by Johan Burger
SOLAR PLANT FOR MINING IN MALI
Canadian mining firm B2Gold has decided to set up a 30MW solar power plant in Mali to power its operations at the Fekola gold mine. It has commissioned two German renewable energy firms BayWa re and Suntrace GmbH, for the planning, engineering, installation, and operation of the plant on its site. The system will be equipped with a 15.4MWh battery storage system and serve as an off-grid hybrid system for the mine.
The solar plant will replace three of the six heavy fuel oil generators and reduce the use of the remaining three during the daytime. This is expected to save approximately 13.1m litres of heavy fuel oil per year and reduce the carbon emissions of the mine by 39,000 tons per year.
The battery storage system will ensure reliable operations and allow up to 75% of the electricity demand of the gold mine to be covered by renewable energy during the daytime.
Solar energy has a lot of potential in Africa. While a lot of the original roll-out in solar was for mini- and nano-grids, we have started to see more sophisticated projects being adopted. Cities are turning towards renewable energy sources to reduce their vulnerability to state-owned utility companies that are failing to meet the national demand for electricity. Farming communities and airports are embracing solar energy as a clean alternative to coal- or liquid fuel-generated energy. In addition to having a very low carbon footprint, solar has become a much cheaper form of electricity as well. With the mining sector consuming disproportionate amount of electricity, the move towards solar will go a long way to reduce carbon emissions and bring down the overall cost of B2Gold operations. One gold mining company that can attest to this, is DRD Gold in South Africa, which reported a strong increase in profits but still experienced a 17% increase in cash operating costs strongly influenced by an increase in electricity costs. These developments provide many opportunities for investors interested in Africa. The production of solar panels and solar batteries are still done mainly abroad and then imported at great cost to Africa. This need not be the case. By tapping into these opportunities, Africa will benefit from the advantages of import substitution, with meaningful job opportunities increasing.
USING PAY-AS-YOU-GO MODELS FOR RENEWABLE ENERGY
Some commentators in Kenya view solar and wind as the cheapest options for new electricity capacity. The newer solar and wind power plants undercut the operational costs of existing fossil and nuclear power plants. Low-cost solar has a much deeper impact and often feeds power to specific appliances or electronics in off-grid and limited-grid communities.
Azuri Technologies in Kenya is offering a new PayGo solar-powered TV service. The service includes the TV400, a 32″ television that will enable viewers to watch TV all day and for up to 10 hours at night. The TV also comes with a satellite TV service, “even in areas where there is no grid and no terrestrial TV signal.” Azuri’s solar-powered TV was both popular and useful during the Covid-19 pandemic. Many families use this service to access virtual educational materials.
A PayGo Solar TV buyer also receives an 80W solar panel and a 160Wh LFP battery, which has an expected lifespan of 10 years before any need for servicing. The business model of the service works on the basis that the solar TV is sold at an upfront price of US$82.39, followed by US$1.18 per day for 30 months. Thereafter the system is unlocked, and all additional solar power is free of charge.
Also in Kenya, SunCulture, a start-up that provides solar water pumps for irrigation, recently raised US$14 million to disseminate its solutions in seven African countries. SunCulture plans to distribute its solar water pumps for irrigation in Cote d’Ivoire, Ethiopia, Senegal, Togo, Uganda and Zambia. Farmers will use the equipment for irrigation to multiply their income. This has become imperative because while 80% of families in Africa depend on agriculture for their livelihood, only 4% use irrigation due to the electricity grid's instability. Frequent droughts aggravate the situation.
The solar water pump provided by SunCulture is equipped with 300W solar panels and a 440 Wh battery storage system. These batteries can support four light bulbs, two telephones and a plug-in submersible water pump.
When the first systems were launched earlier, the cost was US$5,000. The price steadily fell to between US$500 and US$1,000. Farmers can acquire this equipment thanks to the “pay-as-you-go” revenue model used by SunCulture, a system that uses mobile banking.
