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Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
I
Consolidated Report on the Findings of the
Electricity Generation Industry Compliance
Audits Conducted in 2016/17
Financial Year
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
I
All enquiries and correspondence to be directed to the Head of Department unless
indicated otherwise by means of a formal letter signed by the Head of Department:
Electricity Licensing, Compliance and Dispute Resolution.
Tel : +27 (0)12 401 4794
National Energy Regulator
Kulawula House
526 Madiba Street
Arcadia, Pretoria
0083
PO Box 40343
Arcadia
0007
Tel : +27 (0)12 401 4600
Fax : +27 (0)12 401 4700
Website : www.nersa.org.za
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
II
TTAABBLLEE OOFF CCOONNTTEENNTTSS
ABBREVIATIONS ............................................................................................................ III
DEFINITIONS .................................................................................................................. IV
EXECUTIVE SUMMARY .................................................................................................. VI
1. INTRODUCTION .................................................................................................... 1
2. AUDIT OBJECTIVES ............................................................................................. 3
3. AUDIT PROCESS .................................................................................................. 3
4. AUDIT METHODOLOGY ....................................................................................... 4
5. SCOPE OF WORK ................................................................................................. 4
6. CHALLENGES FOR THE SOLAR FARMS ............................................................ 5
7. FACTS AND FIGURES .......................................................................................... 5
8. SUMMARY OF OBSERVATIONS AND AUDIT FINDINGS .................................... 6
8.1 ELECTRICITY GENERATION LICENCE...................................................................... 7
8.2 DISTRIBUTION INFORMATION EXCHANGE CODE ..................................................... 8
8.3 DISTRIBUTION NETWORK CODE ........................................................................... 9
8.4 THE GRID CONNECTION CODE FOR RENEWABLE POWER PLANTS ........................ 10
8.5 DISTRIBUTION SYSTEM OPERATING CODE .......................................................... 11
8.6 GENERATION MAINTENANCE STRATEGY ............................................................. 11
8.7 PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS) ................... 12
8.8 OUTAGE MANAGEMENT ..................................................................................... 12
8.9 ASSET MANAGEMENT ........................................................................................ 13
8.10 REFURBISHMENT AND EXPANSION PLANS ........................................................... 13
9. PLANT INSPECTION ........................................................................................... 13
9.1 SCOPE OF PLANT INSPECTION ........................................................................... 13
9.2 ON-SITE OBSERVATIONS .................................................................................... 13
10. CONCLUSION...................................................................................................... 19
11. RECOMMENDATION ........................................................................................... 20
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
III
AABBBBRREEVVIIAATTIIOONNSS
DoE Department of Energy
DCUOSA Distribution Connection Use of System Agreement
GCR Grid Code Requirement
HV High Voltage
MW Megawatt
MV Medium Voltage
NERSA National Energy Regulator
OEM Original Equipment Manufacturer
PPA Power Purchase Agreement
SAGC South African Grid Code
SAP System Application and Production
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
IV
DDEEFFIINNIITTIIOONNSS
Buyer
The legal entity designated by the Minister in the Determination as the buyer of Energy
from Sellers in terms of Power Purchase Agreements entered into pursuant to the
Independent Power Producer Procurement Programme.
Distributor
A legal entity that owns or operates/distributes electricity through a Distribution System.
Distribution System
An electricity network consisting of assets operated at a nominal voltage of 132 kV or less.
Generator
A legal entity licensed to engage in the production of electricity through an electricity
generation facility.
Grid Code
The ‘South African Grid Code’, which consists of the following documents, as approved by
NERSA and updated from time to time by the Secretariat:
Preamble;
Governance Code;
Network Code;
System Operation Code;
Metering Code;
Tariff Code; and
Information Exchange Code.
It also includes the Distribution Code, which consists of the following:
Distribution Code Definitions;
Distribution Information Exchange;
Distribution Network Code;
Distribution System Operation Code;
Distribution Metering Code; and
Distribution Tariff Code.
Licensees
AE-AMD Independent Power Producer 1 (Pty) Ltd;
Core Energy (Pty) Ltd;
CPV Power Plant no.1 (Pty) Ltd;
Droogfontein Solar Power (RF) (Pty) Ltd;
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
V
De Aar Solar Power (RF) (Pty) Ltd;
Firefly 253 Investments (Pty) Ltd;
Oakleaf Investments Holdings 79 (Pty) Ltd;
RustMo1 Solar Farm (Pty) Ltd;
Slimsun (Pty) Ltd;
Solar Capital De Aar (Pty) Ltd;
Sevenstones 159 (Pty) Ltd; and
Scatec Solar SA 166 (Pty) Ltd.
Solar Farm
The licensed Photovoltaic (PV) power generation facility.
System Operator
A legal entity licensed to be responsible for short-term reliability of the interconnected
power system, which is in charge of controlling and operating the transmission system
and dispatching generation (or balancing the supply and demand) in real time.
Transmission System
The transmission system consists of all lines and substation equipment where the nominal
voltage is above 132 kV. All other equipment operating at lower voltages are either part of
the distribution system or classified as transmission transformation equipment.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
VI
EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY
The Electricity Regulation Act, 2006 (Act No. 4 of 2006) (‘the Act’), stipulates that the
Regulator must enforce performance, compliance and take appropriate steps in the case
of non-performance.
