Posted in: Solar Technology

How Solar Power Systems Can Help Your Business?

Solar power systems are not only relevant to governments and large utilities looking to procure solar power, but to commercial and industrial businesses too. Currently, solar PV systems are the cheapest form of available power, and prices are continuing to drop. It is no wonder that businesses are keen to get on the solar trend. But how, specifically, can industrial businesses benefit from solar power systems? 

Solar power systems can assist businesses - ABInbev

Solar power systems reduce operating costs

The first and most obvious advantage of installing a solar power system is cost saving. Because solar is such an affordable form of electricity, it is an easy way to reduce operating costs dramatically, particularly for industrial businesses that have consistent loads or run 7 days a week. Two factors make solar PV a good investment for industrial businesses: they instantly reduce operating costs, and the great solar irradiance in South Africa means that they can produce a substantial amount of energy.

How much will a solar PV system save industrial businesses? This largely depends on the type of business, times of power use, and other factors that may influence the cost of the solar electricity generated. For an estimation of how much your business could save with a solar solution, get in touch with us for a free analysis of your electricity tariff. 

Solar Power Systems - Alrode Brewery in Alberton - industrial solar power system

Solar power systems can reduce diesel costs during load shedding and other power outages

Whilst most solar power systems are grid-tied, meaning that they do not operate during load shedding or other power outages, solar PV can greatly reduce the cost of diesel that might be required for backup power during an outage such as load shedding if this is taken into account whilst designing the system. 

Solar PV systems continue to generate power as long as it is light – and this applies to periods of load shedding during the day. However, solar inverters are designed to switch off during a grid outage, which serves as a safety mechanism for personnel that might be working on transmission lines during outages. However, this does not mean that large buildings with solar PV systems do not have options for load shedding. With careful engineering, It is possible to replicate a fake grid-tied scenario to “trick” the solar inverters into staying on. 

In order to retrofit a grid-tied solar system to operate during load shedding, two essential steps need to be taken. Firstly, the system needs to be isolated from the grid to prevent any exporting of power that could affect the safety of maintenance personnel. Secondly, a voltage forming source is required, in order to provide a reference voltage and frequency to the solar inverter. With these mechanisms in place, a solar PV system can continue to function seamlessly during load shedding, and thus reduce the costs of diesel and extend the life of on-site generators greatly. 

When does it make sense to go entirely off grid? If your business has a weak grid connection and thus has inadequate kVA supply, or it uses diesel roughly 20% of the time, it might be worthwhile to look at the cost-benefits of installing a solar PV microgrid with batteries. 

Solar power systems reduce carbon emissions

It goes without saying, but supplementing your business’s electricity supply with solar power is a great way to cut down on carbon emissions. In South Africa, the Carbon Tax was gazetted on 1 June 2019 – meaning that companies will have to take their carbon emissions into account when filing for their tax returns. According to the South African Revenue Service (SARS), the first phase of the carbon tax is R120 per ton of carbon dioxide equivalent emissions, which will increase annually by inflation plus 2% until 2022. 

There is a minimum threshold for emissions allowances in order to allow for businesses to transition to cleaner energy and invest in energy efficiency projects, but in general the carbon tax is here to stay – and if avoided, could save the business from tax expenses. 

In addition many large companies are heeding their stakeholders’ requests to be more responsible in the way that they do business. Global support of sustainable business practices have increased dramatically over the last few years, particularly in the manufacturing sector. In response to global consumer trends, a group of multinational corporations established the RE100 as a commitment  to going 100% renewable energy. One signatory of the RE100 is AB InBev, who recently entered into a multi-tiered Power Purchase Agreement with SOLA to supply their South African Breweries with 8.7 MW solar power systems. For them, the commitment to renewable energy is a no brainer – both in terms of cost savings and their sustainability commitments. 

Solar Power Systems - AB Inbev

By giving you a better overview, solar power systems can increase operational efficiency

Solar power systems are not only a way to reduce operational costs and lower carbon emissions, but they also provide an opportunity for businesses to evaluate and improve on their energy consumption habits. In order to correctly size a solar PV system, it is important to examine the load of the building, and with this will come insights into your energy consumption patterns. Is it possible to run some of the plant during the day when solar PV is at its cheapest? Are there additional energy efficiency measures that could assist with bringing your load during peak hours down? By encouraging a monthly overview of a business’s energy consumption, solar power systems can help to further energy savings even more. 

Solar power carport systems can provide cool, protected parking

Whilst many businesses in South Africa have ample roof space for housing solar power systems, solar power systems are perfect additions to parking lots and convert them into shady, protected carports. Solar carports are very similar to ground-mounted solar systems, but they have the added advantage of not requiring any additional land if a parking lot exists. What is more, because of global demand, these systems are becoming increasingly affordable. The solar carport at Old Mutual head office is an example of how a solar power systems can utilise existing space to create savings for businesses. 

Removal of Power Constraints Crucial for Post COVID-19 Recovery

This article originally appeared in the Daily Maverick Opinion Section.

It is difficult to understand why the main limitations to private power generation have not been removed, despite repeated pledges from government to that effect. There is a real danger that while grappling with the immediate crisis, policymakers will shelve the issue indefinitely.

Demand for electricity has plunged with the onset of South Africa’s COVID-19 lockdown, removing the threat of load shedding for its three-week duration. It could be several months before the economy is up and running normally again, but it would be a big mistake to forget the power constraints which plagued SA in the weeks before the pandemic struck.

