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Structural, Civil, Mechanical and Electrical Consulting Engineers

Energy & Power

DLV Engineers (Pty) Ltd Brief company profile and specific experience CO

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Energy & Power

The story of Energy and Power

In today’s modern economies, business and enterprise are entirely dependent on a reliable source of electricity. This is true for all types of business, whether electricity is an essential factor of production, or forming a seemingly insignificant component of its overhead cost structure. It is therefore not only wise, but also prudent to be aware of costs and the quality of power supplied to a business.

At DLV we offer our clients a comprehensive service that will ultimately result in either a reduction of costs, improvement of the reliability and quality of supply, and ultimately making our clients less reliant on power supply from the utility, i.e. ESKOM or the local Municipality. This doesn’t happen with a single event but rather through a journey, from simple small steps, to the grand finale, where our client can literally ask the supply authority to remove their supply cable!

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To be independent from grid supply is a dream of many but a possibility to only a few. DLV will help our clients to find the sweet spot, the optimum combination between supply side and demand side interventions. At this point, our clients will experience maximum benefit, minimum capital expenditure (if at all) and maximum return on investment (or IRR).

If not done yet, a good starting point is to gather electricity consumption data first. A utility bill may be of assistance but not on its own, it is simply not enough. DLV will assist you through the process, constantly aware of budgetary constraints as well as policy / procedural implications.

We use a cost-benefit optimisation approach, which essentially means that we develop a business case for each step along the way. If the trade-off between the cost of an intervention and the benefit derived from it, does not fit your financial performance criteria, we’ll simply not proceed.

The service we offer comprises a total of 14 individual components. Each component can stand on its own, or be integrated into a holistic project, but where each one is still judged on its own success.

In addition, DLV offers its conventional consulting engineering services in the disciplines of

(i) Project Management (ii) Mechanical Engineering (iii) Electrical Engineering (iv) Electronic Engineering (including Safety and Security) (v) Fire Protection Engineering (vi) Structural Engineering (vii) Civil Engineering

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1. Electricity metering

Collecting of data starts with the installation of electricity metering devices at selected positions in the client’s plant/building/premises. The positioning of meters is important as it will tell us more about the client’s process and consumption behaviour.

We provide a total metering solution involving Automatic Meter Reading (AMR) based on remote meter reading technology. This could be expanded to include Advanced Metering Infrastructure (AMI), which is generally associated with smart metering.

We’ll recommend d the correct device(s) to be installed as well as the most appropriate communications technology to be employed. Data collected in this way will stored in the cloud and be available to the client. We provide a “hosted” meter data service at a small monthly fee.

2. Energy Audits

An energy audit is normally conducted by a Certified Energy Manager (CEM) and is done in conjunction with a qualified representative of the client. The purpose of the audit is to determine energy usage behaviour of the client. During such an audit 5 questions will be asked:

Q1: How much energy is consumed? Q2: Where is it consumed? Q3: How is it consumed (processes)? Q4: When is it consumed? Q5: What is the quality of energy consumed?

The auditor (CEM) will also verify what the minimum energy requirements are for relevant processes which are targeted for possible demand interventions. See section 5 & 6 below.

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With the information obtained in sections 1 & 2 above, it is possible to “rank” the various process of the client in terms of their energy efficiency. Various ranking systems and indication may be used, dependent on their applicability. Internationally various coded symbol systems are used. The obvious intention is to improve the client’s ranking.

DLV will submit an energy report for the client’s consideration which will detail the proposed interventions, including the cost thereof and how it could be financed.

3. Load profile data analysis

Reading data from measurement devices is a relatively common skill in the electrical industry. Analysing the data and be able to “read” the energy and demand savings opportunities from the available data is a scarce skill. DLV is able to convert data into useful information, and to draw inferences, later to be used to derive a practical demand intervention strategy.

Load curves are analysed for the effect of public holidays, annual maintenance shutdowns, changes in seasons, weather and other factors. One first have to understand the load curve however complex it may be, before attempting to develop demand management interventions.