Pursuant to Section 4(a)(vii) of the Act, all licensed entities are subject to an audit for
compliance with licence conditions imposed by the Energy Regulator. The audit objectives
are to assess compliance with applicable regulatory requirements, validate evidence of
self-reported non-compliances, document the licensees’ compliance level and plans, and
monitor the implementation of corrective action plans.
There are approximately 150 electricity generation licensees; the state-owned entity,
municipal generation, and independent power producers. The total number of licensed
generation facilities consists of about 305 operational, 7 non-operational or
decommissioned and 27 new-build facilities. The total capacity is apportioned as follows:
operational capacity is about 52 133MW, decommissioned capacity is 1 058MW and
capacity under construction equates to 10 979MW. The selection criteria for the
representative sample of generation facilities audited is based on:
the type of licensee, for example municipal generators may be audited together so as
to establish common practices and challenges;
information submitted to NERSA through G-forms, production figures or any other
forms;
the audit cycle in terms of the compliance framework;
the power contribution or impact of the generation facility on the national grid;
research or data collected through desktop monitoring or media; and
a mixture of age, type of technology and location.
The twelve licensees that were audited in the 2016/17 financial year operate Photovoltaic
(PV) solar farms and supply power to the grid. All licensees are part of the Department of
Energy (DoE) Renewable Energy Independent Power Producer procurement programme,
which was initiated by the Ministerial Determination issued by the Minister of Energy on 02
July 2011. Table 1 shows a list of licensees that were audited.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
VII
Table 1: List of licensees audited for 2016/17 financial year
Licensee Solar Farm Name Contracted
Capacity in MWh
Audit Date
AE-AMD Independent Power
Producer 1(Pty) Ltd
Greefspan PV
Power Plant
9.9 27 September
2016
Core Energy (Pty) Ltd Witkop Solar Park 30 19 July 2016
CPV Power Plant no.1 (Pty) Ltd CPV Power Plant
No 1
36 27 October 2016
De Aar Solar Power (RF) (Pty)
Ltd
De Aar Solar Power 45.6 24 August 2016
Droogfontein Solar Power (RF)
(Pty) Ltd
Droogfontein Solar
Power
48.5 23 August 2016
Firefly 253 Investments (Pty) Ltd Letsatsi Solar PV
Power Station
64 14 July 2016
Oakleaf Investments Holdings
79 (Pty) Ltd
Lesedi PV 64 07 September
2016
RustMo 1 Solar Farm (Pty) Ltd RustMo1 Solar
Farm
6.93 07 September
2016
Scatec Solar SA 166 (Pty) Ltd Kalkbult 75 25 October 2016
Sevenstones 159 (Pty) Ltd Aries Solar PV
Facility
10 29 September
2016
SlimSun (Pty) Ltd Slimsun Swartland
Solar Park
5 21 June 2016
Solar Capital De Aar (Pty) Ltd Solar Capital De
Aar
75 30 August 2016
The two-fold audit included a compliance assessment and plant inspection. The audited
licensees are in compliance with the licence conditions. Table 2a and 2b below represent
a snap-shot of the compliance status of the licensees.
Table 2a: A snap-shot of compliances
Compliance requirement Licensees’ compliance status
8.1 Compliance with Electricity Generation Licence
All Licensees have valid electricity
generation licences and comply with
licence conditions, such as to submit
production figures for the solar farms in
a manner prescribed by NERSA, and
submitted audited financial statements
for the 2014/15 financial year.
8.2 Compliance with the Distribution Network Code
All Licensees have a maintenance
agreement in place which details the
responsibility of the Licensee and the
Distributor for equipment at point of
connection.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
VIII
Table 2b: A snap-shot of non-compliances
Compliance requirement Licensees’ compliance status
8.5 Compliance with the Distribution System Operating
Code
Approximately 30% of the Licensees do
not have a procedure for fault reporting
and incident investigations and 15% do
not have a procedure for outage
scheduling.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
1
11.. IINNTTRROODDUUCCTTIIOONN
The National Energy Regulator (NERSA) derives its mandate to conduct compliance
audits for licensed electricity Generators from the Electricity Regulation Act, 2006 (Act
No. 4 of 2006) ('the Act'). The Act empowers the National Energy Regulator as the
custodian and enforcer of the regulatory requirements.
The Regulator is empowered to execute functions such as to enforce performance
and compliance, and take appropriate steps in the case of non-performance.
There are approximately 150 electricity generation licensees, including the state-
owned entity, Eskom, municipal generation, and independent power producers. The
total number of licensed generation facilities consists of about 305 operational, 7 non-
operational or decommissioned and 27 new-build facilities. The total capacity is
apportioned as follows: operational capacity is about 52 133MW, decommissioned
capacity is 1 058MW and capacity under construction equates to 10 979MW. The
selection criteria for the representative sample of generation facilities audited is based
on:
the type of licensee, for example municipal generators may be audited together so
as to establish common practices and challenges;
information submitted to NERSA through G-forms, production figures or any other
forms;
the audit cycle in terms of the compliance framework;
the power contribution or impact of the power station on the national grid;
research or data collected through desktop monitoring or media; and
a mixture of age, type of technology and location.