When Moody’s downgraded SA on 27 March, it pointed out that unreliable electricity supply and its impact on the economy was one of the main reasons for the decision. The ratings agency also pointed out that a strategy to stabilise electricity production in the country has failed to materialise and that as a result, economic growth would remain low for years. Returning to a constrained electricity supply without an adequate government response is the last thing embattled businesses need after COVID-19. 

Against this background, it is difficult to understand why the main limitations to private power generation have not been removed, despite repeated pledges from government to that effect. There is a real danger that while grappling with the immediate crisis, policymakers will shelve the issue indefinitely. In addition, the National Energy Regulator (NERSA) has inexplicably halted all new licensing applications for the duration of the lockdown period. 

For connected projects larger than 1MW — which applies to most of the pent-up demand for corporate generation of electricity — a license is still required from NERSA even if the installation is for a customer’s own use, or established through a bilateral agreement involving only a customer and an independent power producer.

These onerous license application processes were intended for large, utility style power stations, hundreds of MWs in size, and each requires a public participation process with hearings. They have requirements which make the development of smaller project impractical. The official time for NERSA to issue these licenses is 120 days but in practice it takes far longer — with some cases so far taking as long as two years.

NERSA is theoretically able to process license applications, but in practice is inadequately resourced to handle the quantity of smaller applications that are now being made. This regulatory blockage is holding up the roll out of hundreds of MWs of electricity generation, which would be the fastest way to alleviate the power constraints which lead to load shedding. 

This point has been repeatedly made by independent bodies like the Minerals Council of SA, Business Unity SA, the South African Photovoltaic Industry Association, and the Council for Scientific and Industrial Research. It has been recognised by Minerals and Energy Minister Gwede Mantashe, who indicated at the mining Indaba in March 2020 that self-generation of any size would not require licensing. 

Companies in the private sector were hopeful that their pleas for the 1MW cap on licensing for their own electricity generation would be lifted to 10MW, which would include most of the projects they want to implement. And yet, when the eagerly awaited Schedule 2 of the Electricity Regulation Act was published on 26 March, the 1MW threshold for grid-connected facilities exempt from licensing was maintained. 

The shape of the national load profile – when and how much electricity is used – is important to Government because it affects which mix of electricity is most cost effective. Its preferable to have a load profile that allows for the maximum usage of the cheapest resources available to the country. From this angle, the control over who builds what generation is understandable, but even with this argument considered, the amount of solar power in South Africa still represents under 5% of installed capacity, and less than 2% of the consumed energy.

A 10MW solar generator represents 0.006% of annual electricity demand and 150 of such projects would need to be installed to reach 1% of the total demand. Lifting the license exemption threshold to 10MW will initially have negligible effect on the demand profile but a huge effect on lifting red tape in the way of more energy coming onstream and supporting small to medium size businesses. It is always possible for the state to monitor the uptake and lower the threshold for licences at a later stage if necessary.

As the chairperson of a solar PV company, the SOLA Group, I have seen many clients desperate to install larger solar plants than the 1 MVA limit to alleviate their electricity constraints and lower their costs. These projects are practically ready to be rolled out – and could be built within 8-12 months – if the licensing hurdle is removed. 

From my extensive experience in the solar PV industry in South Africa I estimate that, without such restrictions, solar PV companies could build 500 MWs within the next 12 – 18 months. The wasted opportunity due to these arbitrary licence requirements is obvious and destructive.

For the sake of saving businesses and creating jobs post COVID-19, I urge government to:

  • Lift the threshold on requirement for a generation license from 1MW to 10MW until the embedded generation allocation in SA’s new Integrated Resource Plan has been reached.
  • Require that these projects are registered with NERSA upon their commercial operation date through submission of an independent certificate of compliance against which the allocation to embedded generation can be measured, and keep the database of installed MWs public and updated.
  • Ensure that NERSA is provided with, or creates, clear guidelines as to the technical standards that must be met to obtain a generation license for generation projects above 10MW in size.
  • Provide NERSA with the resources, both through budget and staff, to evaluate the applications in a meaningful, prompt and scientific way.
  • Return to processing and receiving licence applications during the lockdown.

The business case for installing embedded power generation remains for the private sector, and the economy will once again start moving when the impact of the pandemic subsides. It would be tragic if its potential to recover is thwarted by continued electricity shortages. 

Solar for mining operations

Solar PV Microgrids for Mining: cost-cutting meets sustainability

The mining sector is one of the most important economic contributors to the African economy. However, mining is also facing several challenges – particularly with regards to sustainability and cost-saving. Mining operations are increasingly turning to solar PV microgrids as a reliable and sustainable alternative energy option.

Cost-cutting competitiveness

A 2019 Mckinsey review on measures to invigorate the South African mining industry identified cost-cutting competitiveness as a key factor. As an energy-intensive industry with a projected increase in energy consumption of 36% by 2035, the mining sector is looking to renewable energy, and particularly solar, as a significant cost-saving solution. This is evident in the agenda set for the 2020 Investing in Africa Mining Indaba taking place in Cape Town at the beginning of February, where industry experts will lead the conversation on the economic and societal benefits of renewable energy in mining.

A shift in industry thinking

proactive mitigation of ESG risks creates long term shareholder value.

Speaking to Engineering News & Mining Weekly Tom Quinn, an organiser of Mining Indaba, emphasised that:

‘It is now absolutely necessary for mining companies to have ongoing engagement with their investors and with the communities in which they operate in order to mitigate the risk of investor or community backlash from a lack of sustainable practices.’

