Energy Research Priorities for a Future South Africa

KM Nassiep

Chief Executive Officer

SA National Energy Research Institute

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Contents

About SANERI

Energy Sector Characteristics

Policy and Legislative Framework in SA

Energy R&D Priorities

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The time to act has come and ….

“We are not starting to address climate change with the technology we have in hand, and we are not accelerating our investment in energy technology research and development,”

Prof John Holdren (Harvard University Professor, Director of WHRC, President of AAAS)

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Background to SANERI establishment

Established in response to concerns from government regarding perceived threat to indigenous energy research capacity

Established under Ministerial Directive (Minister of Minerals and Energy) in October 2004

Reports to both Ministries of Minerals and Energy & Science and Technology in terms of governance

Is directed by the objectives of the Draft National Energy R&D Strategy of South Africa (10th Order Draft, 2007)

Has mandate to conduct own research or solicit work from external parties

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CEF Group Structure

Minister of Minerals & Energy

CEF Board of Directors

Chairman

CEF (Pty) LtdCEO

Wholly incorporated divisionse.g. NEEA, EDC

Part Shareholding

Funds

Wholly owned Subsidiaries, includingSANERI (Pty) Ltd

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SANERI is 100% state funded at present, receiving grants via the Department of Science and Technology

A total of R70 million has been transferred to SANERI from government, since 2004/5

An amount of R42 million has been made available in 2007/8 for activities related to:

Flagship project developmentChairs of Energy Research ProgrammeBursary Support ProgrammeEstablishment costs

SANERI mandated to leverage additional funds through grants, royalty income and through collaborative projects

State Funding of SANERI

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SANERI Key Objectives

Ensure long term health of energy research capacity in the country and assist in stimulating a culture of innovation in the energy research environment

Support government goals of energy security of supply through identifying viable and sustainable diversified energy supply options

Address deficiencies in current race, gender and age profile of postgraduate students, academia and scientists

Stimulate socio-economic upliftment through improved access to modern, clean and affordable energy services

Support economic growth through development of flagship projects that will ultimately result in commercial rollout

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Key Challenges Faced by SANERI

Low PIER&D spend in SA – about 0.8% of GDP is spent on R&D, of which about 6% is Energy

Low contribution from Black scientists – measured in publications where about 8% is produced from Black Scientists

Percentage women in energy R&D sector is low, about 26.5% in 2004, which is well below equity targets of government

Challenge of meeting national development goals with consequent increase in demand of natural resources and energy

Access to modern, clean and affordable energy remains a challenge for about 30% of South Africans

Skills loss in Energy R&D sector, particularly Eskom Research

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SA energy contribution to overall publications

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Number of energy publications by year

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Top Research institutions by publishing

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SA in the international Context

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Findings

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Human Capital status

Identified 19 core researchers; 30 tail and 540 post-graduate students (2000-2007)

Core: 84% male, 63% white; 79% PhD; median age 49

Tail: 84% male; 79% white; 85% PhD; median age 43

Post grads: 81% male; 62% white; 23% PhD

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Thematic Areas addressed by SANERI (proposed)

9 thematic areas identified as areas of focus for energy R&D

Energy infrastructure optimisationEnergy Efficiency and DSMUnderstanding the impact of energy use on the environmentStimulating socio-economic development through the productive use of energyCleaner fossil fuels, including clean coal technologyRenewable energyAlternative energy, including hydrogen economy and fuel cellsEnergy planning and modelling andEnergy policy research

These areas are covered in the Draft National Energy R&D Strategy (10th Order Draft, 2007)

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SANERI Role in context

The DMEImplementation

Strategies /Legislation

SOEs PrivateSector

Universities

Policy / PlanningR&D Activities

Com

mer

cial

Contract R

&D

Human Capital Development

Contract

R&D

Research C

hairs

Bursaries

Regulatory

NERSA

All Spheres ofGovernment

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SANERI Collaboration Focus

Universities, Technical Universities, Research Chairs, Hubs, CoE, CoC

SOEs & Pvt Sector (e.g Eskom ERID, Sasol, Anglo, etc)

International R&D Agencies, donors, governments

Legend

CR – Contract ResearchJFP – Jointly Funded ProjectsDFP – Donor Funded ProjectsNL – Jointly Funded National LaboratoriesPRP – Postgraduate Research ProgrammesSFCB - SANERI Funded Capacity BuildingJFCB - Jointly Funded Capacity Building

SANERI In-house

R&D Activity

JFP

CR

DFP

NL

JFP

NL

PRP

SFCB

SFCB

JFCB

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Key Strategic Focus Areas

Energy R&D Agenda

Human Capital Development and TransformationEnergy Research Chairs at UniversitiesRenewable Energy and Sustainable Energy Hub at the University of StellenboschBursary Support Programme

