INDUSTRY WATCH
How microgrid ’ s can help you manage peak consumption tariffs
If 2023 has taught us anything , is that the energy landscape is dynamic , robust , and versatile . South Africa and , in fact , the world are at historic juncture with business and consumers alike implementing alternative energy technologies to meet their daily demands .
Nishandra Baijnath , Systems Architect , Power Systems , Anglophone Africa , Schneider Electric rolled out aiding in a subsequent rooftop solar boom . A country that was once heavily dependent on coal for electricity generation now has more than 101,000 rooftop installations on homes , offices and factories , creating a 25-fold increase in its solar generating capacity in just one-year according to the World Economic Forum .
As a result , Vietnam was one of the fastest growing renewable energy markets in Asia , all because of a well-priced and structured national feed-in tariff .
One such option , that is undoubtedly gaining exciting traction , is the microgrid , offering a wide range of capabilities that benefit specific energy goals and resultant business strategies .
Microgrids have the potential to meet the needs of various industries and sectors . It allows businesses to generate electricity onsite , use it when needed and potentially sell excess power back to a relevant utility .
Microgrids allow businesses to address a major concern , the variability and downright unpredictable nature of energy costs . Onsite renewable energy resources , such as wind farms , solar panel arrays , and battery storage systems , take these variable costs out of the equation .
A microgrid could be a cost-effective alternative or addition to a business ’ energy mix if current power purchase agreements , PPAs cannot guarantee a competitive rate per kWh .
As a practical example , local power suppliers categorise commercial buildings based on peak demands . If a business is identified as a tier-2 customer , with a potential 10-kW peak demand , the utility must be prepared to supply that amount .
This economic feasibility of selling excess solar power back to the grid needs careful consideration . The true potential of solar energy lies not only in its environmental benefits but also in its ability to provide tangible economic returns to households .
Drawing inspiration from the telecommunications industry , where the distribution and infrastructure operate symbiotically , could be a model to be replicated in our energy sector . This approach would streamline the government ’ s focus towards transmission while private entities manage generation , creating a more sustainable and economically viable ecosystem .
South Africans are understandably frustrated by load shedding and the ever-increasing electricity costs . Given the negative impact on daily life , from commuting to cooking dinner and having less discretionary income , it is easy to forget that other countries are , or will likely face national energy shortages of their own in the future .
This entails expanding the grid , adding substations , and laying more cables , all of which come at a cost . Unfortunately , businesses are often placed in a tariff bracket with a higher , allocated peak demand , irrespective of their actual loads , leading to higher monthly energy bills . This base cost for the allocated peak demand is in most cases more than the effective power consumed on their energy bill .
Here , microgrids can play in important role . When implementing a microgrid , service providers will work closely with customers to identify essential and non-critical loads . Microgrids allow businesses to implement a strategic load management plan which , in turn , reduces the peak demand .
For example , if your peak demand is six kilowatts due to simultaneous activation of multiple loads , the microgrid controller system can deliver a staged activation process . This means businesses can strategically schedule the activation and deactivation of loads , lowering overall energy costs .
Peak demand is a key component of an organisation ’ s allocated tariff , and by managing it effectively , businesses can position themselves in a lower-cost bracket .
Whether through failure to meet ordinary consumer demand or unfortunate external factors , reliance on non-renewable energy is not without risk anywhere in the world . The aftermath of pandemic in 2021 was quickly followed by the war in Ukraine and now Israel , which has led to a widespread global energy crisis where many major economies had to contend with shortages and increased prices in oil , gas , and electricity markets .
There is an opportunity for a South African vision that goes beyond solving the current energy crisis and transforming it into an opportunity . There is a chance to demonstrate how sustainable energy solutions can be implemented effectively at a household level and contribute positively to the country ’ s economic and social well-being .
The private sector , along with forward-thinking policy measures , can pave the way towards a more sustainable and resilient energy future . p
66 INTELLIGENTCIO AFRICA www . intelligentcio . com