This shift in industry thinking is aided by the economic benefits associated with using renewables such as solar PV microgrids to supplement more traditional energy sources. It is now widely accepted that maintaining a Triple Bottom Line is key to responsible investment. IFC’s Global Head of Mining Namrata Thaper advises that:

‘[E]xperience has shown that proactive mitigation of ESG risks creates long term shareholder value. This value is created by ensuring alignment between stakeholders and thereby reducing the likelihood of disagreements between stakeholders, which can lead to cancellation of concessions by government, labour unrest and strikes, community blocking or stopping of operations and more which are all events that can negatively impact financial performance…’

Renewable trends

‘The most advanced options… are hybrid systems that integrate solar, wind and batteries with diesel, gas or heavy fuel oil generators, without compromising reliability or power quality.’

For the mining industry, who rely heavily on consistent, uninterrupted power, the key energy trends to watch in 2020 are hybrid power, advances in renewables technology, variable power usage, intelligent seamless integration and meaningful cost savings.

Climate change, loadshedding and the fluctuating diesel price

However it is not just Triple Bottom Line reporting that is pushing mining companies to seek renewable energy solutions. Threats to productivity in the southern African region include unplanned breakdowns at state-run electricity utility Eskom, the fluctuating diesel price and supply disruption risks in the SADC region. The reliability of solar PV microgrids can mitigate these risks significantly.

On a global scale interruptions to energy production as a result of violent weather conditions caused by climate change has resulted in a growing shift to renewable energy. In response to this new challenge, businesses are focused on ramping up energy efficiency and reducing carbon emissions. Spencer Glendon, a senior fellow at Woods Hole Research Center cautions that climate change may be altering the economics of long-term infrastructure investment. It is crucial to ensure that one’s power supply is independent of at risk utility plants.

Solar PV microgrids offer a hybrid solution to these obstacles. In cases of remote locations, weak grid supply and reliance on diesel, there is an optimal business case for mines to use a solar PV microgrid. This typically combines a backup generator with batteries and solar to ensure a seamless transition and no interruption of power.

Positive outlook for solar PV globally and locally

‘the world’s total renewables-based power capacity will grow by 50% between 2019 and 2024’

The International Energy Agency’s (IEA’s) 2019 renewable energy market forecast for solar PV states that ‘the world’s total renewables-based power capacity will grow by 50% between 2019 and 2024’. Thus as there is a global transition to a varied renewable power sources the southern African region will find itself at a competitive advantage due to its strong irradiance levels (South Africa average more than 2 500 hours of sunshine per year). As a result of falling costs of solar PV and batteries worldwide, microgrids are now accepted as a reliable and cost-effective solution for industrial power generation.

The added benefits of third party financing

Financed solutions allows mining facilities to achieve immediate savings with no initial capex outlay. A solar Power Purchase Agreement (PPA) enables businesses to pay off and maintain their own solar energy systems at no upfront costs, while enjoying the immediate benefit of cost savings. Solar PV microgrids are increasingly the option of choice when looking to adopt a reliable, affordable, and sustainable energy solution.

Capella Stella – North West Province – South Africa

Can urban high-energy consumers benefit from solar PV?

It’s no surprise that high energy consumers are those that might benefit the most from renewable energy. In South Africa in particular, the coal-based electricity system means that large energy consumers carry large carbon footprints, which can undermine sustainability efforts and targets. But simply adding a few solar panels is not necessarily the answer either. 

That’s because renewable energy – in particular solar – needs space in order to effectively produce the necessary energy. For large energy consumers, the required space can be substantial – requiring a large solar farm situated in an area with excellent irradiance (solar resource). Whilst it does sometimes happen that the energy consumer is situated in an area with large land and good irradiance, this is not always the case. 

Open energy markets allow the trading of energy from different sources of production – either governmental, such as an Eskom-owned and operated coal-powered generation plant – or independent power producers (IPPs) – typically solar, wind, gas, and so forth. When energy is at its cheapest – as solar is during mid-day – consumers can buy this power and benefit from the associated cost savings. This is the type of energy market which is common overseas in places like California, where a central body facilitates the provision of power from various different sources. 

In South Africa, we are not yet at an open energy market situation. Energy is still provided almost exclusively by Eskom, with a few IPPs contributing to Eskom’s grid. But wheeling of power – forming an arrangement between an IPP and a commercial offtaker to use power via Eskom’s grid – is a possible workaround for large energy consumers. This fits with global trends that show that businesses are taking a more active role about procuring the type of power they want, according to Bloomberg.

Wheeling is essentially like a remote Power Purchase Agreement – it is a way for a corporate consumer of energy to procure electricity from an independent party. But unlike typical PPAs, wheeling enables larger amounts of power to be transferred, because the generation source – such as a solar PV system – doesn’t have to be situated geographically close to the offtaker. 

This means that a large solar farm – producing several MW of power in the highest solar resource areas of the country- could generate electricity for a high-energy consumer on the other side of the country, using the national electricity grid.

In South Africa, wheeling currently involves amending the System of Use Agreement from Eskom to stipulate that the energy can be wheeled – or generated in one source and consumed in another. The actual energy generated by the plant does not get transferred physically to the consumer, but electricity meters at either end (both at the producer and consumer) measure how much energy was generated and consumed and will be accounted for, respectively. 

