South African consumers can expect an added expense from municipal authorities with the imminent arrival of smart metering for electricity consumption, but solar photovoltaic (PV) power may provide a solution, says power protection and management solutions provider Powermode MD Jack Ward.
Smart metering is an intelligent metering system that enables local authorities to bill at much higher rates during peak periods. It forms part of a process known as time- of-day-billing, he explains, which is driven by government legislation as a result of the national energy crisis.

“The Electricity Regulations Act of 2006 specifies that all end-users with a monthly usage of 1 000 kWh or more need to be on smart metering systems by January 2012, but there have been delays, owing to mismanagement in various municipalities,” adds Ward.

Power spikes, exceeding 3 000 MW, have been registered during the morning and evening peak periods on the national grid – equivalent to the output of five generating units at a large power station.

Through the use of specially designed meters, authorities will be able to charge more for electricity consumed during these peak time periods. The authorities will also be able to disconnect household electricity, if necessary, through the two-way communication capabilities built into the meters.

With South Africa’s State-owned power utility Eskom having to deal with spikes in electricity consumption that are increasingly difficult to manage, the implementation of dynamic tariffs is regarded as one solution in addition to smart metering.

Peak-period, near-peak and critical-peak tariffs are common time segments overseas and they can be expected to be introduced locally, together with tariffs of about eight times the normal rate, for the most expensive, critical-peak period, when the process is introduced.

This will cause Eskom’s 8% yearly base price hikes to pale into insignificance for the average consumer, who could face price increases of up to 60% on average, unless power consumption patterns are changed.

Another solution, designed to penalise electricity users who exceed a given rating, is the introduction of a substantial levy, linked to power consumption surges of 30 minutes or more by municipal authorities, irrespective of the time of day.

Common in South Africa’s industrial sphere, the levy, or demand surcharge, is designed to incentivise consumers to lower the peaks or spikes of their electricity consumption graph in a process known as ‘peak lopping’.

While rates in the domestic market will most likely vary between municipalities and even between consumers, based on what would be considered normal usage details of draconian levy proposals of up to 100 times more than the base price per kilowatt hour for power peaks higher than an agreed maxi- mum amount, are surfacing.

“Demand charges/levies are not new, it has always been in existence for commercial customers. With smart metering, it is expected to be rolled out to domestic cus- tomers,” says Ward.

While the feedback from smart metering projects overseas has shown cuts in overall energy consumption, the onus is on the consumer to reduce consumption at peak times by switching off the power supply to geysers, lights and any nonessential appliances.
The process of smart metering, which can be automated with the use of time switches, does not, however, provide a ‘catch-all’ for consumption peaks, which could well take place outside of traditional peak periods and be caused by unplanned or irregular use of large power-consuming devices such as power tools and welding machines.

“Manual peak lopping is far from an exact science and is unreliable at best,” says Ward.

Solutions to the Problem

In many countries, solar PV power is regarded as one of the best sustainable energy resources and a viable solution for replacing or supplementing utility power during peak periods or periods of maximum power demand, Ward states.
He adds that several solar PV power projects worldwide show a rapidly emerging market for a combination of grid-connected and hybrid solar PV power systems. Besides solar power being 95% to 97% more efficient in terms of greenhouse-gas emissions than coal-fired power stations, hybrid solar power, with battery storage facilities can provide a reliable back-up electricity supply during load-shedding and other power outages.

Solar PV power can significantly supplement or replace grid-supplied power during high tariff hours and, with the use of an intelligent, power factor corrected inverter and batteries, can be effective in saving significant amounts of money, in terms of improved load use by synchronising the amperage draw curve with the power supply cycle and in meeting peak-lopping targets too.

To date, solar PV systems have been regarded as prohibitively expensive, owing to high capital costs. However, this barrier is being overcome, as the prices of solar panels, inverters and accessories are decreasing, owing to increased consumer demand and electricity price hikes. This is an indication that solar PV power is becoming increasingly viable as cost parity nears, notes Ward.
Time-of-day billing and peak-period consumption levies, will herald major developments in active demand-side management (ADSM), with, for example, solar power automatically stored during the day and seamlessly taking over from grid energy at the precise time peak rates are adopted, which is orchestrated by a new generation of preprogrammed manage- ment systems also primed for peak-lopping duties.
Not only will solar PV system owners benefit in the short term, but overseas studies also show that ADSM clearly improves the value of solar PV investments over time, as they can be expected to play an important cost-saving role in the future, says Ward.