Another important aspect to consider is the various prices paid for electricity consumed during a 24-hour period. This is referred to as Time-of-use tariffs (ToU).

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It should be clear why the presentation of a power bill is not enough for any decisions to be made related to possible savings. DLV can help you to make sense of all of this.

4. Supply tariff analysis

There are more than 2,000 approved electricity tariffs in South Africa. Each one of the 245 licensed supply authorities (including ESKOM) developed their own electricity supply pricing structures. Some of these tariffs or pricing structures date back to 5 or 6 decades ago. It could be possible that your business is on the wrong tariff.

DLV will be able to advise you on the correctness of the current tariff and if not, assist with the application to the supply authority to convert to a more appropriate tariff.

We are also able to analyse your load profile against the prevailing ToU tariff as indicated in the diagram below. This analysis will give a clear picture of the cost distribution of your consumed energy and could result in recommendations that will see you decreasing your electricity bill by simply moving loads from “expensive” times tom “cheaper” times of the day.

At this point, DLV and the client will have all the information required to move to the next phase, i.e. to develop interventions that will reduce the cost of electricity.

5. Energy efficiency interventions

Energy Efficiency refers to actions taken that will reduce the consumption of energy but still deliver the same product, service or outcome. The reduction of energy usage is permanent, i.e. it is not moved to another time period. Energy thus saved has a direct financial benefit.

Energy efficiency is also referred to as energy conservation. Load is consistently reduced over a 24-hour period

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Energy reduction can be achieved through technology such as Variable Speed Drives and LED lighting as well as process changes or changes in behaviour. DLV will advise on the most cost effective interventions

DLV will be advise on the most cost effective energy efficiency intervention(s) and will ensure the effective implementation of such interventions.

6. Load Management interventions

Load management is another member of the family of Demand Side Management (DSM) interventions. Load management differs from energy efficiency in that it involves making changes to processes that require to be controlled or “managed”. Load is either removed during a particular time period, or it is moved from one period to another.

Such movement of load is not permanent but can be automated. DLV will be advise on the most cost effective load management intervention(s) and will ensure the effective implementation of such interventions.

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Once the recommendations as contained in the audit report are accepted by the client (after consultations and changes made), they are implemented using skilled contractors who specialise in their respective fields.

A further service is provided which includes the ongoing monitoring and evaluation of the performance of the various interventions. These interventions are to be designed to:

Reduce the cost of energy to a customer Increases the effective and efficient use of energy Results in a financial benefit to the customer Protects the customer’s revenue

7. Own power generation

The most cost effective power generation source is “saving electricity”.

Before consideration is given to your own power source, it is critical to optimise the load profile first. DLV will not propose a power solution if there is still Potential for load reduction.

Depending on the client’s processes and load profile as well as the availability of raw energy sources, DLV will recommend an appropriate alternative power source. Such recommendation will be based on sound economic principles and will take cognisance of the client’s financial situation.

Own power generation could either be base load (typically a diesel generator) or load following. Sources of power could include one or more of the following:

In addition to a diesel generator: Renewable Energy (PV, wind, biomass, biogas etc.) Heat recovery, cogen, trigen and CHP Natural gas, CNG, LPG, Syngas etc.

If circumstances permit, a combination of the above could be implemented, i.e. a hybrid system. Such hybrid systems are commonplace in Subs Sahara Africa (SSA): Mainly diesel and PV hybrid systems.

Why putting in a small scale (rooftop) PV system?

Experts predict that the small scale PV market is set to grow exponentially in the next decade and may even surpass the large scale market by a comfortable margin, like in Germany where this has already happened. The main thrust behind this trend is the competitiveness of PV vs grid power. After many years of waiting, the time has arrived for PV power to compete with other conventional sources of power, even at a household level. PV’s competitiveness is driven by three forces:

Solar module production has increased dramatically in order to feed the demand, resulting in improved production efficiencies and cost reduction.

Improvement in solar technology, also driving costs down and efficiencies up.