POINT OF INTEREST
- We now see pay-as-you-go models becoming commonplace. Providers understand that as Africa’s people in rural and remote areas are often poor, they cannot afford the upfront capital costs frequently associated with solar energy. The models mostly work based on rent-to-own, where after a few years of small monthly payments, ownership of the structure passes over to the consumer. One example is M-Kopa, which tapped the benefits from mobile money platform M-Pesa to sell to consumers.
FOCUS ON RENEWABLE ENERGY IN BENIN
Benin’s Société béninoise de brasserie (SOBEBRA) produces beer, bottled water and soft drinks. The company commissioned a rooftop solar PV power plant in the capital Cotonou. The installation integrates 352 solar panels capable of supplying ±450 kWh per day and will provide SOBEBRA with a permanent supply of electricity. SOBRERA will use a self-consumption system without batteries, which will also help reduce its carbon footprint. This is consistent with its goal to become a “clean industry”. This investment also helps SOBRERA secure its production capacity in a country where power cuts have become regular.
Benin’s government also banks on renewable energies to make up its electricity deficit. It announced its intention at the beginning of December 2020 to set up a company that will be able to produce electricity or buy it from private operators. The “Société béninoise d’énergie électrique” (SBEE) has the core mission of distributing electricity and should improve electricity supply at the national level.
Eleven private sector companies are currently building eight solar mini-grids in Benin. These will increase Benin's power generation capacity by 13.4 MW and supply more reliable and quality energy to several localities.
POINT OF INTEREST
- Renewable energy is growing in demand and prominence in Africa. The reasons for this are many, such as the decreasing cost, the increased efficiencies of the technologies, the relative ease and speed at which the infrastructure can be installed, the ability to install in remote areas, and the ability to install micro-grids (scale is not needed to deal with massive costs). Large national grid type of infrastructure also take long to be approved and are susceptible to corrupt politicians who want to get their pound of flesh. The climate-friendly nature of renewable energy plays a role to increase its attraction, as does Africa’s massive potential in renewable energy.
BOOSTING SOLAR IN WEST AFRICA
The private sector dominates solar hybrid development in most parts of West Africa. It receives financial backing from development finance institutions, with Nigeria the largest potential market for mini-grids in West Africa. The country received at least US$374 million from international donors for mini-grid development over the past decade. Only 55% of Nigeria’s population is connected to the national electricity grid, and they experience frequent power cuts of up to 15 hours per day. The country had a small-grid capacity of 2.8 MW in 2019.
Lagos-based Daystar Power intends to replace “unreliable grid or too expensive, polluting diesel generators” with clean reliable power. It will be expanding its installed power capacity from 23 MW to 100 MW. Daystar recently raised US$38 million to accelerate its growth in key markets like Nigeria and Ghana and open up in countries such as Côte d’Ivoire, Senegal and Togo.
STOA, a French impact infrastructure fund and one of Daystar’s backers, intends to invest over 50% of its capital in renewable energies across Africa.
SOLARISATION IN ZIMBABWE
Zimbabwean oil company Zuva Petroleum recently announced its goal to become a leader in promoting renewable energy. Zuva will build 180 solar power plants to supply its various sites in Zimbabwe, starting work in 2021. This project will support its drive to reduce its carbon footprint.
Zuva will also channel 30% of the electricity produced by the solar power plants to the national grid through a net metering system. This will improve the electricity supply to the population. Currently, only 32% of Zimbabwe’s 16 million people have access to electricity.
Zuva Petroleum is not the first to solarise its installations in Zimbabwe. Pretoria Portland Cement (PPC) appointed a company in July 2020 to build and operate a 32 MWp solar PV power plant in the province of Matabeleland South. PPC will use 50% of the electricity produced for the operation of its clinker plant, with the remaining 16 MWp to be directed into Zimbabwe’s national electricity grid.
The Swiss embassy in Harare acquired a small 160 kWp solar power plant to supply its residences. Any surplus electricity is sold to the state-owned Zimbabwe Electricity Transmission and Distribution Company.
