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Energy Wheeling Viability of Distributed Renewable Energy for Industry

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Energy Wheeling Viability of Distributed Renewable Energy for Industry ENERGY WHEELING VIABILITY OF DISTRIBUTED RENEWABLE ENERGY FOR INDUSTRY by WILLIAM NORMAN MURRAY Thesis submitted in fulfilment of the requirements for the degree Master of Engineering: Electrical Engineering in the Faculty of Engineering at the Cape Peninsula University of Technology Supervisor: Dr. Marco Adonis Bellville Date submitted: August 2018 CPUT copyright information The dissertation/thesis may not be published either in part (in scholarly, scientific or technical journals), or as a whole (as a monograph), unless permission has been obtained from the University DECLARATION I, William Norman Murray, declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the Cape Peninsula University of Technology. Signed Date ii ABSTRACT Industry, which forms the lifeblood of South Africa’s economy, is under threat as a result of increased electricity pricing and unstable supply. Wheeling of energy, which is a method to transport electricity generated from an Independent Power Producer (IPP) to an industrial consumer via the utility’s network, could potentially address this problem. Unlike South Africa’s electricity landscape, which is highly regulated and monopolized by Eskom, most developed countries have deregulated their electricity market, which has led to greater competition for electricity supply. This thesis, presents an evaluation of the economic viability and technical concerns arising from third party transportation of energy between an IPP and an industrial consumer. IPP’s are able to generate electricity from various renewable distributed generation (DG) sources, which are often physically removed from the load. In practice, electricity could be generated by an IPP and connected to a nearby Main Transmission Substation (MTS) in a region with high solar, wind or hydropower resources and sold to off-takers a few hundred kilometres away. Using two software simulation packages, technical and economic analysis have been conducted based on load data from two industrial sites, to determine the viability of wheeling energy between an IPP and off- taker. The viability will be evaluated based on levelized cost of electricity (LCOE); net present cost (NPC); DG technology; distance from the load; available renewable resources; impact on voltage profile, fault contribution, thermal loading of the equipment and power loss. The results from both case studies show that the impact of DG on the voltage profile is negligible. The greatest impact on voltage profile was found to be at the site closest to the load. Asynchronous and synchronous generators have a greater fault contribution than inverter-based DG. The fault contribution is proportional to the distance from the load. Overall, thermal loading of lines increased marginally, but decreased based on distances from the load. Power loss on short lines is negligible but there is a significant loss on the line between the load and DG based on the distance from the load. Electricity generated from wind power is the most viable based on LCOE and NPC. For larger wind systems, as illustrated by the second case study, grid parity has already been reached. Wheeling of wind energy has already proven to be an economically viable option. According to future cost projection, large scale solar energy will become viable by 2019. iii The concept of wheeling energy between an IPP and off-taker has technical and economic merit. Wheeling charges are perceived to be high, but this is not the case as wheeling tariffs consist of standard network charges. In the future, renewable energy will continue to mature based on technology and cost. Solar energy, including lithium-ion battery back-up technology, looks promising based on future cost projections. Deregulation of the electricity market holds the key to the successful implementation of energy wheeling as it will open the market up for greater competition. iv ACKNOWLEDGEMENTS I would like to express my sincere gratitude to my supervisor, Dr. Marco Adonis, for the guidance during this research. Your help in making sure that the objectives of the research were well constructed and coherent is highly valued. I am very grateful for the time spent in reading the document and your valuable feedback and suggestions. I would like to thank my employer, Actom Electrical Products for supporting my ambition to undertake this research. I want to especially thank my CEO for the financial support. The financial assistance of the National Research Foundation towards this research is acknowledged as well. Lastly, but most importantly, I want to thank my darling wife, Nikki, parents-in-law, and my two beautiful daughters, Bella and Sienna for the emotional and moral support when I needed it the most. I owe everything I’ve achieved to my loving wife and daughters. v DEDICATION To My darling wife, Nikki and Our beautiful daughters, Bella and Sienna vi TABLE OF CONTENTS DECLARATION ..................................................................................................................... ii ABSTRACT ........................................................................................................................... iii ACKNOWLEDGEMENTS ...................................................................................................... v DEDICATION........................................................................................................................ vi LIST OF FIGURES ............................................................................................................... xi LIST OF TABLES ................................................................................................................ xiii GLOSSARY ......................................................................................................................... xv CHAPTER ONE ..................................................................................................................... 1 INTRODUCTION ................................................................................................................... 1 1.1 Introduction .............................................................................................................. 1 1.2 Background ............................................................................................................. 1 1.3 Research problem statement ................................................................................... 3 1.4 Research questions ................................................................................................. 4 1.5 Significance of research........................................................................................... 4 1.6 Aims and objectives ................................................................................................. 4 1.7 Methodology ............................................................................................................ 5 1.8 Outline of the thesis ................................................................................................. 5 CHAPTER TWO .................................................................................................................... 6 LITERATURE REVIEW ......................................................................................................... 6 2.1 Introduction .............................................................................................................. 6 2.2 The Industrial Sector ................................................................................................ 6 2.2.1 Overview .......................................................................................................... 6 2.2.2 Energy Landscape ............................................................................................ 7 2.2.3 Mining ............................................................................................................... 8 2.2.4 Iron and Steel ................................................................................................... 9 2.3 Distributed Generation ........................................................................................... 10 2.3.1 Solar Photovoltaic ........................................................................................... 10 2.3.1.1 PV Systems ............................................................................................. 10 2.3.1.2 PV Potential ............................................................................................. 12 2.3.2 Concentrated Solar Thermal Power ................................................................ 13 2.3.3 Wind Energy ................................................................................................... 14 2.3.3.1 Wind Systems.......................................................................................... 14 2.3.3.2 Wind Potential ......................................................................................... 15 2.3.4 Battery Energy Storage Systems .................................................................... 15 2.3.4.1 Battery technologies ................................................................................ 16 2.3.5 Hydropower .................................................................................................... 16 2.3.5.1
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