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Increase in electricity prices due to the increase in production costs and fuel prices. We believe that there are 7 main reasons for our clients to consider a small scale PV system:

1. Grid parity is possible PV costs are less than grid power costs 2. Sharp rise in electricity tariffs to continue 3. Payback periods of 5 years or less 4. The client doesn’t have to buy the system outright, it can be financed 5. Project Funding, incentives and secondary revenue streams 6. The grid tie PV system is one of the key components for a smart grid 7. Net metering is imminent, allowing for the trading of power

DLV will assess the small scale PV potential for the client, do the design, supply material and install/commission the plant. During this process all the necessary permissions will be obtained.

8. Storage systems

These are embedded distributed storage systems which are connected to the distribution or transmission network, owned by redistributors or licensed utilities like Municipalities and those owned by the national utility ESKOM. By “large scale” is meant to be of such scale that could impact on the system performance it is connected to. Electrical networks that are stretched to capacity, i.e. where supply and demand are very closely matched, or even mismatched (supply less than demand) are susceptible to system instability. As power networks became more complex over the years with multiple embedded distributed generation facilities added to the network, utility scale storage became an ever increasing important component of power grids, performing more than one function. A well designed energy storage solution could assist in the stabilisation of a stressed network, negating the need for further generation capacity, additional power lines or active network management components to be installed. DLV will advise on the correct storage technology and its application, which will improve the client overall power supply experience.

9. Uninterruptible power supplies (UPS)

We all know UPS’s used in your office or home environment. Such systems

range from relatively small sizes (a few VA) to large units (50 kVA or more). These units come complete with inverter/charger/controller and batteries. Some units have the option to increase the battery size. The battery remains in the power delivery circuit at all times.

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The UPS systems referred to here are for large scale industrial use and could be as high as 1MW and more. The system is built up using 4 main components: (i) Charge controller, (ii) Inverter, (iii) micro grid controller and (iv) storage system. The power delivery duration of such a system could be 8 hours or more.

The application of a large scale UPS is aimed at manufacturing enterprises where power interruptions, even for a few seconds, could be harmful to CNC machines and could result in breakages and product scrapping. Rotary UPS’s, super capacitors, Super Conductor Magnetic coils and other mechanical storage devices also fall in the category.

10. Smart Micro Grid

A system as described above (UPS), if combined with other sources of supply and some system control technology, is essentially a smart micro grid. Smart micro grids can be grid tied or grid independent (off-grid). Application of these systems are found in remote areas e.g. mines. They are also used in industrial and commercial parks or campuses.

A typical smart micro grid comprises:

A grid connection (or not if off-grid) At least two independent power sources A back-up power source A micro grid controller Load management system or BMS An Energy Storage System (ESS) with charge controller

The smart micro grid must ensure zero effect of grid supply interruptions on operations. The cost equation therefore involves a comparison between the opportunity cost of loss of production vs the cost of the alternative power supply.

A consumer that is adversely affected by power interruptions will most probably be more susceptible to an alternative power supply which make it less dependent on grid supply, thereby negating the effect of interruptions. In this case, the cost of the alternate supply is not compared to grid tariffs, but rather to the loss of revenue as a result of the interruption.

This is referred to as security of supply.

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11. Off grid power supply

The ultimate goal for any electricity consumer is to have security of supply, at an economically viable price. If grid supply can guarantee this, then there is no reason to move to an alternative supply, but if it doesn’t then one enters the realm of a multitude of options, varying from the simple to the most complex.

On the lower end of the complexity scale, an inexpensive standby generator (manually operated) could do the trick. For larger users such as large commercial/industrial consumers and mines, the generators may be larger and generally of a better quality, (hence more expensive).

The cost of running a diesel generator 27/7 is prohibitively expensive. Being off-grid brings its own challenges. The power source has to be reliable (available and of good quality) and of such cost that it makes economic sense. DLV will be able to find the right mix of power sources at the right price (Capex as well as Opex) which will improve the client’s financial position.