FLOATING SOLAR PV (FPV) IN AFRICA
Africa is far from fully exploiting its average annual solar irradiation of over 2000 kWh/m2. The continent remains heavily dependent on hydropower. However, frequent droughts increasingly affect hydropower production. Researchers from the Joint Research Center of the European Commission recommend installing floating photovoltaic (FPV) panels at existing hydropower reservoirs. This could help offset hydropower generation shortfalls during dry periods, reduce evaporation losses, and help meet the increasing energy needs of Africa's rapidly growing population.
The researchers found that the total FPV resource potential (100% coverage) in terms of power capacity is estimated at 2922 GWp, more than 250 times the cumulative installed PV capacity at the end of 2020. This is one percent of the 28 GW of pre-installed hydropower in Africa. The total electricity generated by full exploitation of the FPV technical potential (covering 100% of the 146 hydropower reservoirs) is 5293 TWh/year, 50 times more than the hydroelectricity currently produced in these reservoirs.
Envisaged FPV capacities (from 108 reservoirs) can equal or exceed existing hydropower capacities. FPV covering an area of less than 1% of the reservoirs would produce a total of 46 TWh/year. This represents an increased electricity output of 58% compared to current hydropower. Every one per cent of FPV will save up to 743 million m3/year of water and produce an additional 170 GWh.
POINTS OF INTEREST
- As seen when solar panels combined with batteries provide storage and enable use during night-time, hybrid models are increasingly popular. In agriculture, solar panels are integrated with water pumps and other technology to support farmers with irrigation. We also see small wind turbines combined with solar panels to generate electricity even when the sun does not shine, but the wind is blowing. This technology is available at small nano-grids where single houses can and do link wind and solar technology. Similarly, we see floating solar PV installed at hydropower structures, making a considerable contribution to the electricity output of such installations. These types of hybrid models will become the norm because they balance the benefits of the various technologies with the unique disadvantages of each.
- In addition to corporates who are tapping into renewable energy sources, mostly solar, many cities are also now starting to turn towards renewable energy to complement their supply they obtain from national grids that are frequently inconsistent and unreliable, in addition to being increasingly costly. They are also reducing their reliance on diesel generators. These are not only expensive but have a high carbon footprint.
- In some countries, such as in South Africa, authorities provided the opportunity for corporates to sell their excess electricity to the national grid. This does sweeten the initial decision to move towards renewable energy. However, some providers added a markup on the price they pay national providers when they on-sell to consumers. Some operators and public agencies now receive less revenue because consumers increasingly generate their own electricity.
- South Africa’s national provider Eskom finds itself in a difficult position. Eskom and the city authorities they partner with are now investigating ways and means to maintain their revenue base by charging consumers. At some point, we can expect a pushback from consumers as they would be paying for service they do not receive. These consumers were forced to turn towards self-generation due to the inability of current service providers to provide a reliable and affordable electricity supply.
AFRICA TRENDS TOWARD RENEWABLE ENERGY
By 2030, Africa’s energy capacity will equal twice its current consumption. The decreasing cost of renewable energy technologies will drive the shift to renewable energy sources. Despite this trend, a 2021 report sees fossil fuel sources as continuing to dominate Africa’s power mix over the coming decades. Renewable energy sources such as solar and wind will contribute less than 10% of total Africa’s power up to 2030. However, the cost of renewable energy technology decreased in recent years and should drop even further by 2025.
Ideally, Africa’s governments will use renewable energy technology to build renewable energy farms. This initiative would reduce the use of fossil fuels and subsequently decrease carbon dioxide emissions. Building renewable power plants has the additional benefits of creating jobs for professionals and the youth. University of Oxford scientists report that small renewable energy plants have better chances of success than large projects. The plant’s source of funding was another factor, as projects funded by big public agencies, such as the World Bank, tended to be more successful.
INCREASING RENEWABLE ENERGY CAPACITY IN DJIBOUTI
Djibouti recently approved the construction of a 30 MWp solar PV power plant in Grand Bara after a long delay. The preliminary agreement for this solar PV project dates back to June 2019. Construction will be within a public-private partnership (PPP) framework. Engie will develop, build and operate the plant. The electricity generated will be fed into the grid of the state-owned company Electricité de Djibouti (EDD) and help increase the country’s national production capacity to meet rising demand. The project will contribute to Djibouti’s sustainability goals by reducing its carbon footprint and its social development goals by creating jobs. The project will also reduce its electricity imports from Ethiopia.