In the 2016/17 financial year, NERSA conducted audits for the electricity generation
industry, specifically the renewable power plants operated by Independent Power
Producers (IPPs). All of the licensees that were audited are part of the Department of
Energy (DoE) Renewable Energy Independent Power Producer procurement
programme, which was initiated by the Ministerial Determination issued by the
Minister of Energy on 02 July 2011. Table 3 provides a list of licensees that were
audited in the 2016/17 financial year.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
2
Table 3: The licensees audited in the 2016/17 financial year
Licensee Solar Farm
Name
Capacity in MW Status of the
Solar Farm
Audit Date
Lic
en
sed
Co
ntr
acte
d
AE-AMD
Independent
Power Producer
1(Pty) Ltd
Greefspan PV
Power Plant
10 9.9 Operational 27 September
2016
Core Energy
(Pty) Ltd
Witkop Solar
Park
30 30 Operational 19 July 2016
CPV Power
Plant no.1 (Pty)
Ltd
36 36 Operational 27 October
2016
De Aar Solar
Power (RF)
(Pty) Ltd
De Aar Solar
Power
50 45.6 Operational 24 August
2016
Droogfontein
Solar Power
(RF) (Pty) Ltd
Droogfontein
Solar Power
50 48.5 Operational 23 August
2016
Firefly 253
Investments
(Pty) Ltd
Letsatsi Solar PV
Power Station
64 64 Operational 14 July 2016
Oakleaf
Investments
Holdings 79
(Pty) Ltd
Lesedi PV 64 64 Operational 07 September
2016
RustMo 1 Solar
Farm (Pty) Ltd
RustMo1 Solar
Farm
7 6.93 Operational 07 September
2016
Scatec Solar SA
166 (Pty) Ltd
Kalkbult 75 75 Operational 25 October
2016
Sevenstones
159 (Pty) Ltd
Aries Solar PV
Facility
10.75 10 Operational 29 September
2016
SlimSun (Pty)
Ltd
Slimsun
Swartland Solar
Park
5 5 Operational 21 June 2016
Solar Capital De
Aar (Pty) Ltd
Solar Capital De
Aar
75 75 Operational 30 August
2016
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
3
22.. AAUUDDIITT OOBBJJEECCTTIIVVEESS
All licensed entities are subject to an audit for compliance with licence conditions as
imposed by the Regulator. The audit objectives are to:
assess compliance with the requirements of the Electricity Generation Licence
conditions and the South African Grid Code;
validate evidence of self-reported non-compliances;
document the licensees’ compliance level and plans; and
monitor and enforce the implementation of corrective action plans.
33.. AAUUDDIITT PPRROOCCEESSSS
The compliance audit assessment and site visit serve as an information gathering
process. The information that is collected together with evidence that is submitted by
the licensee is analysed. Subsequently, an audit report detailing the record of
observations, findings and recommendations is compiled for each licensee according
to the number of its generation facilities. The reports are sent to the licensee for
comments. On receipt of the comments, the audit report is finalised and a
consolidated audit report detailing a summary of observations, findings and
recommendations for all the power stations that were audited in the financial year is
prepared for approval by the Energy Regulator. The approved reports are sent to the
licensees, who must develop a corrective action plan to address the findings of the
audit. NERSA then monitors and enforces the implementation of the corrective action
plan to assist the licensees to comply with its licence conditions. The various stages
of the audit process involve the following activities, as outlined in Table 4 below.
Table 4: The various stages of the audit process
Stage 1:
Pre-site visit activities
Establish an audit team.
Establish communication with the licensees to be audited.
Prepare audit questionnaire.
Compile audit programme, agenda, and presentation.
Prepare audit packages.
Travelling to site and logistics.
Stage 2:
On-site visit activities
Presentations detailing the aim of the audit and the audit
process.
Conduct compliance audits assessment on the licensee
and take notes.
Conduct plant inspection.
Stage 3:
Post-site visit activities
Consolidate licensee responses.
Compile licensee individual audit reports.
Send individual audit reports to the audited licensees for
comments.
Incorporate the licensees’ comments and finalised audit
reports.
Compile a consolidated audit report.
Prepare submissions to the Energy Regulator.
Request licensees to submit corrective action plans.
Monitor the implementation of the corrective action plans.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
4
44.. AAUUDDIITT MMEETTHHOODDOOLLOOGGYY
An audit questionnaire is the main document used to facilitate the audit and to
determine the level of the licensees' compliance. It was sent to the licensees before
the day of the audit for preparation. The following documents are the basis for the
audit questionnaire:
the Electricity Regulation Act, 2006 (Act No. 4 of 2006);
the Generation Compliance Monitoring Framework;
the Electricity Generation Licence issued to the licensee;
the National Environmental Management Act, 1998 (Act No. 107 of 1998);
the Occupational Health and Safety Act, 1993 (Act No.85 of 1993);
the Grid Connection Code for Renewable Power Plants connected to the electricity
Transmission System or the Distribution System in South Africa, version 2.8 of July
2014 and
the South African Grid Code (SAGC), version 9.0 of July 2014, including the
Distribution Code, version 6.0 of July 2014.