12. Power export and trading

Once an investment is made in an own power plant such as a small scale PV system, there may be an appetite to expand the system and to generate more power than what is consumed. The obvious question to ask then is: Who will buy my excess power and at what price? There are a few options:

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To sell to the local supply authority (Municipality or ESKOM) To store power in a battery or ESS To sell to other customer on another part of the network or the country

DLV can be of assistance in all three instances. A small but very active market exists in South Africa where electricity is traded on a voluntary buyer – voluntary seller basis. DLV knows this market very well and can advise its clients on how to participate. We’ll be able to obtain the necessary permissions and set up the trading platform. However, not all our clients will qualify to participate. The trading transaction is simple:

The trader buys kWh’s from an IPP at an agreed price The trader pays the network owners an “access charge”, i.e. ESKOM and the NMBM The trader sells at the prevailing customer tariff The difference is the trader’s Gross Margin.

Currently there are IPP’s that are able to sell at less than R1-00/kWh and customers that are paying more than R1-50 kWh. The access charges are in the vicinity of 20-30 c/kWh. The GM is therefore around 20-30 c/kWh.

13. Utility Management

There are a large number of Municipalities in SA that are struggling to manage their electricity businesses, and are frequently pointed out for their poor financial reports. The aim is therefore to develop an integrated solution to assist such Municipalities to improve their financial results by offering to become the de facto electrical department of the Municipality. The assets will still belong to the Municipality but the appointed utility management agent will take care of the assets at its own cost, using the revenue that it collects to cover such costs. An integrated solution will include:

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Electricity metering, billing and revenue collection, either AMR or AMI including pre-payment vending

Network expansion (planning, design and construction) Network maintenance & management (preventative, routine and breakdown) Workforce Management Financial reporting to the Municipality or body corporate Disconnections and re-connections Reporting to NERSA, compulsory annual reports for licensees

14. Power project financing

DSM and EE interventions should pay for itself, i.e. the “savings” achieved by the intervention should more than pay for the intervention itself. Theoretically clients should not be out of pocket as a result of the intervention (from day one…). This may not be a realistic expectation, depending on the intervention and the funding solutions that are available, such as: SARS 12l, regulation R. 971

In terms of the regulation, the tax liability of a client is reduced, based on proven energy savings achieved through specific interventions. Although limited, this could mean a significant cash flow benefit for the client, especially in year1. The application process and administration thereof is offered as a service.

Department of Trade and Industry (DTI) incentive programmes

A number of grant funding programmes are offered by the DTI which includes the Manufacturing Competitive Enhancement Programme (MCEP). The application process and administration thereof is offered as a service.

Other funding Putting a funding deal together, structuring the project such that risks are apportioned with maximum benefit to the project owner. Developing a project funding model as opposed to a pure corporate financed solution. Addressing aspects such as the SPV, equity finance and gearing, credit risk, guarantees, taking the project to bankable feasibility and eventually to financial close.

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Where required, application will be made for funding from commercial banks as well as special funding sources such as grant funders, FDI’s and Development Banks. In particular, the Power Africa resources will be targeted.

In summary

DLV is a multidisciplinary consulting engineering firm. We are committed to

Enhancing the professional and business interests of its clients Serving clients with professionalism, integrity and independence of judgement Improving the quality of life for all people by the promotion of engineering excellence

The main objective of DLV is two-fold:

To be market leaders and experts in each discipline by being innovative and by applying the latest technology and knowledge to each project.

To apply the knowledge and expertise in each discipline in such a way and under the leadership of a strong project management team, to arrive at the overall optimum and most economical design that will be of total benefit to the client over the full life of the facility, thus adding value for clients. Emphasis is placed on designs that will result in the lowest life cycle costs while still complying with the client’s functional requirements.

In addition to the services which are expected of an engineering firm with a global footprint, we now offer services related to Energy and Power. Services related to:

The collection and analysis of metering data, energy audits and recommendation for action Energy Efficiency and Load management interventions, design and implementation Generation of own power including rooftop PV systems Implementation of smart micro grids, hybrid systems and off grid power supplies The export and trading of excess power Utility management Funding all of the above

Please contact Kobus Morgan at DLV Engineers for a presentation or quote.

012 342 5300 or 083 325 3729 or e-mail: kobus@dlvafrica.co.za