The Djibouti government also approved construction by Djibouti Wind Company (DWC) of the 60 MW Ghoubet wind farm. DWC is a special purpose vehicle owned by four partners: Africa Finance Corporation (AFC), a pan-African fund dedicated to infrastructure development, based in Lagos, Nigeria; Climate Fund Managers (CFM), an investment fund manager; Great Horn Investment Holding (GHIH), an investment fund set up for development projects in Djibouti; and the Dutch Development Finance Corporation (FMO). The new wind farm will cost about US$63 million and will effectively double the country’s power generation capacity.  
Djibouti sees a capacity-building strategy as essential for attaining its energy independence. The country recently established the Red Sea Drilling Company (RSDC) as its national geothermal energy engineering company. RSCD will develop Djibouti’s geothermal power reserves and contribute to training engineers and technicians. These capabilities will position the country to operate in mining and oil and gas drilling, plus water drilling to reinforce the country’s water security. RSDC apparently plans to become an East African drilling major, tapping markets in nearby Ethiopia, Kenya and Somalia. In the near term, the country remains dependent on foreign expertise. In February 2021, the government awarded a USD 6.5 million contract to Kenya’s KenGen to drill three wells in Lake Assal.
Djibouti’s target is to use its 100 MW geothermal energy capacity to fully supply its domestic market, then become a power exporter. To this end, the country’s government invested heavily in energy-related projects over the past eight years. In 2013, a US$6.83 million loan from the African Development Bank enabled geothermal exploration around Lake Assal, reportedly the most promising area in the country. An additional loan of US$14.68 million in 2016 and a final loan of US$3.22 million in May 2020 laid the ground for the future establishment of a 20 MW geothermal power plant, with the potential to expand to 50 MW at a later stage. This plant will contribute to Djibouti reaching its goal of powering 100% of its economy through renewable energy by 2030.
Djibouti is heavily dependent on its small fuel-based power generation capability, supplemented by electricity imports from Ethiopia, to serve its power needs. As a result, its users consume some of the most expensive electricity in the region, up to six times the price of power in Ethiopia. The new initiative aims to address this issue.
POINTS OF INTEREST
- The march towards renewable energy adoption in Africa continues. At the national level, renewable energy like solar PV and wind is increasingly part of the energy mix. While coal is still a very cheap source of electricity in Africa, the countries needed to import coal now have options and can embrace renewable energy as complementary to their existing sources of electricity. The shift towards renewables is increasingly an easy choice, given the increasing efficiency and decreasing cost of renewables, plus emergent opportunities to create hybrid systems (solar, wind and batteries). Such renewable solutions do not need scale economies. Given the ease and speed of installation in rural and remote areas, they are becoming attractive.
- This holds even for countries that once provided reasonably efficient and low-cost energy, such as South Africa. An unreliable and corrupt state-owned electricity utility is seemingly incapable of meeting the needs of South African consumers. The electricity Eskom does supply is increasingly expensive. Rising costs motivate private homeowners, businesses and large municipalities to adopt renewable energy. This problematic situation boosts the trend towards the adoption of renewable energy to save costs and reduce dependence on a failing provider.
Off-grid power, driven by economic growth, rising expectations, and falling costs for clean energy platforms, is trending in Africa. Winch Energy joined other leading off-grid players in January 2021 to launch its new Winch Energy IPP Holdings Limited (WIPP) platform. The consortium, composed of Total Eren, Itochu Corporation, Al Gihaz Holdings and Winch Partners, reportedly holds Africa’s most extensive mini-grid financing portfolio. WIPP recently completed its funding round for solar mini-grid projects in 49 villages across Uganda and Sierra Leone. The funding originates from Winch Energy Limited and NEoT Offgrid Africa (NOA). Previously, NOA invested more than US$36 million to electrify 25,000 homes and businesses in Ivory Coast and Nigeria. Other industry players and EU agencies also joined WIPP to provide funding.
