Cost analysis: Power generation plants versus demand side management programmes

摘要

Over the last decade, South Africa has been experiencing a severe electricity supply crisis. Consequently, the stability of the national power grid has been operating under strain. The reason of this crisis was due to insufficient generation capacity as well as an increased demand for electricity. To counteract this situation, the state-owned electricity utility Eskom decided to increase its power capacity by building new power plants, and implementing Demand Side Management (DSM) initiatives to save energy, all of this came at a cost. Therefore, the present study was aimed at helping decision makers in South African electricity sector for an optimum funding allocation to the above projects. The research methodology adopted in this study was cost analysis. The paper provides various analyses on the costs between power generating technologies (Coal, Gas, Nuclear, Wind, Concentrated Solar Power, and Solar Photovoltaic) against DSM measures (Residential Mass Rollouts, Standard Offer Program, Standard Product Program, Performance Contracting Program, and ESCO Model Mass Rollouts). To date, cost analysis of building new and existing power plants has been the focus of ‘'cost of electricity'' comparison studies and debates. Our new cost analysis for DSM initiatives contributes to the body of knowledge by offering decision makers a more accurate picture of the trade-offs involved in decisions affecting the electricity utility. The results demonstrated clearly that DSM measures are least cost option to utility, and their implementations can help to counteract the current electricity supply crisis, to delay the need of building new capacity, and to assist the utility to save Billions of Rand from using large amount of coal, fuel, water, and doing much maintenance to the plants.