The energy sector is undergoing something of a metamorphosis. Digital technology and small scale embedded generation are becoming more common in electrical systems, leaving traditional power utilities with many unanswered questions. Perhaps the most important question is how this energy revolution can be used to address the severe energy poverty that exists in many parts of Africa.
A panel discussion was held during ABB’s recent Customer World Africa 2018 event at the Sandton Convention Centre. The following people comprised the panel: Chris Yelland, EE Publishers; Wayne Nelson, Microsoft; Maxine Ghavi, ABB Switzerland; and Stuart Michie, ABB South Africa. The panel was moderated by ABB South Africa’s Bertha Dlamini.
It has been reported that 600-million Africans do not have access to a reliable source of electricity. The panel discussed the factors which could assist in making electricity available to these people and the business models which would overcome some of the challenges facing today’s power utilities.
Chris Yelland said that regulatory reforms are needed to enable electricity-generating companies to participate in the supply of electricity to these individuals without having to go via large, vertically integrated monolithic state-owned companies. Yelland said the answer lies with distributed generation, but current legislation limits this.
The energy sector needs to be liberalised and become less dependent on state-owned electricity monopolies. This would require a change in ideology on the part of the government and a willingness to move away from a centralised generation business model, Yelland said.
While distributed generation is becoming popular in many countries, most African countries are still tied to the old way of doing things. Ultimately, financial constraints will drive these governments to look for more pragmatic solutions. The utility death spiral is playing out in many places now, and economic realities will force politicians to become more customer focused, he said.
Policy uncertainty limits foreign investment, Yelland said. However, the recent signing of power producer agreements with independent power producers by Eskom is likely to result in additional investment in the South African energy sector. Nonetheless, the government must change the law to allow consumers to purchase electricity from their generator of choice, he added. Another area of concern, where legislation must change, relates to energy storage which is currently regarded by the Department of Energy as a generation technology, which it is not.
Maxine Ghavi said that utilities are moving from a centralised to a more distributed network design in many parts of the world as modern technologies, which operate behind the meter, become more common. These new technologies – known as distributed energy resources (DERs) – provide flexibility for both the utility and the consumer, she said. Customers who generate electricity from solar PV or stored energy purchased when tariffs are cheaper, compound the utility’s challenge of predicting load. Utilities, Ghavi said, need to rethink their business models to accommodate bidirectional current flows in their networks. One form of DER, known as grid-edge technology, can assist utilities to offer new and different services in addition to selling electricity.
Ghavi said that Africa’s demand for electricity will continue to increase and that DER, which includes many generation technologies, along with microgrids, which offers generation at the point of consumption under the same control mechanism, will be the most cost-effective and practical solution. Microgrids, Ghavi said, are both technology and size agnostic and will be as useful in a village as in a mine or an island. Microgrids can be independent of a grid network or grid-connected, she added. Examples of both types include ABB’s grid-connected microgrid at the company’s Longmeadow head office, and the independent microgrid with PV, storage and diesel generators on Robben Island, she said.
Stuart Michie said that the energy revolution will introduce disruption to existing networks which were not designed for bidirectional current flows. Utilities tend to see embedded generation as a threat to their businesses, he said, because it results in a decrease in revenue from lower electricity sales, while the cost of maintaining the network increases over time. The matter of safety is also a concern for many utilities which need to ensure that power is disconnected from both sides of a point before a technician can work on it. This too adds cost.
Utilities need to embrace the use of other infrastructure to provide additional services to increase their revenue, he said. One example is the idea of a “virtual power station” which uses surplus electricity from a number of houses in an area as a generation point from which the utility can sell electricity.
Wayne Nelson said that digitalisation offers utilities the opportunity to offer data collection as a service. Microsoft and Facebook already collaborate in the energy sector, Nelson said, and both make use of clean energy to power their data centres. Using the example of a streetlamp which has been fitted with sensors to measure rain, light and temperature, Nelson said that this streetlamp has become a data collection point. This data can be sold by the utility to provide additional revenue. Another example he gave was of electric vehicle (EV) charging points, where the charger can provide data regarding the number of charges it provides and the depth of those charges. This can assist in load forecasting, but can also be sold to companies interested in regional EV usage.
Smart meters also collect data which can be sold or used by utilities to improve their networks. Such data can be used to improve preventative maintenance by predicting when equipment should be serviced, for example. Grid-edge technology allows local utilities to use local data without the need for internet access, Nelson said.
In response to a question from the floor regarding cyber-attacks, Nelson said that while some utilities are wary of using cloud-based data storage, recent tests have shown that the cloud is highly secure. Companies like Microsoft take customers’ data security seriously, adding that a special smartgrid security architecture has been developed for use by power utility companies.
In answer to a question about blockchain and peer-to-peer energy trading, Nelson said that Microsoft is working with both industry and government and that the technology is still under development.
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