The CSIR methodology only measures the immediate fuel saving effect on the existing fleet, says Dr Tobias Bischof-Niemz, head of the CSIR’s Energy Centre.
It would be beneficial for the quality of the discussion about the issue of whether renewable energy is costing the South African economy or saving it, if Eskom could publish the hourly raw data that underlies the power system analysis.
This is the assertion made by the
This is common practice by transmission system operators (TSOs) across the globe, the research institute says. For example, it notes, the association of European TSOs publishes on its transparency platform in real-time the 15-minute to hourly production and availability data of all power supply sources on aggregated level (ie, per fuel type) in all European countries, market and balancing areas.
Without this transparency about the operational details of the power system, the CSIR says it is difficult to comment on final end results for any researcher.
The research institute’s sentiments follow a statement (../index.php?option=com_content&view=article&id=158589:Renewable-energy-posts-R9bn-net-loss&catid=160) by the power utility this week that renewable energy posted a net loss of R9 billion in 2016.
Eskom made its calculations based on a methodology developed by the CSIR quantifying the net economic benefit of renewables (solar photo voltaic and wind). Eskom says for the first six months of 2015, it purchased 2.0 Terawatt hours (TWh) of wind and solar PV. The CSIR calculated a total financial benefit of R8.2 billion. This was offset against the R4.3 billion renewable energy tariff cost, resulting in a net economic benefit of just under R4 billion.
However, the power utility says from January to
Using the same methodology, Eskom calculated the total financial benefits, which amounted to R3.2 billion. This was offset against the renewable energy tariff cost of R12.2 billion, resulting in a net loss of R9 billion to the economy.
Dr Tobias Bischof-Niemz, who heads up the CSIR’s Energy Centre, says the methodology developed by the CSIR measures only the immediate fuel saving effect on the existing fleet and not the long-term effects on new investments that an Integrated Resource Plan will measure.
Methodologically, it therefore always grossly underestimates the value of a new power generator, he notes.
“The methodology was developed to be applicable during a time of a constrained power system with a high diesel turbine usage. When the power system is less constrained and diesel turbines are not operational most of the time, the methodology underestimates the diesel fuel savings. It needs to be adjusted to give the correct fuel-saving value,” says Bischof-Niemz.
He points out that only bid window one and two projects of solar PV and wind were operational in 2016 (and a few bid window three projects for a few months). “These are by far the most expensive projects – and they will be for the next 18 years – the residual time period of the 20-year power purchase agreements.” According to
The discount stems from avoided load-shedding and from diesel fuel savings, he adds. “Both effects were not anticipated when the decision was made to implement these expensive projects.
“Because of the coinciding constrained-ness of the power system during the time when these power generators came online and worked as ‘emergency supplement’, the country received a ‘discount’ on the cost of them for the first few years.” He says the real value in the projects of bid windows one to three lies in the fact that without them, the country would not have been able to bring the cost for new solar PV and wind down to the latest achieved 0.62 R/kWh – which is 40% cheaper than new coal.