13 November 2012 – Smart grids in South Africa will allow for control of peak hour demand, without having to increase generation capacity. However, the implementation thereof will require a substantial amount of financial support from government. The country can learn many valuable lessons from other international installations to formulate an implementation scheme that focuses on its existing strengths.

The need for smart grid technology in South Africa is driven by the low reserve margin on the country’s electricity generation capacity, the need for a more efficient grid with less disruptions, an increase in the electricity price, the consumers’ need for an efficient method of electricity consumption management and the IRP 2010, a 20-year national electricity plan that stipulates the key generation plan for the country.

“Effective smart grid implementation will offer many benefits for electricity producers, distributors and the consumers,” Frost & Sullivan’s business unit leader for energy and power Africa, Cornelis van der Waal, says. “For the project to be successful, and result in a positive relationship between the project planning committee and the end users, it is of utter importance that it be mapped out correctly to avoid any unnecessary and awkward setbacks, as have been experienced in some projects internationally.”

Five case studies of smart grid implementations across the world – US, Australia, Italy and South Korea – highlight the importance of having a clear vision and a project plan. Experts in different fields from these nations could impart their knowledge to South Africa on financial and technical strategies and how to effectively adapt existing policies and regulations. This will give the local government and utilities the tools required to implement a successful project.

“In South Africa various demonstration projects have been initiated. It is critical that any large scale roll out is aligned with international best practice to ensure success,” van der Waal says. “In doing so, models dealing with issues such as cost, sustainability and security, will help establish the best fit for the South African system.”

Restraints to the process will come from the lack of skills in the country regarding smart grid technology, financial constraints and large investment required for smart grid projects, as well as the need for government to implement policies and regulations.

“Initial costs for the deployment of smart grids are high. It is essential that there is a drive from government to fund the projects partially, for these to be implemented.Government and industry also need to establish protocols and evaluate strategies according to key priorities. Definitions and standards need to be developed for equipment, data transport and cyber security.”

Furthermore, it is important to include a technology assessment, cost benefit analysis and detailed project implementation plan in the project design. This will be crucial to ensure that the project is completed on time and within budget.

Once smart grids are implemented, consumers can be encouraged to use electricity during off peak hours, which will result in a more stable demand curve. Advanced metering technologies will also enable an easier method of incorporating centralised power to the grid using two-way metering and sensors. Finally, smart grids will give the consumer the opportunity to monitor their electricity usage and control the amount of money they spend on their electricity bills each month.