The partners view the platform as an enabler for rapidly scaling up operations in Africa. CEO of Winch Energy Nicholas Wrigley views the joint effort as positioning Winch Energy as a future leader in large-scale off-grid renewables. He says the funding “stimulates economic growth and improves education and healthcare provision in remote communities.” NEoT Offgrid Africa (NOA) Director Frédéric Pfister sees the deal as positioning NOA as a critical player for financing mini-grids and other off-grid solutions such as solar home systems and commercial and industrial installations.
The mini-grids, based on Winch Energy’s proprietary technology, are “expected to be operational within the next 12 months, providing remote communities with affordable, clean energy and access to essential services.” The project will reportedly connect more than 6,500 customers in Uganda and Sierra Leone, supplying clean energy to over 60,000 people. It also provides for the installation of 6,000 portable batteries to provide people outside of the mini-grid catchment area with clean electricity. In addition, the project will provide internet to the communities through partnerships with telecommunication operators in both countries.
WIPP expects to expand its operations in Africa and aims to reach approximately US$100 million of operating projects in the next 24 months. Winch Energy is also active in Benin, Mauritania and Angola.
POINT OF INTEREST
- We also see increasing use of mini-grids to electrify homes and businesses. Until recently, many consumers had little choice but to remain a captive of the existing infrastructure. This is due to the high initial costs of many renewable energy systems. The solution was new business models to address the financing needs of different types of consumers. These innovative business models include rent-to-own solutions that are attractive for consumers. Larger businesses prefer to adopt a leasing model. This solution converts upfront capital expenses into tax-deductible monthly operating expenses. Leasing avoids large initial outlays and stabilizes monthly energy costs while providing access to more reliable and affordable electricity.
RETAIL GOING THE RENEWABLE ROUTE
The Shoprite Group, South Africa’s largest retailer, recently announced that it now generates enough electricity – about 12,300 MWh – from solar energy to power over 1,100 households for a year. The company placed rooftop solar PV panels at 19 sites in South Africa and Namibia. Shoprite also fitted 649 solar panels to its refrigerated trucks. These generate 760 MWh annually – enough to run 1,040 refrigerators all year. This innovation allows truck drivers to switch off truck ignitions at delivery locations, reducing fuel use, noise, and exhaust pollution while keeping the cold chain intact.
Located at its Basson distribution centre in Brackenfell in the Western Cape, the group's largest installation has a considerable impact on its strategy to reduce its impact on the environment. According to Shoprite, the solar panels at this distribution centre covers an entire soccer field.
The group also replaced fluorescent lamps with energy-efficient LED at R98.3 million (±US$6.8 million) to save 83.8 million kWh of energy over the four years since this change.
The group plans to procure 434,000 MWh of renewable energy per year for the next seven years. Shoprite is the first retailer to embark upon such a strategy, which is reportedly a first for Africa.
POINT OF INTEREST
- Given the vast energy consumption of retailers, Shoprite’s welcome move towards converting both horizontal and fixed surfaces into solar energy production opportunities is laudable. It is not the only retailer in South Africa to take this path. A 2016 Greenpeace report ranked South Africa’s five most prominent retailers, Massmart, Pick n Pay, Shoprite, Spar and Woolworths, on their energy policies. The report used four criteria – energy transparency, commitment to renewable energy, greenhouse gas mitigation and lobbying for clean, renewable energy. None fared well: Woolworths did the best overall with a score of four out of ten. Shoprite received the lowest ranking due to a lack of transparency regarding its energy information. However, South African retailers have since then increased their commitment to the use of renewable energy. Woolworths were early in using rooftops on their owned buildings as energy production sites. Shoprite’s new approach to renewable energy generation is a clear break from the past. Their commitment to embrace low carbon electricity is hugely advantageous to the environment and will reduce demands on the national grid, perhaps easing the challenge to Eskom.
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