Cooperative Energy R&D ActivitiesFlagship projects

Clean Energy SolutionsAdvanced Fossil Fuel UseEnd Use and Infrastructure ManagementEnergy Policy and Planning (R&D)

Governance

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Energy economy dominated by energy intensive industry and synthetic fuel production - energy intensive industries, largely coal dependent

Cheap coal + high efficiency steam coal-based generation + amortised plants = lowest cost electricity in the world (powerful disincentive for market conditions supporting RE)

No major investment needed in new power generation or refining capacity in last 20 years

Limited market exists for natural gas (mainly imported from Mozambique) although offshore discoveries are sustaining national oil and gas company’s synfuel and chemicals plant

Apartheid left majority of citizens without electricity

Large electrification drive to attain universal access to energy

Remote communities too expensive to electrify – But….

Photovoltaic (SHS) programme - largely unsuccessful (no thermal energy and high maintenance)

Paraffin – unacceptable deaths, injuries and damage to property

Characteristics of Energy Sector

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Electricity Capacity Outlook

Source: Eskom ISEP, 2006

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Build1000

800

1775

165

Feasibility, Business

Case, Contract

Concluding

Pre-feasibility

ResearchOpportunity

Identification

PBMR

Delta

1128

Grootvlei

1520

Camden

300 Arnot P1&P2

November

600

Juliett

Oscar

6000

Mike

1000

Lima

3600

1000

Romeo

1600

Sierra

1050

OCGT

1600

*Papa

1300

Kilo

Bravo

961

KomatiUCG

17375 MW 7800 MW 23100 MW

1050

Quebec

800

Tango90

112

4000Concentrating Solar

100

Version CPF 1.3.16 Date: 30/08/2006

- Coal

W - Hydro

- Nuclear

- Gas

- Coal- Coal

- Hydro

- Nuclear

- Gas

- Coal

Solar- Transmission-

Whiskey

500

Songo ApolloHVDC Link Capacity Upgrade

* Possible 2400MW Mid Merit

Trans KalahariInterconnector

0

0

Discard Coal

0

New Coal Supply

0

90

9

90

Gas 1

1800

Uniform

1200

Victor

Rainbow Millenium

2000

Nuclear 1

1775

3500

Zulu

* Brown outer circle indicates – out of Borders project

2100

Echo

Charlie872

1000

4200

500

Yankee

800

2100Alpha

Hotel 1332

4200

Foxtrot 4200

500

1800

Golf

1050

200

Hwange

India

600

0

CBM

Future Supply Options

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Major energy related priorities

– Universal access to energy by 2012– Energy security of supply

Liquid Fuels Master Plan approved by Cabinet in August 2007Electricity Master Plan under development

Deputy President leading the programme of fastracking economic growth through several strategic projects

– Accelerated and Shared Growth Initiative of SA (ASGI-SA 2005) – Ties in to Government’s Plan of Action to improve service delivery– Energy related strategic projects selected include

Accelerated electrificationBiofuels industry developmentBeneficiation of raw minerals and materials

National Government Objectives

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Energy Policies of SA

White Paper on Energy in SA (1998)

White Paper identified the following objectives:Increasing access to affordable energy services;Improving energy governance;Stimulating economic development;Managing energy-related environmental and health aspects; and Securing supply through diversity (including renewables)

White Paper on Renewable Energy (2003)

Approved by Cabinet in November 2003Follows on the direction set by the Energy White Paper (1998)White Paper calls for:

real, measurable increase in renewable energy use, based on prescribed targetCalls for strategies to be developed to promote specific areas where RE could be developedPolicy aimed to create an enabling environment for renewable energy, setting a platform for industry development.

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Electricity Regulation Act (No. 4 of 2006, became operational 1 August 2006)

Objects of the Act:(d) facilitate universal access to electricity;(e) promote the use of diverse energy sources and energy efficiency;(f) promote competitiveness and customer and end user choice;

Regulator regulates prices and tariffsThe Regulator may make any licence subject to:

conditions relating to the setting and approval of prices, charges, rates and tariffs charged by licensees; compliance with energy efficiency standards and requirements, including demand-side management

A transmission or distribution licensee must, to the extent provided for in the licence, provide non-discriminatory access to the transmission and distribution power systems to third parties.