The questionnaire is divided into 13 sections; the five compliance requirement
sections relate to:
the Electricity Generation Licence conditions;
the South African Grid Code – Distribution Information Exchange Code;
the South African Grid Code – Distribution Network Code;
the Grid Connection Code for Renewable Power Producers; and
the South African Grid Code – Distribution System Operating Code.
The other eight sections of the questionnaire are aimed at establishing whether the
licensees align themselves with the industry standards and best practices with regard
to reliability, safe and sustainable operation of the licensed facilities. The sections are
as follows:
Generation Maintenance Strategy;
Plant Performance;
Outage Management;
Asset Management;
Refurbishment and Expansion Plans;
Environmental Assessment;
Occupational Health and Safety Assessment and
Business Assessment.
55.. SSCCOOPPEE OOFF WWOORRKK
The scope of work involved the activities detailed in Section 3 (‘Audit Process’) of this
report. Table 5 indicates the solar farms that were audited in the 2016/17 financial
year.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
5
Table 5: The solar farms audited in 2016/17 financial year
Licensee Solar Farm Name
AE-AMD Independent Power Producer 1(Pty) Ltd
Greefspan PV Power Plant
Core Energy (Pty) Ltd Witkop Solar Park
CPV Power Plant no.1 (Pty) Ltd CPV Power Plant No 1
De Aar Solar Power (RF) (Pty) Ltd De Aar Solar Power
Droogfontein Solar Power (RF) (Pty) Ltd Droogfontein Solar Power
Firefly 253 Investments (Pty) Ltd Letsatsi Solar PV Power Station
Oakleaf Investments Holdings 79 (Pty) Ltd Lesedi PV
RustMo 1 Solar Farm (Pty) Ltd RustMo1 Solar Farm
Scatec Solar SA 166 (Pty) Ltd Kalkbult
Sevenstones 159 (Pty) Ltd Aries Solar PV Facility
SlimSun (Pty) Ltd Slimsun Swartland Solar Park
Solar Capital De Aar (Pty) Ltd Solar Capital De Aar
66.. CCHHAALLLLEENNGGEESS FFOORR TTHHEE SSOOLLAARR FFAARRMMSS
All licensees are experiencing challenges; some challenges are common to a number
of licensees, whereas others are unique to a particular licensee or solar farm. For
example, a few of the solar farms experienced lightning strikes on the PV modules
and the reason for the incidents is currently unknown. One of the solar farms had a
unique challenge as it was unable to reach its estimated P50 MWh forecast due to
low irradiance.
77.. FFAACCTTSS AANNDD FFIIGGUURREESS
The 12 solar farms supply power up to the contracted capacity that the licensee and
Eskom (‘the Buyer’) agreed on in the Power Purchase Agreement (PPA). The energy
contribution from the audited solar farms is as outlined in Table 6 below.
Table 6: Energy contributed by the audited solar farms in 2014, 2015 and 2016
Name of audited
licensee
Energy generated
(MWh) in 2014
Energy generated
(MWh) in 2015
Energy generated
(MWh) in 2016
AE-AMD
Independent Power
Producer 1(Pty) Ltd
19 012 26 869 27 471
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
6
Name of audited
licensee
Energy generated
(MWh) in 2014
Energy generated
(MWh) in 2015
Energy generated
(MWh) in 2016
Core Energy (Pty)
Ltd
18 431 66 493 64 346
CPV Power Plant
no.1 (Pty) Ltd
6 434 69 050 74 364
De Aar Solar Power
(RF) (Pty) Ltd
83 917 94 368 96 728
Droogfontein Solar
Power (RF) (Pty) Ltd
81 931 94 178 92 889
Firefly 253
Investments (Pty) Ltd
92 236 145 990 143 407
Oakleaf Investments
Holdings 79 (Pty) Ltd
93 324 148 706 150 878
RustMo 1 Solar Farm
(Pty) Ltd
11 811 11 978 12 427
Scatec Solar SA 166
(Pty) Ltd
150 528 143 433 143 531
Sevenstones 159
(Pty) Ltd
21 050 20 256 20 900
SlimSun (Pty) Ltd 0 4 705 10 520
Solar Capital De Aar
(Pty) Ltd
64 777 151 309 111 219
643 451 977 335 948 680
The total power contribution for 2014, 2015 and 2016 was 643 451MWh, 977
335MWh and 948 680MWh respectively.
88.. SSUUMMMMAARRYY OOFF OOBBSSEERRVVAATTIIOONNSS AANNDD AAUUDDIITT FFIINNDDIINNGGSS
Observations and findings related to compliance with the licence conditions, the
South African Grid Code, and best engineering practices were identified and shared
with the licensees. Where applicable, possible options for corrective actions were
discussed with the licensees during the audit process. Furthermore, the individual
audit reports present recommendations to address the audit findings and non-
compliances. Each subheading below briefly discusses the findings and status of
compliance of the licensees.
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
7
In each compliance requirement section, the total compliance rating equates to 100%,
and the compliance rating is apportioned equally according to the number of
compliance items within the section. The outcome compliance status of the licensees
is then graphically represented in Graph 1.