The industries that can benefit from wheeling include large corporate energy consumers, such as mining operations, smelters, or data centres. All of these operations are suitable for wheeling because they are large energy consumers, but may have neither the space nor the inclination to build a large solar plant located at their operations. Wheeling agreements can ensure that they meet their sustainability targets, by reducing their carbon emissions, and cut operating costs, by procuring cheaper power when this is available.  

So wheeling can help to facilitate energy markets by allowing IPPs to produce affordable, clean power and sell it directly to corporate consumer, helping the latter to reduce costs and carbon emissions. Is there a catch?

There are a few different aspects of a wheeling agreement that can influence the tariff costs. Firstly, there are the wheeling fees, which Eskom charges in order to recoup the costs of utilising their grid to distribute power. These costs mean that economies of scale are still needed in order to make the tariff an affordable one – making wheeling suitable for very large consumers of energy only. 

Secondly, the regulatory environment can take time to navigate. In South Africa, Eskom has a wheeling framework that enables wheeling, but these agreements are still subject to approval by the National Energy Regulator, Nersa, who need to give overall permission for the arrangement. Navigating the two entities can take time, and therefore wheeling agreements typically take a while to come online. 

Nevertheless, wheeling of power has great potential to assist large energy consumers to optimise their energy loads and provide cost savings, whilst also reducing pressure on Eskom. Wheeling means that Independent Power Producers can supplement the grid and provide clean electricity to those companies that wish to procure it. 

Solar and wind energy could set South Africa on track for the world’s cheapest electricity

This article originally appeared in the Daily Maverick Opinion Section.

It’s a no-brainer — a move to renewable energy will not only boost the economy and create jobs, it is also the path to providing South Africa with potentially the cheapest electricity in the world given our natural wind and solar resources.

Energy was never this difficult. Energy came from coal in the ground, burnt somewhere, put in a turbine, wires were connected, and cheap energy flowed for many years. However, this was never going to last long, because the amount of coal that forms in a year was being burnt in a minute. The world has now realised that this is unsustainable behaviour, and we’re faced with a set of future alternatives: hydro, nuclear, wind, solar, biomass, coal — each with a sidecar of complexity, and we need to make some decisions.

Ten years ago, the general public didn’t know what a kilowatt-hour (kWh) was, what it cost, where it came from; they didn’t know how many litres of water were spent in a flush or shower, how many dams we had or how many megalitres we use per day.

That’s changed. We’re more knowledgeable now. Why? Because we’ve felt the effects. Electricity is expensive and we’ve even run out of it (many times). We’ve been on water restrictions for years, and Cape Town came close to being the first major city in the world to run out. Authorities are having to find alternative methods to abstract water, domestically and regionally. Unemployment is a major contributor to poverty and addiction, and we witness frequent protests against injustice.

Knowledge, however, can help us to solve problems. If the problem at hand is to solve the electricity crisis, we need deep understanding to find the least cost kWh and invest in the technologies that will deliver that. The “least cost” does not only refer to the financial cost, but also the environmental and social cost. The industry has been poor at recognising the entrenchment of communities reliant on the electricity sector and ensuring that reform is done fairly.

In the long wait for the IRP 2019 to be gazetted, many people have missed a recent study published in the international journal, ScienceDirect, which took a bold step forward in modelling a best electricity policy scenario based on cost, water and employment. The strength of this peer-reviewed article is that it is founded on solid scientific data. And while a cold approach to kWhs might not reflect every sensitivity in our country, the study did pay attention to the largest social item on our agenda: jobs.

The paper, titled Pathway towards achieving 100% renewable electricity by 2050 for South Africa, modelled the costs of renewable and non-renewable electricity generation pathways in South Africa, taking into consideration South Africa’s current energy requirements, the expected population growth, and costs of electricity. The paper highlighted the possible scenarios for South Africa’s electricity future — whether we stay on the Current Policy Scenario, highly reliant on coal — or go aggressively into renewable energy (what the authors term the “Best Policy Scenario”).

Their suggested “Best Policy Scenario” (BPS) includes 71% of overall electricity production coming from solar PV and 22% by wind by 2050. In addition to this, storage technologies, transmission grids and gas power plants would be utilised to provide the elements of consistency for a stable electricity supply.

The BPS is 25% cheaper than the current policy scenario, and this doesn’t take into account the additional benefits of electricity being virtually 100% renewable, such as the reduction in the detrimental effects of carbon and other poisonous gases in Earth’s atmosphere, the distributed nature of the employment, and the lower risk in the technologies.

If you put a cost saving to these benefits, particularly the greenhouse gas emissions, then the 100% renewables case becomes more than 50% cheaper than the Current Policy Scenario.

In addition, the cost reductions in Levelised Cost of Electricity (LCOE) are not the only benefit of this pathway. In addition to their findings on LCOE, the authors assert that the low-carbon pathway will also decrease water consumption by 87% by 2030, and by 99% by 2050, compared to the baseline — which would remain in the Current Policy Scenario.

From an employment perspective, the renewables-rich BPS will grow the jobs created by the energy sector dramatically, almost doubling to 408,000 by 2035 and tapering off to 278,000 by 2050 as construction jobs stabilise. In the Current Policy Scenario, fewer jobs are created, never rising higher than the 200,000 mark, and decreasing to 184,000 jobs in 2050.

What about coal and nuclear?

The arguments to retain a coal-heavy electricity supply are becoming thinner, particularly given the overwhelming evidence toward coal’s contribution to greenhouse gas emissions that cause climate change and the fact that South Africa is one of the world’s worst emitters of CO2, clocking in just behind huge economies like China and the US.

