Determining an appropriate electricity supply mix for the Hessequa Municipality: A system dynamics approach

Date
2018-03
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: South Africa has a highly centralised, monopolistic and regulated electricity sector. Eskom is the country’s national electricity utility and a state owned enterprise. Steep electricity tariff hikes have caused many consumers to invest in embedded generation technologies such as rooftop PV systems to reduce their dependence on grid-based electricity. Most of the defecting electricity consumers purchased electricity from a local government entity, who in turn purchased electricity directly from Eskom. Local governments often use profits from electricity sales to subsidise its various service delivery functions. A shrinking customer base on the local government level can thus threaten the financial viability of a municipality. Increases in electricity tariffs result in more customers investing in embedded generation causing the municipal customer base to shrink even more. This complex municipal system and its internal interactions are commonly referred to as the municipal dilemma. The Hessequa local municipality, located in the Eden district of the Western Cape, is used as a case study to explore the possible impacts of the municipal dilemma on its electricity sector. In order to limit the potential negative impacts, local government wants to investigate the option of supplying a third of local electricity demand with renewable energy technology. This study estimates the current and future demand for electricity in the Hessequa area based on population growth and economic growth. Various renewable energy technologies are evaluated along with renewable resource availability. A system dynamics model is used for simulating scenarios that test policies relating to renewable energy technology investment. The impacts of expanding the renewable energy generation capacity on the environment, socio-economic conditions and local government are investigated. This study shows that both biomass (in the form of invasive alien plants) and solar resources are in sufficient supply to meet the municipality’s goal of supplying its electricity demand through renewable electricity generation. Simulation results indicate that solar photo-voltaic (PV) energy is the most attractive renewable energy option in terms of capital cost and the cost of generated electricity. Biomass power is more expensive than solar PV in terms of capital cost and cost of generated electricity, but has better job creation potential and positive environmental impact due to invasive alien clearing. Simulation results further suggest that an appropriate renewable electricity supply mix would consist of a large portion solar PV and biomass power. The recommended electricity supply mix will require an estimated cumulative investment of R 679 million by 2040. The model also indicates that significant 𝐶𝑂2 emission reductions up to 37% can be expected by the year 2040 relative to the case where no commercial scale renewable energy generation is established.
AFRIKAANSE OPSOMMING: Suid-Afrika het ‘n hoogs gesentraliseerde, monopolistiese en gereguleerde elektrisiteitsektor. Eskom is die land se nasionale kragvoorsiener en is ook ‘n staatsbeheerde maatskappy. Skerp verhogings in elektrisiteitstariewehet daartoe gelei dat baie elektrisiteitsverbruikers investeer in kleinskaalse elektrisiteitsopwekkingskapasiteit soos PV sonkrag stelsels. Die doel met die investering is om verbruikers se afhanklikheid van die nasionale kragnetwerk te verminder. Die meerderheid van verbruikers wat oorskakel na hernubare kragvoorsiening het vroeër elektrisiteit gekoop by plaaslike regeringsinstellings, wie dit weer direk vanaf Eskom gekoop het. Die wins wat deur elektrisiteitsverkope gegenereer word, word dikwels deur plaaslike regerings gebruik om munisipale dienslewering te finansier of te subsidieer. Die krimpende kliëntebasis kan die plaaslike regering se finansiële volhoubaarheid bedreig. Daar word dikwels na hierdie komplekse stelsel en sy interaksies verwys as die munisipale dilemma. Die Hessequa Plaaslike Munisipaliteit, geleë in die Eden distrik van die Wes-Kaap, word in hierdie studie gebruik as ‘n gevallestudie om die moontlike impakte van die munisipale dilemma op die area se elektrisiteit sektor te ondersoek. In ‘n poging om die negatiewe impakte van hierdie dilemma te beperk, wil plaaslike regering die opsie ondersoek om ‘n derde van sy elektrisiteitsaanvraag te voorsien met behulp van hernubare energietegnologie. Die studie skat die huidige en toekomstige elektrisiteitsaanvraag vir die Hessequa area vooruit op grond van bevolkingsgetalle en ekonomiese groei. Verkeie hernubare energietegnologieë word ge-evalueer tesame met plaaslike beskikbaarheid van hernubare energiebronne. ‘n Stelsel dinamiese model is gebruik vir die simulasie van verskeie senario’s wat beleide toets in verband met hernubare energie investering. Die impkate van hernubare energietegnologie op die omgewing, sosio-ekonomies omstandighede en die plaaslike regering word ondersoek. Die studie bevind dat biomassa (in die vorm van indringerplante) asook sonkrag hulpbronne in die area voldoende behoort te wees vir elektrisiteitsopwekking ten einde die oogmerk te bereik om een derde van die totale munisipale elektriese energievraag uit hernubare energie te bevredig. Simulasie-resultate dui daarop dat sonkrag PV die aantreklikste opsie is in terme van kapitaalkoste per kW geïnstalleerde kapasiteit asook i.t.v. die eenheidskoste van elektrisiteitsopgewekking in Rand per kWh. Biomassa-gebaseerde elektrisiteit is duurder as sonkrag, maar het groter potensiaal vir werkskepping en gunstige omgewingsimpakte as gevolg van die uitroei van indringerplante. Die simulasieresultate stel voor dat die mees gepaste hernubare elektrisiteitsvoorsieningsopsies sal bestaan uit ‘n groot deel sonkrag en biomassa elektrisiteit. Die simulasies dui verder aan dat ‘n geskatte R 679 miljoen se investering kumulatief benodig sal word teen 2040 om die voorgestelde tegnologieë te implementeer. Verder word daar aangedui dat 𝐶𝑂2 vrystelling teen 2040 met 37% kan verminder relatief tot die opsie wanneer geen kommersiële skaal hernubare elektrisiteit opgewek word nie.
Description
Thesis (MEng)--Stellenbosch University, 2018.
Keywords
Renewable energy sources, System Dynamics Modelling, Hessequa Local Government, Hessequa Municipality, Electric power -- Distribution, UCTD
Citation