8.1 ELECTRICITY GENERATION LICENCE
The licence conditions stipulate the conditions under which the generation
facility must operate to ensure compliance with the regulatory requirements. It
stipulates that the licensee must maintain separate accounts for the solar farm,
submit annual financial information, production figures and any other
information as prescribed by NERSA. It also states that the licensee must
inform NERSA of any change of company details or the process of generation
or the operational status of the solar farm.
Table 7 below contains a summary of electricity generation licence compliance
requirements and the licensees’ compliance status.
Table 7: Licensees’ compliance status with electricity generation licence
Licence condition
requirement
Compliance
rating (%)
Compliance Status
Compliant Non-
Compliant
Maintain separate accounts and
submit audited financials for the
generation facility.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Submit production figures in a
manner prescribed by NERSA.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Validity of the electricity
generation licence.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Changes of details of licensee.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Changes in operational status or
generation process of the Solar
Farm.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Validity of PPA and contracted
capacity.
16.7
A, B, C, D, E, F,
G, H, I, J, K, L
Total compliance rating 100%(16.7x 6)
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
8
Key to Table 7
A: AE-AMD Independent Power Producer 1(Pty) Ltd
B: Core Energy (Pty) Ltd
C: CPV Power Plant no.1 (Pty) Ltd
D: De Aar Solar Power (RF) (Pty) Ltd
E: Droogfontein Solar Power (RF) (Pty) Ltd
F: Firefly 253 Investments (Pty) Ltd
G: Oakleaf Investments Holdings 79 (Pty) Ltd
H: RustMo 1 Solar Farm (Pty) Ltd
I: Scatec Solar SA 166 (Pty) Ltd
J: Sevenstones 159 (Pty) Ltd
K: SlimSun (Pty) Ltd
L: Solar Capital De Aar (Pty) Ltd
8.2 DISTRIBUTION INFORMATION EXCHANGE CODE
The code defines the reciprocal obligations of parties, the Generator and
Distributor, with regard to the provision of information for the implementation of
the Grid Code. The information requirements are divided into planning
information, operational information, post-dispatch information and treatment of
confidential information. The code requires both the Generator and the
Distributor to designate personnel for information exchange. Table 8 contains a
summary of the licensees’ compliance status with the Distribution Information
Exchange Code.
Table 8: Licensees’ compliance status with the Distribution Information Exchange
Code
Distribution Information
Exchange Code requirements
Compliance
rating (%)
Compliance Status
Compliant Non-
Compliant
Procedures to address the
requirements of the Distribution
Information Exchange Code e.g.
appointment of designated person
to facilitate communication with the
Distributor or Network operator,
method of communication.
25
A, B, C, D, E,
F, G, H, I, J, K,
L
Operational data storage, the
provision of a storage facility,
access control and data retention
period.
25
A, B, C, D, E,
G, H, I, J, K, L
Submission of information to the
Distributor regarding new or altered
equipment at point of connection.
25
A, B, C, D, E,
G, H, I, J, K, L
Commissioning and notification
procedure in place.
25
A, C, D, E, G,
H, I, J, K, L
B
Total compliance rating 100% (25 x 4)
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
9
Key to Table 8
A: AE-AMD Independent Power Producer 1(Pty) Ltd
B: Core Energy (Pty) Ltd
C: CPV Power Plant no.1 (Pty) Ltd
D: De Aar Solar Power (RF) (Pty) Ltd
E: Droogfontein Solar Power (RF) (Pty) Ltd
F: Firefly 253 Investments (Pty) Ltd
G: Oakleaf Investments Holdings 79 (Pty) Ltd
H: RustMo 1 Solar Farm (Pty) Ltd
I: Scatec Solar SA 166 (Pty) Ltd
J: Sevenstones 159 (Pty) Ltd
K: SlimSun (Pty) Ltd
L: Solar Capital De Aar (Pty) Ltd
The licensees cite the PPA and the Distribution Connection and Use of System
Agreement (DCUOSA) as documents that contain the procedures relating to the
requirements of the Distribution Information Exchange Code. All licensees do
not have standalone formal procedures related to transfer of information,
submission of information related to new or altered equipment at point of
connection, data storage and archiving of operational information; and
commissioning and notification. However, some have designated persons to
facilitate communication with the Distributor, submit information of new or
altered equipment at point of connection, established appropriate data storage
facilities with access control features and capability to retain data for more than
five years.
8.3 DISTRIBUTION NETWORK CODE
The code requires the licensee and the Distributor to conclude a connection and
supply agreement, whereby the parties agree on connection conditions and
responsibilities of each party in terms of maintenance and operation of
equipment at the point of connection. The Distributor stipulates protection
equipment requirements for generators prior to connection to the network. Table
9 below shows the compliance status of the licensees.
Table 9: Licensees’ compliance status with the Distribution Network Code
Distribution Network Code
requirements
Compliance
rating (%)
Compliance Status
Compliant Non-Compliant
Maintenance agreement for
equipment at point of
connection.
25
A, B, C, D, E, F,
G, H, I, J, K, L
Connection and supply
agreement in place.