The authors assert that coal and nuclear should be phased out in the BPS, adding that new investments in coal and nuclear could be at risk of becoming stranded assets as more banks tend to opt out of investing in non-renewable technologies.

On nuclear energy, the authors assert that, “results for the fully renewable end-point scenarios indicate that there is no need for high cost and high-risk nuclear energy in the future South African electricity mix”.

From the study, it is clear that South Africa has an important policy decision to make: one that will steer its future toward low-cost, low-carbon electricity that will create jobs and reduce freshwater consumption. It is an option that would be to the benefit of all South Africans — and the world at large.

The “side” benefit is that in this scenario, due to our significant wind and solar resources, we’d probably have the cheapest electricity in the world, adding a strong element of competitiveness to our economy, which we’re also trying to grow. Now more than ever, we need to do the right thing. It’s clear as day.

Solar Microgrids and Battery Storage

Achieving electricity cost reductions through energy storage

Achieving electricity cost reductions through energy storage: what Business needs to know

Energy storage represents the major opportunity for the electricity sector, as affordable energy storage promises to solve the intermittency issues that occur with cheap renewable power such as solar PV and wind energy. Over the past few years, rapid declines in the cost of energy storage technologies, such as lithium-ion batteries, have made the topic of energy storage enter mainstream conversations. However, does energy storage as it currently stands translate into cost savings for business? 

From electric vehicles to large-scale utility batteries: the global market context

The popularity of electric vehicle (EV) technology in many ways has facilitated rapid growth in the energy storage services market, driving down the costs of Lithium-ion batteries and associated technology. Daniel Goldstuck, head of Energy Storage and Microgrid Services at SOLA, believes that the progression of storage products and services can be clearly seen in the increasing presence of battery suppliers and other industry service providers at conferences, who tout their ability to provide reliable, high-tech solutions to intermittency battles. In addition, the mushrooming of utility-scale battery programmes globally indicates that interest in energy storage is entering the large-scale energy services market, leading potential clients to see energy storage as a potential solution to some of their needs. “The procurement of large-scale transmission assets ‘in front of the meter’ shows that utilities are starting to use energy storage to provide a number of services, including frequency response, renewables smoothing, and transmission deferral,” Goldstuck asserts. 

The uptake of such solutions is expanding globally. California, for example, has over 1 GW of storage solutions installed, and the state also provides rebates for residential storage systems. In Africa, Microgrids that combine energy-storage technology with clean energy generation are lauded for their ability to provide stable power to communities with weak or no grid access. Pico-grids, or home solar kits, are also increasingly seen as ways to assist rural homesteads and villages with electricity provision. 

However, the application of microgrids and energy storage solutions do not only apply to rural and utility scale efforts, but also to the large segment of commercial and industrial energy consumers in between. Rurally-located mining operations, for example, can benefit from energy storage applications that link to cheap and reliable renewables, moving operations to electricity that is less cost- and carbon- intensive than diesel.

storage and solar PV: a perfect match

Solar PV is the cheapest form of energy in most countries globally. This is because it is solar power is an abundant renewable resource, the technology to harness it is relatively cheap to install, and it lasts for 20-plus years. However, solar PV is most abundant in the middle of the day, and starts to wane during “peak” energy hours such as early morning and evening. When combined with energy storage, the abundant, cheap electricity generated by the sun during midday can be stored and deployed during these peak usage times. Because storage is also programmable, it can be deployed when most needed – preventing wastage and increasing the economic value of each kWh stored. 

However, this programmable aspect of microgrids also make them more expensive than the typical grid-tied solar PV facility. “Solar PV and storage microgrids need to function seamlessly, so that power is not interrupted, and battery life needs to be managed carefully in order to ensure their longevity. This takes quite specific and extensive engineering to get right,” Goldstuck adds. 

Issues such as cycling the battery every day can affect the warranty of the product, depending on the type of battery and warranty arrangement. Energy throughput of the battery has the largest impact on the life of the battery, and therefore the warranty. Unlike solar modules that have a 25 year lifespan and relatively low operations and maintenance requirements, batteries need to be very carefully sized and configured, taking into account things like days with low-irradiance or cloud cover, where batteries may be put under pressure.

Although renewables and energy storage solutions are a perfect combination in a world headed towards increased renewables, the above factors mean that at the moment, the combination of solar PV and batteries into microgrids is more costly than straight grid-tied solar PV.

When does storage make sense economically?

However, the business case for storage and microgrid solutions is very clear for certain business sectors. “Rurally located agro-processing units such as medicinal cannabis farms are particularly well-positioned to make use of renewable energy storage microgrids,” contends Goldstuck. “They require consistent, large amounts of reliable electricity in order to power greenhouses and other farming equipment – yet are often situated on constrained grid networks and may rely heavily on diesel to run effectively,” he adds.

Diesel is expensive, both monetarily and environmentally, and yet diesel generators are widely used to power remote facilities. Diesel generators have even been used in South Africa to maintain the grid supply whilst there was constraint to major power stations. And despite energy storage solutions still being pricier than solar PV, diesel is still more expensive than the combination of both. Given that diesel is so expensive, the business case for implementing a clean-energy microgrid is particularly good  in relation to diesel saved.  

In contrast, storage for grid-tied facilities seeking a tariff-optimization solution generally requires closer analysis to determine the business case. “In South Africa, only a few tariff structures are currently at the price point to justify adding a storage asset. This is rapidly changing as the cost of storage decreases, and the costs of centralised electricity supply increases,” adds Goldstuck.

