how can south africa implement smart grids? international best practice and case studies

How Can South Africa Implement Smart Grids?

International Best Practice and Case Studies

Key Lessons Learned and Adoption Strategies

May 2013

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Introduction

1. Reduction of peak hour demand

2. Solving the problem of energy

inefficiencies

3. Increasing electricity prices

4. Integration of renewable energy into

the grid

Market Drivers Market Restraints

1. Financial pressure and the significant

investment required for smart grid

projects

2. Skills and expertise shortage

3. Policies, regulations, and specifications Source: Frost & Sullivan analysis.

Electricity Sector in South Africa: The national utility’s reserve margin on their generation

capacity is becoming low and may present a problem for the country in the near future.

• Smart grids are an enabler of energy security allowing two-way communication between

the consumer and supplier. It will also allow and facilitate the integration of intermittent

renewable power sources into the energy supply mix, in accordance with the IRP 2010.

• Implementing an efficient smart grid system will give the South African consumer the

opportunity to monitor their electricity use and control the amount of money they spend on

their monthly electricity bills. At the same time, the country’s utility will be able to monitor

electricity demand and control system faults more effectively.

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Case Studies

International Case Studies: The following projects were studied and key project

implementation actions were extracted.

The project was mandated by the Australian government in 2006 for

the roll out of approximately 2.2 million homes and 300,000 small

businesses over a four year period.

Smart Metering Project,

Victoria, Australia

The country has implemented the Smart Grid Test-bed on Jeju Island

incorporating a wide variety of smart grid initiatives. Jeju Pilot Project,

South Korea

33 million meters were replaced with smart meters in the space

of five years.

Telegestore Project,

Italy

Targets one million customers and 43,000 businesses.

410,000 automated smart electric meters have been installed.

Austin Energy Smart

Grid, Austin, Texas

SmartGridCity is a pilot project involving the enhancement of

various distribution systems within the City of Boulder. SmartGridCity,

Boulder, Colorado

Source: Frost & Sullivan analysis.

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Smart Grid Project Implementation Actions—Lessons

Learned


Project Costs

Project costs tend to go over budget due to poor project planning. A cost-benefit analysis

should be conducted for all aspects of a planned project, especially when it is something

new that is being implemented. Include a technology assessment and detailed project

implementation plan.

Company Selection Criteria

The companies selected for project implementation should be chosen based on their skills

and the quality of their technology. South Africa should adopt an evenly weighted selection

criteria. This will ensure that the best companies are selected to lead the project to avoid poor

quality workmanship.

Multi-Disciplinary Consortia

A wide variety of skill sets are required to implement a smart grid project. It is important to have a

clearly mapped-out project plan in order to know what skill sets are required for different sections

of the project.

Consumer Education

The implementation of the technology should result in an active campaign to educate consumers

regarding the benefits offered to them, so as to avoid consumer confusion and frustration.

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Smart Grid Project Implementation Actions—Lessons

Learned


Rate Increases

The installation of smart meters can result in an increase in the price of electricity with the

hope that consumers will benefit from the technology in the long run. It is important that any

expected increases be communicated clearly to the consumer. However, if the project is planned

correctly, the project managers should not run into any unexpected project costs, preventing any

unwanted rate increases.

Technician Training and Product Installation

The lack of training and supervision resulted in some residents reporting the smart meter being

an ‘electrical hazard’ causing electrical circuit shortages in their homes. Technicians need to

be properly trained and supervised in order to avoid accidents which could result in unhappy

Consumers. Correct installation will also ensure that the meters take electricity

readings correctly, preventing consumers from being overcharged as has been the case with

other projects.

Project Management and Goals

It is important to have a clear vision and project plan that looks at all potential avenues. In South

Africa, small-scale demonstration projects operating across different components of the smart

grids and across the boundaries of generation, transmission, distribution and end-use could be

implemented. Models addressing issues such as cost, sustainability, and security will help

establish what works and what doesn’t work for the South African system.

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Smart Grid Project Implementation Actions—Stakeholder

Ecosystem


Consumer Vendor Utility

Academics

Regulator

Government

Communicates

industry standards and

customer needs

Provides a clear

political mandate

Sets incentives and a

clear regulatory

framework and

communicates this

clearly to the utility

Protects consumer

interests

Engages consumer

and educates them

with regards to the

project and its benefits

Forms consortia for

the project

How Can South Africa Implement Smart Grids?

International Best Practice and Case Studies: Stakeholder Ecosystem, South Africa, 2011

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Conclusion and Recommendations

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South Africa is currently focused on promoting energy efficiency within different sectors.

Smart grid technology will predict and respond to changes in the country’s supply and

demand patterns, while, at the same time, allowing for the spread of electricity

consumption throughout the day.

3

The South African government will need to implement clear regulatory policies and

present incentives regarding the development of smart grid technology in the country.

South Africa should take careful steps when considering and planning the technology

implementation locally, being mindful of projects that have been implemented and

adjusting them accordingly.

1

The infrastructure in place is fairly old and is not compatible with smart grid technology.

The refurbishment of old infrastructure and the development of smart grid infrastructure

will go hand in hand.

South Africa needs to be encouraged to do this before substantially increasing the

country’s generation capacity to prevent any further strain on the network.


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