25
A, B, C, D, E, F,
G, H, I, J, K, L
Capability to remotely report
any status change of any
critical function that may
25
A, B, C, D, E, F,
G, H, I, J, K, L
Consolidated Report on the Findings of the Electricity Generation Industry Compliance audits Conducted in 2016/17 FY
10
Distribution Network Code
requirements
Compliance
rating (%)
Compliance Status
Compliant Non-Compliant
negatively impact on the
quality of supply on the
Distribution system
(telemetry).
Does the licensee dispatch or
synchronise its plant using
appropriate equipment and in
line with the code
requirements.
25
A, B, C, D, E, F,
G, H, I, J, K, L
Total compliance rating 100% (25x4)
Key to Table 9
A: AE-AMD Independent Power Producer 1(Pty) Ltd
B: Core Energy (Pty) Ltd
C: CPV Power Plant no.1 (Pty) Ltd
D: De Aar Solar Power (RF) (Pty) Ltd
E: Droogfontein Solar Power (RF) (Pty) Ltd
F: Firefly 253 Investments (Pty) Ltd
G: Oakleaf Investments Holdings 79 (Pty) Ltd
H: RustMo 1 Solar Farm (Pty) Ltd
I: Scatec Solar SA 166 (Pty) Ltd
J: Sevenstones 159 (Pty) Ltd
K: SlimSun (Pty) Ltd
L: Solar Capital De Aar (Pty) Ltd
All of the above listed requirements are implemented through the DCUOSA and
PPA.
8.4 THE GRID CONNECTION CODE FOR RENEWABLE POWER PLANTS
The Grid Connection Code for Renewable Power Plants requires all Renewable
Power Plants (RPPs) to demonstrate compliance with all applicable
requirements specified in the code and any other applicable code or standard
approved by NERSA before being allowed to connect to the Distribution System
or the Transmission System and operate commercially.
Almost half of the plants do not comply with certain requirements under
Abnormal Operation Conditions, Reactive Power Capabilities, Power Quality
and the Provision of Data and Dynamic Simulation Models. All the licensees
were granted temporary exemptions while investigating possible solutions to
address the non-compliances. However, some of the exemptions have expired
while the non-compliances have not been addressed. The licensees need to
apply for the extension of the exemptions and ensure that the non-compliances
are addressed.
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8.5 DISTRIBUTION SYSTEM OPERATING CODE
The code sets out the responsibilities and roles of those connected to the
network as far as the operation of the Distribution System is concerned and
more specifically, issues such as economic operation, reliability and security of
the Distribution System, operation under normal and abnormal conditions,
maintenance coordination/outage planning and safety of personnel. Table 10
below contains the licensees’ compliance status with the Distribution System
Operating Code.
Table 10: Licensees’ compliance status with the Distribution System Operating
Code
Distribution Network Code
requirements
Compliance
score (%)
Compliance Status
Compliant Non-Compliant
Cooperation with the Distributor
in executing all the operational
activities during an emergency
generation condition.
33.3 A, B, C, D, E, F
G, H, I, J, K, L
Procedure for outage
scheduling and safety co-
ordination.
33.3 A, C, D, E, F, G,
H, I, J, K
B, L
Procedure for fault reporting
and analysis/Incident
Investigations.
33.3 A, C, F, G, H, I,
J, K, L
A, B, D, E
Total compliance rating 100%(33.3x3)
Key to Table 10
A: AE-AMD Independent Power Producer 1(Pty) Ltd
B: Core Energy (Pty) Ltd
C: CPV Power Plant no.1 (Pty) Ltd
D: De Aar Solar Power (RF) (Pty) Ltd
E: Droogfontein Solar Power (RF) (Pty) Ltd
F: Firefly 253 Investments (Pty) Ltd
G: Oakleaf Investments Holdings 79 (Pty) Ltd
H: RustMo 1 Solar Farm (Pty) Ltd
I: Scatec Solar SA 166 (Pty) Ltd
J: Sevenstones 159 (Pty) Ltd
K: SlimSun (Pty) Ltd
L: Solar Capital De Aar (Pty) Ltd
Although there are no procedures in place for most solar farms, the activities
that would have been documented in the procedures are implemented to a
larger extent. The licensees need to formalise the activities in writing.
8.6 GENERATION MAINTENANCE STRATEGY
The basis for maintenance planning is Original Equipment Manufacturer (OEM)
recommendations for all licensees. There is sufficient time to schedule planned
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maintenance as the PV plants are only operational during daytime when there is
sunshine.
Some of the licensees have a maintenance planning system to schedule and
keep records of proactive, preventive and reactive maintenance, whereas
others do not have a maintenance planning system, but use Microsoft Office
software such as an Excel spreadsheet.
The licensees’ strategy to manage maintenance planning is in line with
international best practice aimed at ensuring that maintenance of equipment is
carried out timeously and in an orderly manner, deriving optimal performance
and preserving the life of the equipment.
8.7 PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS)
The licensees submitted estimated energy generation and capacity factors for
the solar farms. Graph 1 below represents a comparison of the capacity factor
estimated during the licence application and the actual capacity factor.
The actual capacity factor for Solar Capital De Aar (Pty) Ltd (SCD) is 38% less
than the estimated, whereas that of CPV Power Plant No.1 (Pty) Ltd (CPV) and
RustMo1 Solar Farm (Pty) Ltd (RustMo1) is 45% and 33% above the estimate.