Energy storage economics cheat sheet

As a rule of thumb, energy storage microgrid solutions will make economic sense if they prevent at least 30% of the facility’s current or proposed diesel usage. Such cases are typically:

  1. Facilities on a weak or constrained grid network that need additional power to function
  2. Facilities without electricity grid access
  3. Facilities requiring consistent power that the grid is not able to provide for at least 30% of the time. 

Based on the above criteria, the following industries lend themselves particularly well to solar PV and energy storage microgrids:

  1. Islands without electricity grid access, or where the grid itself is powered by diesel (such as Robben Island)
  2. Game lodges or hotels that do not have access to the grid
  3. Large developments in rural settings that require more power than the grid can provide (such as the Cedar Mill Mall development)
  4. Mining operations situated remotely
  5. Farms that have extensive greenhousing requirements such as Medicinal Cannabis facilities 
  6. On-grid buildings experiencing outages for more than 30% of the time.

In conclusion, Goldstuck admits that there is a long way to go before large-scale energy storage solutions can be broadly implemented. However, he remains optimistic. “We’re just scratching the surface of what’s possible in terms of storing the abundant renewable resources we have available. In the years to come, energy storage solutions will become widespread options for commercial and industrial facilities”.

Solar Microgrids and Battery Storage


Aries utility solar PPA in South Africa

Electricity in SA seems bleak, but it’s loaded with opportunity.

Originally published on LinkedIn

What the Eskom’s current state of nation-wide load shedding and their 15% tariff increase appeals are teaching us, it is that the fate of South African industry is tied fundamentally to the availability of stable and affordable electricity supply. The sustainability of the utility requires brave, informed and decisive leadership: but it is possible.

We’re in a landmark year that will determine not only the fate of Eskom, but South Africa more broadly. In May, the country will vote on whether to extend the term of the ruling party in a an uncertain global market.  The ANC’s latest manifesto has clear intentions around energy: more renewables, more private partnerships (IPPs), repositioning Eskom and ensuring fair treatment of South Africans as part of a Just energy transition. It also plans to integrate solar PV in state buildings and new developments.

This year, we’re looking at a year of continued change in a sector that badly needs a modern restructure.

Arriving at today’s energy market

In South Africa, 2018 held much in the way of energy sector developments. The renewables-vs-nuclear stalemate came to an end with new energy minister Jeff Radebe signing 27 long overdue renewables projects. Eskom’s mismanagement was placed under the spotlight and a new CEO, Phakamani Hadebe, was appointed in May. In August, the much-awaited draft Integrated Resource Plan (IRP) was released, showing favour toward renewables and gas and less coal and nuclear. Why the sudden change in South Africa’s energy landscape after years of stagnation?

One answer is that South Africa has started to take heed of global trends toward renewable energy. This is not simply a fad: the upsurge in solar PV technology, in particular, is part of a global market context. According to the Global Market Outlook report for solar energy, solar PV accounted for nearly 40% of all new generation technology during 2017: more than any other power generation technology. This was mostly driven by China, US and Japan, whose overall manufacturing influence also drove the costs of solar modules to record lows. It is undisputable that Solar PV’s cost per unit is now cheapest in the world by a significant margin.  Even more growth is expected in coming years.

The challenges for the energy landscape

Back in South Africa, Eskom has a major debt-service problem on its existing assets. The assets aren’t able to cover their own costs at Eskom’s current tariff rate, which is why they are asking for 45% increase over the next 3 years when inflation is just 5% p.a. Put another way, these assets are worth less than the R420Bn of debt that Eskom borrowed when building them in the first place.This is the primary cause of  Eskom’s death spiral.

The challenge for Eskom, and South Africa, remains that a different electricity path is cheaper. The cold numbers show that the lowest cost model is renewable energy and gas, with no new nuclear builds and limited further coal. This has brought up some valid social issues around transformation and the displacement of employment. These issues are important and need to be tackled head on, they also need to be seen in the light of education, upskilling, entrepreneurship and opportunity.

The opportunities for the energy landscape

The energy minister has recently said that the IRP will be signed off in mid-February.  The IRP draft, combined with the ANC’s policy manifesto, does show willingness to dissolve the electricity monopoly, bring private players into the market, reduce the costs of electricity and stimulate the economy, allowing the government to focus on the key areas of the country that need it most.

The President’s recent announcement of his intent to divide Eskom into separate Generation, Transmission and Distribution entities is not only in line with global trends, but it will also ringfence Eskom’s unprofitable generation assets from affecting its profitable grid infrastructure, which is crucial to our country’s stability as an economic entity.  It is hard to know the series of actions that will follow, but we can be sure that it will be done sensitively in an election year.

We’re already seeing large users of electricity investing in their own power consumption, and when the IRP is released, we’ll see generation licenses starting to be awarded to private embedded generators.  Most of this is, and will be in future, solar PV due to the ease of implementation and abundance of solar resource in South Africa. However, there will also be some cogeneration and biowaste projects too.  These steps are very positive, as they set the stage of a socialised electricity grid with multiple power sources, allowing the most affordable energy to be available to South African industry and encouraging economic growth.

The Future is Bright

We have an extraordinary opportunity for electricity reform in South Africa.  If our renewable resources are harnessed, we not only have 20 years of upskilling and job creation, but with our natural resources we could have, sustainably, the cheapest electricity in the world. If we get the structure right, and manage the transition in the best interests of all of our people, it will be a positive boon for South Africa’s economy. This is a major task, but if achieved, we have a lot to look forward to.

