Power infrastructure and billing models need review

28th February 2014

  

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Amid ongoing power delivery challenges facing South Africa, key players in the sector say the time has come for reviews of the infrastructure management and revenue models. This emerged at a roundtable brainstorming session regarding the challenges and opportunities in the power generation and distribution sectors, held in Sandton, in November.

Several stakeholders debated these topics, ahead of the Power-Gen Africa and Distributech Africa 2014 conferences and exhibition, to be held in Cape Town from March 17 to 19.

Responding to the participants’ view that the pricing and revenue and infrastructure management models of power generation needed to be reconsidered, Distributech Africa advisory board chairperson Willie de Beer says, “the days of the classical kilowatt hour business are over”, adding that, “reselling power for a set margin is no longer enough – the sector needs to look to new revenue streams and leverage technology to encourage, among others, customer engagement and energy efficiency in ways that ease the pressures on the national grid”.

Further, De Beer says an ageing infrastructure and workforce present challenges to the industry, with serious gaps in asset management and performance management. With this in mind, South Africa’s Integrated Energy Plan presents an ideal opportunity to revisit existing strategies, operating regimes and models and to develop a model that supports growth and sustainability.

Engineering consultancy Black & Veatch VP Shahid Qadri, adds that “resetting of equilibrium” regarding the financing of power, is needed.

State-owned utility Eskom power delivery engineering GM Prince Moyo, says a good number of Eskom’s plants are operating beyond original design life and, therefore, require higher levels of planned maintenance work.

“It is a critical decision time for Eskom,” he says, adding that, “Eskom has to assess whether it should shut down plants as it reaches design life, or undertake life extension projects.”

Renewable Energy

Moyo says over 1 000 applications for renewable-energy projects have been under consideration, as part of a programme to replace coal-based generation, “but it’s a balancing act in terms of price”, he adds.

He notes that the country has been too ‘short-term focused’ in the past, and that the time had come for longer-term planning. Eskom recently applied for a five-year tariff determination aimed at providing some certainty over prices. The tariffs Eskom was granted were less than it had applied for.

“It is better to bite the bullet if you must, and work through short-term challenges in the interest of meeting long-term goals,” Moyo maintains.

He says the Power-Gen Africa and Distributech Africa 2014 events will present an opportunity for knowledge sharing and growth.

“Eskom has extensive skills in areas, such as long distance power transmission and rural electrification, having electrified over four-million rural households since the early 1990s. However, it is seeking knowledge on issues, such as grid modernisation, high-voltage direct current and ultra-high voltage infrastructure,” Moyo adds.

Participants in the roundtable also noted that an ageing workforce and lack of skills development posed a threat to the future growth of the sector.

South African Association of Energy Services representative Dieter Krueger says there is a serious lack of suitably qualified electrical engineering professionals in South Africa. “We need to address this challenge from school level,” he adds.

Meanwhile, PennWell events director Nigel Blackaby notes that in Power-Gen events around the world, utilities had highlighted similar challenges and opportunities – notably a surge in demand and growing interest in renewable energy.

“The discussions and ideas that emerged from the roundtable event will be developed in more depth at the conference in March, which will also address issues facing the power industry across Africa,” says Blackaby.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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