It would appear that the estimated capacity factor of 37% for SCD was
unrealistic or an error. On the other hand, CPV estimated an energy generation
of 46GWh for the first year of operation but the actual energy generation was
67GWh, hence, the 45% variance in capacity factor.
8.8 OUTAGE MANAGEMENT
The licensees undertake outage management in accordance with OEM
instructions. They take advantage of the night when the plants are not
generating to do planned and corrective maintenance to avoid outages during
the day when the solar farms are generating. In the event of forced outages that
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will constitute a 10% loss of achieved capacity, the licensees immediately
notifies the System Operator or Distributor as per the agreement between the
parties stipulated in the PPA.
8.9 ASSET MANAGEMENT
The plant equipment in most of the audited solar farms is partially labelled so as
to identify the equipment on the asset register. Most of the solar farms use a
functional location system to identify equipment and a coding system for
identification of components. All assets, including plant equipment, are recorded
in the asset register, which is updated continuously.
8.10 REFURBISHMENT AND EXPANSION PLANS
All the solar farms are new as they were first commissioned between 2013 and
2014. Approximately 58% of the solar farms that were audited have an
expected lifespan of 20 years, while the remaining 42% are estimated at 25 and
30 years. The solar farms currently do not have any future expansion plans
beyond 20 years of PPA period.
99.. PPLLAANNTT IINNSSPPEECCTTIIOONN
9.1 SCOPE OF PLANT INSPECTION
The plant inspection was conducted as complementary to the audit
questionnaire.
The inspection covered the following aspects:
a) safety of equipment;
b) display of safety signs and emergency evacuation routes;
c) environmental issues;
d) housekeeping, for example cleanliness, neatness and tidiness; and
e) plant labelling.
The following areas were inspected:
a) PV modules;
b) Inverters;
c) MV switchgear;
d) transformers;
e) substation, station control and batteries;
f) critical spares storage; and
g) fire protection equipment.
9.2 ON-SITE OBSERVATIONS
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It is essential to ensure that plant equipment is adequately labelled for safety
reasons. Equipment should be easily identifiable so that mistakes are avoided
where an employee might inadvertently work on equipment that is in service. In
addition, plant equipment labelling forms part of asset management.
Safety and evacuation signs are essential for the safety of personnel under
normal operations and in case of an emergency where personnel working in the
plant need to evacuate quickly. Table 11 to 16 indicates the areas that were
inspected as a sample representation of the solar farm.
Table 11: PV Modules inspection
A B C D E F G H I J K L
PV Modules
Check for
dust or
debris on
surface of
PV
Module
IO IO IO IO IO IO IO IO IO IO IO IO
Check for
physical
damage to
the PV
module
IO IO IO IO IO IO IO IO IO IO IO IO
PV
module
labelling
PI PI IM IM IM IM IM IM IM IM IM IM
Check for
cable
conditions
e.g. wear
& tear,
burn
marks, hot
spots or
loose
connec-
tions
IO IO IO IO IO IO IO IO IO IO IO IO
Safety
signs
clearly
displayed
PI IM PI IM IM PI PI IM PI PI IM PI
Key to Table 11 to Table 16
A: AE-AMD Independent Power Producer 1(Pty) Ltd
B: Core Energy (Pty) Ltd
C: CPV Power Plant no.1 (Pty) Ltd
D: De Aar Solar Power (RF) (Pty) Ltd
E: Droogfontein Solar Power (RF) (Pty) Ltd
F: Firefly 253 Investments (Pty) Ltd
G: Oakleaf Investments Holdings 79 (Pty) Ltd
H: RustMo 1 Solar Farm (Pty) Ltd
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I: Scatec Solar SA 166 (Pty) Ltd
J: Sevenstones 159 (Pty) Ltd
K: SlimSun (Pty) Ltd
L: Solar Capital De Aar (Pty) Ltd
IM: Implemented to a large extent
IO: In order
NA Needs attention
PI: Partially implemented, there is room for improvement
N: Not implemented or do not exist
NI: Not inspected
NO None observed
Table 12: PV Inverter inspection
A B C D E F G H I J K L
PV Inverter
Inverter
operational
data or plant
output e.g.
nameplate
info & display
parameters
such as
output
voltage, MW,
operating
temperature
IM IM IM IM IM IM IM IM IM IM IM IM
Check for
cable
conditions e.g.
wear & tear,
burn marks,
hot spots or
loose
connections
IO IO IO IO IO IO IO IO IO IO IO IO
Ventilation IM IM IM IM IM IM IM IM IM IM IM IM
Safety signs
clearly
displayed
IM IM IM IM IM IM IM IM IM IM IM IM
All plant
equipment
clearly
labelled
IM IM IM IM IM IM IM IM IM IM IM IM
House-
keeping in
order
IO IO IO IO IO IO IO IO IO IO IO IO
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Table 13: Transformer inspection
A B C D E F G H I J K L
Transformer
Controls are
locked off and
only
accessible on
authorisation
IM IM IM IM IM IM IM IM IM IM IM IM
Oil-filled
transformers
are installed
inside bund-
wall area with
drainage
IM IM IM IM IM IM IM IM IM IM IM IM
Access to
transformers
is restricted to
authorisation
IM IM IM IM IM IM IM IM IM IM IM IM
Safety signs
clearly
displayed
IM IM IM IM IM IM IM IM IM IM IM IM
The
transformers
and
accessories
are clearly
labelled
IM IM IM IM IM IM IM IM IM IM IM IM
Evidence of oil
and water
leaks
NO NO NO NO NO NO NO NO NO NO NO NO
Silica gel and
oil bowl,
liquids at
correct levels
IM IM IM IM IM IM IM NA IM IM IM IM
Check for
cable
conditions e.g.
wear & tear,
burn marks,
hot spots or
loose
connections.