A reflection on South Africa’s energy landscape in 2018

South Africa’s renewable energy sector received a new lease on life in 2018, after years of uncertainty and lack of movement.

With the Ramaphosa government signing nearly R56 billion worth in contracts with 27 independent renewable energy producers during 2018, the way forward, notwithstanding legislative and business challenges, is looking much brighter.

Significant progress has been made in the private sector in adopting renewable energy as a viable and consistent energy supply, often beating the costs of Eskom-supplied power.

We believe that more businesses will make use of renewable energy sources either to supplement their power, or for their primary electricity supply, as batteries and solar PV costs continue to fall.

Robben Island is saving millions of rands on its electricity bill though its microgrid. Earlier this year, Cedar Mill Mall in Clanwilliam opened its doors after Eskom told the developers it could not provide the power needed to supply the large building. These project show that despite inertia and a struggling economy, South African business can still benefit from renewable energy.

Uptake is particularly impressive in the retail sector, with malls catching on to the value of solar to produce low cost power during their busiest hours of operations. Ilse Swanepoel, Head of Utilities at Redefine Properties, whose solar PV fleet produces about 35 754 600 kWh per annum, stated “Solar is no longer niche and is a well-entrenched renewable energy source underpinning the achievement of green-building goals. Demand has grown in recent years, with many large blue chip tenants prioritising their own sustainability efforts, expecting the developer to dovetail and help achieve their objectives.”

This is encouraging. However, uptake in renewable energy should not just be supported by the private sector. For the economy to benefit from renewable energy’s reduced costs, the contracts signed by the government with the 27 independent renewable energy producers must translate into action that is sustainable, consistent and measurable.

Independent Power Producers (IPPs) have reportedly created 35 702 jobs and have spent R766 million on education, health, social welfare and enterprise development, according to figures provided by the ministry.

I’m optimistic about the renewable energy sector, given the government’s willingness in 2018 to acknowledge and engage with alternative energy suppliers, which were on hold for several years. REIPPP’s Round 5 is crucial in terms of accelerating the government’s transformation plan as it is set to bring about higher levels of transformation, localisation and community upliftment requirements.

In addition to this, the successful implementation of the Small IPP programme, aimed at smaller scale projects with a focus on SMMEs, high black ownership and local supply chains is exactly what the renewable sector needs. Going forward, we will need to work closer with all role-players as we better understand the sector and its ability to grow and develop South Africa.


Solar will be a boost for SA's economy

One of the most significant documents is the government’s draft Integrated Resource Plan (IRP), which outlines the way for South Africa to meet its growing national electricity demands by 2030.

The IRP was released for public comment in August. The construction industry (with its high electricity costs it incurs) has already welcomed the IRP, with some saying it could revive the industry. It has also been praised for its proposed increased allocation to renewable energy and the phasing out of coal and the pursuit of the ‘least cost option’ which rules out nuclear at least until 2030.

However, the IRP still lacks in clarity and allocation for embedded generation – which is one of the fastest growing energy sources and key to reducing corporate energy costs. A future-facing IRP takes into account not only the cheapest form of energy, but also the changes in the energy environmental happening globally. Coal-based, heavily centralised energy systems are fast becoming redundant with the introduction of smarter technology.

South Africa is no exception in this picture, with state utility Eskom plagued with difficulties in 2018. Still, Nersa’s (National Energy Regulator of South Africa) announcement giving Eskom the go-ahead to recover R32.7 billion (already approved as part of its adjudication of three separate Regulatory Clearing Accounts), will result in further tariff increases.

Embattled state utility Eskom

This will encourage businesses to look at alternative, consistent and cheaper forms of electricity – resulting in less income for Eskom and municipalities that rely on selling power through their grid.

Nersa continues to agree to Eskom’s requests for increasing tariffs. The embattled parastatal has again asked the regulator to push up tariffs – this time a 15% tariff increase per year over three years – this is on top of a 4.41% price increase Nersa has already granted Eskom. This proves to be one of the many reasons why a balanced energy mix should be put in place.

Another piece of legislation crucial to the sector is the so-called Carbon Tax (revised Draft Regulation on the Carbon offset), which Treasury published on 12 November for a second round of public comment.

Small and medium-scale renewable energy projects with a generating capacity of up to 50MW have been listed by Treasury as eligible for carbon offsets, but Nersa’s regulations might hinder national uptake.

Renewable energy trading, embedded generation and renewable IPPs needs to be supported by South Africans. Renewable energy solutions have the potential to jumpstart our economy; legislation is a step in the right direction. It will be interesting to see how the energy sector will develop in 2019.

solar could help Africa's economy to grow

Going wire-free in Africa: Two examples

Our last blog post focused on how microgrids in Africa can enable electrification in rural communities to encourage economic prosperity without the need of centralised grid infrastructure. This blog explores two examples that SOLA Future Energy has designed, engineered and built – and how these might be replicated in African communities.

Robben Island – an isolated microgrid

Robben Island’s state-of-the-art microgrid is the largest combined solar and lithium-ion storage facility in South Africa. The microgrid, consisting of a combined solar PV facility and a battery bank, has enabled the island to move away from its diesel generators. Since adopting this green energy system, the island has already produced 650 000 kWh of solar energy – an average of 3250 kwh per day – which has significantly reduced its reliance on traditional diesel generators, a noisy and expensive feature of the energy system.

