Thursday, 2 August 2012

Understanding Renewable Energy Opportunities

Hi Peter

Thank you for the compliment. We appreciate it and it helps with our work. Are you a member of SAAEA?

The first thing people need to do is for us to change the way we think about our capital spend. Eg borrowing R100,000 may have a 20 year repayment period and thinking about it another way, you might be cash positive in year 8, due to the fact that your electricity price is constant, whereas without your system your electricity price would be increasing.

But another way to look at this, is that if you can spend the same amount of money per month producing your own electricity, as you are spending on electricity at the moment, then you are cash neutral in year one and in year two you are cash positive, making approximately R4000 profit in year two from become a power station supplying electricity to the grid.

If you are paying R1200 per month for electricity in the City of Cape Town, then if your rate is R1.50 per kWh, then you are using 800 kWh per month of electricity. This would require a 5.5 kW system which would cost R125,400. R125,400 at 10% over 20 years is R1200 per month, which means that you are paying the same amount for producing your own electricity as you would have paid the City of Cape Town.

Regarding your second question:

This is the standard response we get from the Utility, Eskom in our case. And sometimes from people who are against new technology and also from people who don't understand the renewable energy environment in its totality.

But there are a number of options:
1) The NERSA and SABS Net Metering (Embedded Energy) Standard allow for Time of Use Metering, eg where electricity at off peak time (10pm to 6am) could be anything from 1 cent to 75 cents per kWh; electricity at standard time (6am to 10pm) is R1.50 per kWh and electricity at peak time could be anything from R3 to R11 per kWh. I have calculated that it costs R11.50 per kWh for Eskom to run Ankerlig at full capacity. Ankerlig is a peaking power station that uses 25,000 litres of diesel per minute to produce 1,350 MW of electricity. This at peak demand. So if you knew that you were going to pay an exorbitant amount of money for using electricity at peak time, you would change your behaviour. Not only this, but you would look for ways to supply the grid with electricity at peak time so that you could make this money, eg by running a generator or using a battery bank. We also become much more energy efficient so that we only run microwaves and kettles at peak time and maybe our laptops and TVs. We don't use any heavy users at peak times, eg no pool pumps; no geyser electricity; no stove or hob cooking; no heating or air-conditioning, etc.
2) PV is not the only renewable energy technology. We can get about 1/3rd of our electricity requirement from the gas in sewerage. So during the off peak time we collect the gas and run GE Jenbacher gas-engines at peak time. ABSA have 4 of these gas-engines (generators) at the HQ in Joburg. Eskom are paying them to run them 24 hours a day using gas which is piped to Joburg from Mozambique.
3) With Solar Tower CSP (Concentrated Solar Technology), Spain is running plants at 16 hours of production per day. This easily covers the 6am to 10pm "Standard Time" periods. They have even run a plant for 24 hours per day!
4) Then there are wind turbines, micro-hydro, ocean currents, and many other forms of Renewable Energy one can utilize.
5) And then there is the best battery of all (at the moment), a dam, especially Pumped Storage. Lesotho has 7 GW of potential pumped storage capacity. It would be much better for South Africa to invest in building the Lesotho pumped storage project than in building nuclear and other fossil fuel power stations.

6) And there are still other options, for example Eskom pay rebates to large users who can remove electricity from the grid at short notice. Eskom are currently paying R300 million per month in these incentives, which are called DR or Demand Response. But the big users are complaining and withdrawing from the DR program, because they are losing market share because their factories aren't operating at full capacity. You might have read that South Africa's iron and steel and aluminium production is down 20% since last year. This is directly caused by a lack of electricity, although Eskom and the ANC and DA government would have you believe that the reason is because of a "recession." All that is happening by this lack of electricity is that we export more raw materials (note the huge additional investment happening in the railways and harbours at the moment) and we export jobs to China, Korea, Mexico, Germany, Australia, and the many other countries that are producing goods for South Africa and the over 40 other countries which don't have enough electricity. The country with the biggest crisis at the moment is Greece. The crisis is being blamed on a banking crisis, and yes, that is because the banks have invested in fossil fuel imports instead of making electricity from renewable sources. Greece's problem is a lack of electricity. This is impacting on all parts of its society.

I pray that this has given you a taste of the renewable and alternative energy spectrum and you will join the SAAEA in its quest to get Renewable Energy adopted in South Africa in the shortest possible time.

Feel free to ask more questions :)

Ke nako (the time is right for Renewable Energy),

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