South Africa and smart grids


Dr Willie de Beer,
SASGI Manager
By Dr Willie de Beer, SASGI Manager

A reliable and efficient electricity supply industry remains a vital enabler of the economy of South Africa. Without this capability it is not possible to grow our economy or create the jobs desperately required. From this perspective we are not unique and many other countries such as the USA, UK, Europe, China, etc. have realized this and continuously apply their minds to the challenges associated with retaining an effective electricity supply industry. Therefore we are in a good position to learn from the rest of the world and we do not have to “reinvent the wheel”.

From a smart grid perspective or grid modernization, South Africa is lagging behind many developed countries. However, this should not stop us from embarking on the grid modernization journey without delay. The electricity transmission business in South Africa is a good example of what can be achieved from a grid modernization or smart grid perspective. This sector of the electricity supply industry is already a very long way down the smart grid journey and compares favourable with many of the transmission businesses in developed countries. This is, however, not true for the distribution sector in South Africa. There are some of our municipalities and Eskom Distribution which have started the journey towards smart grids, but we have a long way to go.

It is acknowledged that for many utilities throughout the world, the journey towards a smart grid starts with the introduction of “smarter meters”. These initiatives in some cases have been driven by the need for better revenue management while others have pursued improved two way customer interaction and communication. From an overall improved customer relationship and sustainable business perspective, one would subscribe to the latter of these two motivations. While the utility business is by its nature an asset intensive business it can never be successful without a strong focus on customer relationship management. The smart meter therefore becomes one of the key enablers to enhance two way communications between the customer and the utility.

However, it is very important that we recognize that a smart meter is not equal to a smart grid. A smart grid consist of a multitude of applications that are deployed to enhance amongst others asset management, resource management, outage management, supervisory control and data acquisition, customer interface management, revenue management, etc. Considering this very brief introduction to smart grids, it should be clear that different utilities can start their smart grid journey at different departure points. Therefore one utility could for example start its journey with the introduction of advanced asset management while another one could start the journey with the introduction of smart meters. Therefore the specific needs of a utility should be considered prior to embarking on the journey towards a smart grid. What, however, is mission critical is that you cannot and should not start this journey without a clearly defined smart grid strategy and journey map. Without knowing where you are and without defining where you want to be, the risk is extremely high that significant amounts of capital might be spent without realizing the desired return on the investment. This will ultimately end up on the customer’s account through the tariffs to be paid for electricity services.

The key question for South Africa is: how should and could we respond to the grid modernization or smart grid opportunity? It is important to note that the electricity supply industry in South Africa has served the country well for many decades. It is also true that most of the infrastructure currently in service was not designed or built with the 21st century electricity supply requirements in mind. Furthermore there has been a significant grid expansion over the past decade or two and a massive decrease in asset maintenance and refurbishment. Therefore the increase in electricity outages and unhappiness of customers about electricity service delivery should not come as a surprise.

Recently the cabinet approved the Approach to Distribution Asset Management (ADAM) initiative as part of the strategy to turn around the performance and investment in the electricity distribution industry. At this stage the suggestion is that approximately R35 billion (US$3.9 billion) will be required to address the existing maintenance and refurbishment backlog. While this is a substantial amount of money we should not overlook the significant opportunity to capitalise on ADAM and to use it as a step to move towards a smart grid. It is also important that we leverage all other funding and investment opportunities to move the industry towards smart grids.

Some of the major challenges facing the journey towards a smarter grid in South Africa are:

  • Selection of appropriate standards
  • Hedge against sub-optimal technology investments
  • Hedge against technology dumping
  • Development of local products, resources and skill
  • Establishment of enabling policies and a regulatory framework.

To enhance the readiness of South Africa and to facilitate the smart grid journey some key steps are being taken. Under the guidance of the South African Energy Development Institute (SANEDI), the South African Smart Grid Initiative (SASGI) has been established. SASGI is a representative electricity industry forum, which was established to assist SANEDI in the execution of its mandate in respect of smart grid rollout in South Africa. The accountability resides with SANEDI to provide the required direction for the introduction of smart grids in South Africa. SANEDI reports to the Department of Energy (DOE) and SASGI is co-chaired by DOE.

Under SASGI three working groups have been established to address some of the key aspects associated with the rollout of smart grids. These are:

  • Policy
  • Technology and standards
  • Applied research (implementation).

Currently SASGI in conjunction with DOE is attending to the selection of potential smart grid pilot sites. It is envisaged that by mid-2013 the first smart grid pilot site will be up and running.

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