In the past, diesel had to be transported by ship from the mainland to fuel the diesel generators. The island’s load is primarily occupied by a desalination plant and to provide power for the 100 residents who live on the island. The cost of purchasing and transporting the diesel formed a substantial portion of the island’s operating budget. Over and above the financial considerations, the noise and dust emanating from the generators were not creating a tourist-friendly environment.

Robben island is now powered by the sun
Cedar Mill Mall – solar and batteries enabling development

Robben Island is a perfect example of how microgrids can provide electricity supply in rural contexts that are isolated from electricity grids. However, even grid-connected businesses can benefit from microgrid technology.

This is exactly why Noble Property Fund, developers of Cedar Mill shopping centre in Clanwilliam, a rural town in the Cederberg region of the Western Cape in South Africa, approached SOLA Future Energy to help with their power supply needs. Initially, the developers had applied for a 500 kVA connection from Eskom to power the facility, but the parastatal was only able to approve half of their demand requirements due to local constraints to the grid.

Faced with a major supply shortage, the developers were forced to consider utilising noisy and expensive diesel generators to make up the shortfall. As an alternative, SOLA suggested the use of solar PV and batteries to make up for the shortage, and has subsequently been appointed to integrate a microgrid into the shopping centre. Consisting of a 851kWp solar PV system with a 700kWh lithium ion battery, the microgrid makes up for the power shortfall – allowing the mall’s development to continue.  

“Incorporating a microgrid into the shopping centre turned out to be a financially attractive solution when considering how much energy could be harvested and stored from solar PV,” said Mario Dos Reis, director of Leasing at Noble Property Fund. “The shopping centre will be a blessing for small business owners in the town looking for an accessible and safe location to trade”.

As such, although the mall already had grid connection, the solar PV microgrid enabled the building of the mall to go ahead. This mall will become an economic hub of activity in the mostly rural region, providing jobs and economic spinoffs to the local community. The cost-savings of the building owners will trickle down to tenants, and hopefully make businesses more profitable as a result.

Cedar Mill Mall goes solar

Entasopia Kenya, powered by solar microgrid

Microgrids in Africa: rethinking the centralised electricity grid

Think about it: just two decades ago, many African towns were barely accessible because of the lack of telephone line infrastructure to key development areas. Today, cellular technology has allowed communications to leapfrog telephone line technology and provide communications without expensive, centralised infrastructure.

Mobile technology in Africa

A similar argument can be made about electricity. Now that both solar PV and battery costs have reduced significantly, microgrid technology promises to be an opportunity for Africa to leapfrog traditional grid-based electricity – a typically fossil-fuel heavy, centralised mode of providing power. 

Africa is a uniquely positioned continent, because of its widely-dispersed nodes of development over large geographic areas. As a result of this, the costs of building electrical infrastructure over geographically large areas have typically inhibited electrification, leaving large parts of African countries without electricity – in fact, Africa remains the least electrified continent in the world with only 35% of the continent having access to electricity.

Much of Africa remains disconnected from electricity grids

Microgrid technology is inherently decentralised, as it operates as a smart grid on its own, smaller scale, often using wireless technology. A cornerstone of microgrid technology is solar PV and batteries, since they are deployable in decentralised areas and do not require massive infrastructure to function. Combined, microgrids would seem to carry immense potential for Africa.

Despite this, a report published on PV magazine found that only 1% of electricity investment in the 20 least electrified countries was spent on decentralised energy production, despite at least 40% of electrification being suitable for microgrid deployment in these countries. This presents a massive opportunity – both for the unelectrified communities, as well as for electricity developers in Africa. Microgrids could be a sustainable – and affordable – solution for energy access in Africa.

But are microgrids proven to work? Take an example of Entasopia, a small village in the south of Kenya. The village, disconnected from Kenya’s national electricity grid, is supplied power by a small solar PV microgrid.  This microgrid enables 60 homes, small businesses, and even a petrol station to run, making the area a hive of economic activity and enabling growth even in the remote area. With this technology, schools and clinics can access electricity and businesses can sprout up, enabling economic empowerment in previously isolated areas.

Entasopia Kenya, powered by solar microgrid

Entasopia, Kenya, powered by solar microgrid

The Robben Island solar PV microgrid is also a great example of converting an existing diesel generation system to a smart PV and battery coupled microgrid. Even though the island was already supplied by diesel generators, the cost of diesel meant that the addition of solar PV and batteries still made perfect business sense – it’ll pay itself back in about 5 years. The island’s activities – including the bustling harbour and desalination plant – are now powered almost entirely by clean energy, and the ecologically sensitive island is no longer affected by the diesel and noise emissions from the generators.

Robben Island solar PV microgrid

Robben Island solar PV microgrid

The fact that microgrids make business sense not only for completely disconnected communities but also for those with existing, fossil-heavy grids (such as Robben Island) show demonstrable effectiveness for further applications – such as mining. Mining activities can now rely on PV and battery coupled microgrids, where previously they relied on diesel generation. These microgrids provide a solution that can not only save mining operations money, but also reduce the environmental impact of the mining activity.

SOLA Future Energy is a proudly African company, and we believe in the potential that affordable, clean energy can bring for the whole continent. Despite its historically slower economic growth, we believe that Africa is in a unique position now, particularly because of the way in which new technologies can assist the continent to spur development. Get in touch with us to find out how microgrids could assist your business or community.