IO IO IO IO IO IO IO IO IO IO IO IO
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Table 14: MV Switchgear, Station Control and Substation inspection
A B C D E F G H I J K L
MV Switchgear, Station Control and Substation
Switchgear room
accessible by
authorised
personnel and
access records in
place
IM IM IM IM IM IM IM IM IM IM IM IM
Switchgear door
panels are locked
(circuit breaker
compartment)
IM IM IM IM IM IM IM IM IM IM IM IM
All equipment
clearly labelled IM IM IM IM IM IM IM IM IM IM IM IM
Safety signs
clearly displayed IM IM IM IM IM IM IM IM IM IM IM IM
Emergency
evacuation signs
and route clearly
displayed
IM IM IM IM IM IM IM IM IM IM IM IM
Firefighting
equipment clearly
marked with
instructions and
serviced
IM IM IM IM NA IM IM IM IM IM IM IM
Housekeeping in
order IO IO IO IO IO IO IO IO IO IO IO IO
Monitor display
working, able to
operate the plant
from the control
room and to view
status of the plant
IO IO IO IO IO IO IO IO IO IO IO IO
Check for cable
conditions e.g.
wear & tear, burn
marks, hot spots
or loose
connections.
IO IO IO IO IO IO IO IO IO IO IO IO
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Table 15: Battery inspection
A B C D E F G H I J K L
Battery
Check
conditions of
the room e.g.
ventilation,
water ingress
IO IO IO IO IO IO IO IO IO IO IO IO
Batteries -
electrolyte
level, filler caps
and battery
check sheet
IM IM IM IM PI IM IM IM IM IM IM IM
Safety signs
clearly
displayed
IM IM IM IM IM IM IM IM IM IM IM IM
Check for
cable
conditions e.g.
wear & tear,
burn marks,
hot spots or
loose
connections.
IO IO IO IO IO IO IO IO IO IO IO IO
Eyewash
provided and
fire
extinguishers
and firefighting
equipment
marked with
instructions
and serviced.
IM IM PI PI IM PI PI IM PI PI IM PI
Housekeeping
in order.
IO IO IO IO IO IO IO IO IO IO IO IO
Most of the plants do not have a dedicated battery room as there is only a small
quantity of batteries, which are only used as backup for communication and
emergency systems. Therefore, in most cases, the batteries are in the same
room as the metering panels and communication servers.
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Table 16: Critical spares storage inspection
A B C D E F G H I J K L
Critical Spares Storage
Spares stored
neatly IM IM IM PI IM IM IM IM IM IM IM IM
Spares clearly
labelled IM IM PI PI PI IM IM IM IM IM IM IM
Spares have
manuals IM IM IM IM IM IM IM IM IM IM IM IM
A list of spares
and spares
movement
tracking registers
are in place.
IM IM IM IM IM IM IM IM IM IM IM IM
It is worth noting that no measuring standard was used for plant inspection,
however, a comparison between the audited licensees was used as reference.
For example, a solar farm that fared poorly in terms of plant equipment labelling
and a solar farm that implemented plant equipment labelling to a larger extent
are flagged and compared for the licensee who fared poorly to evaluate whether
is in line with the requirements of the applicable regulations. A similar approach
is adopted for the requirements for safety signs and evacuation signs.
1100.. CCOONNCCLLUUSSIIOONN
Detailed findings and recommendations of the audit for each licensee are presented
in the individual audit reports of the licensees. From the audit findings, it is evident
that the licensees have systems in place to implement the requirements of the licence
conditions, however, some do not have systems in place or programmes for
compliance with the South African Grid Code.
Graph 2 represents the compliance status of the licensees with the four compliance
requirement items, namely:
a) The Electricity Generation Licence – Table 7;
b) The Distribution Information Exchange Code – Table 8;
c) The Distribution Network Code – Table 9; and
d) The Distribution System Operating Code – Table 10.
In interpreting Graph 2, the following example is made:
In Table 10, Core Energy (Pty) Ltd (B) is compliant with two requirements of the
Distribution System Operating Code, hence, on Graph 2 its compliance status is
66.6% (33.3 x 2), whereas Slimsun (Pty) Ltd (K) is compliant with the three
requirements, therefore, its compliance status is 100% (33.3 x 3). This interpretation
method is applicable to the rest of the licensees’ compliance statuses on the graph.
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1111.. RREECCOOMMMMEENNDDAATTIIOONN
It is recommended that licensees address the non-compliances and other issues that
are highlighted in this report, in particular those listed in the detailed individual audit
reports.
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