in Africa
Nelisiwe Mugubane
Institutional memory
Grid constraints
How to plan so that our power
supply is what we need Interaction
between
countries
Eg
Distribution
Network
How to bring centralized
power to the consumer?
But Utilities must embrace
distributed generation
Corridors where to
transport this energy
"Give the risk to the people best
able to manage it". Ie IPPs!
[what about
solar leasing?]
We must make sure that
intergovernmental agreements
are (sustained) maintained
Monitoring &
evaluation
Dr Willem de Beer
SANEDI
Taylor Ruggles
Department of State, USA
Obama's Power
Africa program
Local finance & infrastructure is a
challenge when trying to bring
electricity to 600 mil Africans
How to reduce
project risk
Takes a transaction
based approach
Project by project
Finance
Policy
Enabling environment for
private investment
Cost reflective tariffs
Having a
relevant off
taker
Strong legal &
regulatory
frameworks
Interconnections
To neighbors so that you
can trade electricity
Arnaud de Limburger
EPC
Operates IPPs
Develop, Build,
Operate: to reduce risk
An investor's
perspective
Governance
Relinquishing
sovereignty
Because of huge financial backing
from outside countries
[Eg in Greece today]
Reynolds Beks
Dagogo-Jack
Hydro power Especially small
hydro in Africa
Tax incentives not
available in micro-hydro
Especially because of capital
intensive nature of the projects
For stabilizing the grid if connected to
the main transmission lines
Time to get permits
Not co-ordinated single point of
contact in many governments
Lack of skills
Political will
Stable regulations
For a conducive, enabling,
predictable, environment
Soft infrastructure
Are the conditions precedent in place to
make sure power can be wheeled across the
grids and across borders?
Agreements
Technical
Regulatory
For power to flow
Wheeling charges
Power Pool
agreements
To regulate the
trade of electricity
Efficient markets
Rwanda
Jacob Mblele
The biggest challenge is the
focus on mega-projects
Big distances!
DOE
The solution is in micro-grids &
distributed generation
IPPs:
What about rooftop?
Aggregated demand with an
integrated & co-ordinated
need across Africa
Are IPPs the fastest way of
getting energy onto the grid?
Can we have low cost &
reliable energy in Africa?
Nelly: it must be high cost
to get it to be reliable
Taylor: we must put
up prices first
Jacob: it doesn't need
to be expensive!
How do we get regional
networks working? And what
about an Africa wide grid?
Questions
LocalisationEspecially know how
Me
Building vs maintaining the
machine & what is the machine
for? 8,000 jobs vs 1 mil jobs
Key Challenges & Opportunities
City Power
Mr Sicelo Xulu
A local list
Theft
Load shedding
Economic downturn &
increasing elec costs
Skills &
service
delivery
Illegal connections
Infrastructure &
development
affordabilityNEM, etc
Whilst we are trying to build a new
innovative system, there are a whole
bunch of disruptive technologies
Utilities must turn disruptive
technologies into opportunities
A global list
Electricity
growth 2/3 by
2040
DR & home energy mgt
EG and
Embedded
Storage
Big Data
Improve investor relations &
investor confidence
Gas Engine
Gas Turbine Technologies
panel discussion
PowerPhase
Makes turbine 20%
more efficient
Brian Foley
Can run a 2 MW
standby or black start
Loses power at higher
temperature and humidity
Alstom
Matt Hiddemann
Energy market needs
Siemens & GE
Siemens Frank Richter
GE
Robert Colwell
Chaired by Septimus van der Linden
Startup times
Hot
After running overnight
Warm
After weekend
ColdAfter 2 week
maintenance
Fast
Ramp rate
Required for
renewables
But maybe
emissions
problems
Ramp rate
Jargon
Wobble Index
What is your turn down whilst
meeting emissions?
35% to 45%
Siemens can operate at 5%, but then
not emissions compliant
Gasify methanol
for example
As an input to a
gas engine
Strategy
Energy Planning
Transitioning the Power System
Panel Discussion
Regional power market Preconditions
National control
is required
Customer will have a
choice of supplier
There will be a retailer in the
market of the future
Missing capacity
SA 33 out of 42 GW,
but what about 48
SAPP built 14 GW in the past 10
years, but wants to build 24 GW
in the next 10 years
Need to create
various markets
Financial
NEM & DR & TOU &
Storage costs
Especially for EG
Wheeling
Power pools in Africa
SAPP
COMELEC
Etc
Speakers
Eng Musara Beta SAPP Chief Market Analyst
Matthew Ultimo
Rodin Consulting
Mthunzi Luthuli
Chairman of panel discussion
We should
use our coal
Professor Philip Lloyd
Rodin Consulting
Looking at the
Urban Scale
100 to 500 units
Prosumers
Much greater awareness of EE and
production requirements
Population growth of 2.5%;
Urbanisation at 4%
Australia
1 million houses achieved in 5
years; 10% penetration
Cost of capital
If we had COC like Germany,
capex costs would halve
Examples
Hudson Yards
70% of base
load supply
Freiburg
Higashimata Japan
Garden City, Nairobi
TsumkweMenlyn Maine; Black
River Park: SA
Accra
26 hectares
Why isn't it
happening?Ownership
Matthew Ulterino
"Real estate is central to
the energy transition"
New technology -
development
[Grubb Curve]
Eg battery vs diesel
Low / high capex vs
High / low ops cost
Requires a financial innovation in the
selling / financing model
Cell phone
sales analogy It's like a PPAEvery time PV production doubles,
PV prices come down 22%
Technology disruption Battery R6
per kWh now
House R2.14 Generator R5 House PV R1.50
A system with multiple
opportunities to create value
How will SA grow its electricity supply
Philip Lloyd
"The future will
look like today"
Energy intensity
It's dropping, but
it's an illusion
Shortage
20 tWh per year
We need 5 tWh
more per year to meet our growth targets
Renewables
Big costs
Eg intermittency
Spinning reserve costs
"South Africa's
future is nuclear"
Gas is nice, but not
available in SA (yet)
Mozambique has lots
Currently 1% of our
electricity is from gas
80 tWh from nuclear for R500 bil vs 8
tWh from RE for R200 bil
Check the numbers
Coal
1/3rd of our export
earnings is from coal
Means paradox
in our policy
SA wants to reduce
coal production
The Californian Duck
Curve in RE systems