kevin minkoff edf renewables - windaba

Grid Access & New Business Models for RPPsKevin Minkoff -- Windaba

7 November 2018

2

SUMMARY

1. EDF EN Group Overview

2. Connection Charges

3. New Business Models for RPPs

3

1. EDF EN Group Overview

An expertise in multiple segments An international footprint

South African Activities

224,000

countries

employees

25 employees107 MW

34 MW

PE and Cape Townoffices

under construction

GENERATION ACTIVITY

Developed, built and operational

Wind energyOnshore & offshore

Solar energyPV

Other segments+ Energy storage+ Marine energy+ Biomas/biogas

11.8 GW

Global Installed

CapacityCOUNTRY PRESENCE

10 yearsEstd. 2008 in South Africa

4

2. Connection Charges

Current Philosophy

• Connection charge (shared assets)

= R/kVA charge * project MEC

• R/kVA charge = [Cost of shared assets] /

[installed capacity of equipment]

• All connections considered « equally »

*Eskom graphic

5

2. Connection Charges

Current Philosophy

• No consideration for:

• Project location

• Existing minimum load

• Existing equipment (where no upgrade required)

• Opportunity to optimise generators’ location on network by

incentivising projects that:

• Reduce network losses (by reducing load)

• Improve network stability

• Delay or avoid need for network upgrades

• Can connect faster (by using existing infrastructure)

6

3. New Business Models

for RPPs

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3. Business Models for RPPs

Centralised – Single Buyer

kWh

$$

• E.g.: REIPPP

• Pros:• Bankable• Low IPP risk• Lowest tariffs

• Cons:• Central procurement• Possible conflict

(utility = buyer)

IPP OFFTAKERSUTILITY

kWh

$$

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3. Business Models for RPPs

Distributed – Captive

kWh kWh

$$ $$

IPP OFFTAKER UTILITY

(optional)

• E.g.: Rooftop, mines…

• Pros:• Easy / quick to deploy• No network charges• Enabling legislation

• Cons:• Site limitations• High offtake risk• Higher LCOE• Difficult to regulate• No network charges

9

3. Business Models for RPPs

Distributed – Wheeled

kWh

$$

IPP OFFTAKERUTILITY

kWh

$

• E.g.: Google datacenters

• Pros:• Low LCOE• PPAs don’t sit with utility• Tolling fee for utility

• Cons:• Network charges• Regulatory framework

lacking

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3. Business Models for RPPs

Distributed – Wheeled: US Market Growth

Over ¾ of thesedeals concernWind Farms

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3. Business Models for RPPs

Summary

Single Buyer* Captive Wheeled

Rapidity to deploy

Utility connection

Network charges

LCOE

Wind compatible

Regulatory status

Risk to IPP

Risk to Utility

*Utility / Eskom« REIPPP » « Embedded Generation »

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3. Business Models for RPPs

Conclusion

• Different models serve different purposes and technologies

• Diversity = risk management

• Wheeling = risk shifted from utility to the IPP / C&I offtaker

• Need to update regulatory framework to ensure wind isn’t excluded

from IRP embedded generation allocations (200MW / annum)

• Grid codes / rules need to align with RE policy objectives

Thank You