The Minister may, by notice in the Gazette, make regulations regarding:(m) new generation capacity;(n) the types of energy sources from which electricity must be generated;(0) the percentages of electricity that must be generated from different energy sources; (p) the participation of the private sector in new generation activities;

Legal and Regulatory Framework

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SANERI role in electricity sector

Research and develop technology-based solutions that support grid stability and diversification of energy supply

Develop human capital that supports project implementation in this sector

Support national development objectives by identifying income-generating opportunities that tie in with electricity provision

Support national goals of energy efficiency by supporting local government in implementation of sound projects, in conjunction with the National Energy Efficiency Agency

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Research Vision for the electricity industry

Stabilise Markets

Protect the Environment

Provide for Public good

Educate and empower the Consumer

Unleash Innovation

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Energy Sector Challenges

Regulatory challenges and competition

Unbundling value chains (Electricity)

Consolidation (merges, acquisitions)

Environmental concerns

Increasing energy requirements

Large demand increases (Asian glut)

Diminishing surplus supply capacity

The need to secure alternative renewable resources

Energy security

Increasing pressure on margins

Increasing production cost

Skills shortage

Equipment supply and lead times

Ageing infrastructure due to limited capital for re-investment

Increasing importance of innovation and technology

Increased use of technology to reduce costs and improve reliability

Convergence of technology (IT and telecommunications)

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Current Status of Grid-connected RE

Slow uptake of renewable energy – based on current market conditions

Limited CDM project development, limited PIER&D expenditure on renewable energy

Focus placed squarely on top-up feed-in tariff as only realistic incentive for investors

Department of Minerals and Energy and National Treasury are studying implications of introducing the feed-in tariff and expect decision by April 2008

Eskom to consider competitive bids for renewable energy as part of new supply options

Eskom to construct at least 2 large-scale renewable energy plants as part of their own build programme

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Status Quo of Strategy (Biofuels)

An Industrial Development Strategy has been developed and submitted to Cabinet

Government in the process of soliciting input from stakeholders to refine strategy

Strategy calls for 4.5% contribution by biofuels to petrol and diesel supply

Debate over whether food crops such as maize, sugar-cane and soya should be used for biofuels

Research programmes underway to investigate use of japtropha, algae and other plant types for biodiesel production

Research underway into enhancing cellulosic extraction of ethanol for bioethanol

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Energy R&D Priorities

Grid-connected Technologies

Resource assessments (ongoing)Pilot and Demonstration projectsPotential for local design and manufacture of components, e.g.

heliostats for CSPPotential for development of low-wind speed turbinesPotential for development of advanced hybrid mini-grid technologyDevelopment and testing of local, high quality solar water heatersIntegrate RE into building design, beyond passive solar design

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Energy R&D Priorities

Non-grid electrification

Refinement of model for hybrid mini-grid deployment

Investigation into possible use of fuel cells to provide more sustainable energy supply to remote communities

Ongoing development of PV, small wind turbines, biomass digesters and gasification projects

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Energy Efficiency: Vision

To encourage sustainable energy sector development and energy use through efficient practices thereby minimising the undesirable impacts of energy usage upon health and the environment, and contributing towards secure and affordable energy for all (DME).

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Research Focus Areas: Energy Efficiency

Applying the 80/20 principle

Criteria

– Value added

– Technology breakthrough

– Social, environmental

Focus areas that are going to make the biggest difference in the short term (1-3 years)

Water heating

Compressed air

Pumping

Minimizing electricity transmission and distribution

Steel industry

Commercial lighting

Solar Traffic lighting

Solar street lighting

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Research Focus Major focus is on :

Sustainability (economic, social and environmental)

Carbon capture and storage ( oil and gas and electricity)

EmissionsEnergy security

Alternative fuel sources (solar, gas, batteries)

Support the development of the hydrogen economy

Planning for capacity expansion (what, when, how)

New technologies to deal with capacity expansion (choices)Optimisation

Asset management (oil and gas and electricity sectors) – increasing the life-cycle of existing assets, efficiency and reliability

Electricity sector network/ substation automation

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Medium to long term focus: Electricity

Reviewing generation options

Increasing transmission capacity

Superconductors (conductors, transformers)

Improving power quality and reliability

Understanding service level requirements

Planning for reliability

Transformer research

Increasing robustness, resilience and security of supply

Exploiting energy storage

Transforming markets

Creating infrastructure for a digital society

Electricity transportation

Technology innovation

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Superconductor Research Applications

Underground power transmission

HTS underground power transmission cables will carry electricity from the utility stations to transformer substations.

Since the cables are composed of superconducting wire there is very little loss of electricity.

This transmission cable can carry 3-5 times the current of conventional power cables.

This capacity will be great value in places where new rights of way are restricted.

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Superconductor Research Applications

High temperature superconducting transformers

Offer utilities and industry a highly efficient, lightweight compact and environmentally friendly alternative to today’s oil filled transformers

Fault current limiter (FCL)

Can protect power transmission, cable and operating equipment from surges of excess electricity caused by lightning strikes, short circuits and power fluctuations.

The HTS coils in the FCL control the high current burst just long enough for the circuit breaker to open.

Generator coils

The coils will be used in high efficiency low cost generators for electric utilities

Thank You

We would like to take the opportunity to invite all members of the AMEU to join us in the effort to affect a change to a

sustainable energy future