DoE tests market for near-term power demand reduction offers

South Africa’s Department of Energy (DoE) has issued a formal appeal for companies and individuals to provide it with information on possible near-term solutions to reduce or shift electricity demand, as well as to immediately improve supply – the responses will guide the design of future procurement processes.

Government’s Independent Power Producer (IPP) Office released the request for information (RFI) in mid-December and responses need to be submitted by February 2.
 The RFI documentation notes that demand response and/or distributed generation strategies are “critical” to improving the reserves needed by the system operator to better employ available generating capacity and to allow for higher levels of power-station maintenance. The anticipated daily shortfall, the RFI adds, is likely to be between 3 000 MW and 5 000 MW until additional generation capacity is introduced.

Differing seasonal requirements are also highlighted, with savings targeted for between 9:00 and 21:00 in the summer months from September to April and between 17:00 and 20:00 from May to August.

The RFI follows the adoption by Cabinet in December of a five-point plan designed to stabilise the electricity supply sector, which has become increasingly prone to disruption, owing to a delay in Eskom’s build programme and a decline in the performance of the utility’s aging generation fleet.

The paid-for advertisement also acknowledges the depth of the electricity problem, describing it as a “crisis” – a stark deviation from the official stance adopted by Eskom, which has continually avoided using the word crisis to describe the state of the power system.

Included in the Cabinet-endorsed plan is a directive that private IPPs, cogeneration and demand-side solutions be harnessed with the support of various procurement programmes. Also emphasised is an ambition to manage demand “through specific interventions within residential dwellings, public and commercial buildings and municipalities through retrofitting energy efficient technologies”. The DoE believes that demand-side could free up 500 MW within six months.

This approach has been strongly supported by Business Leadership South Africa, which says big business stands ready to support the implementation of the five-point plan, including through the accelerated demand side management interventions.

The specific objective of the RFI is to gather information and test the market for innovative demand response and/or distributed generation solutions. The DoE notes that similar exercises proved useful ahead of the design of the renewable-energy procurement process, through which nearly 4 000 MW of capacity has been procured. In addition, market testing is helping guide the design of baseload and cogeneration procurement initiatives.

This RFI is particularly interested in companies and individuals with dispatchable demand response solutions, as well as in energy efficiency, load management and fuel switching proposals. In addition the RFI is also seeking information on distributed generation prospects, despite the fact that the regulations are not yet fully supportive of allowing individuals and businesses to feed excess capacity back into the grid.

“This RFI is intended to generate information to assist the department to assess the size, type and nature of the possible solutions available to enable it to develop appropriate strategies, as well as the options with solutions to implement such strategies,” the department explains.

Responses are being sought from independent demand-response aggregators, developers of innovative demand-side management projects and distributed generators, but the DoE stresses that the RFI will not be used as a basis for prequalification.