juwi Renewable Energies South Africa foresees the growth of hybrid power in Africa, where the majority of state-owned power service providers cannot cope with skyrocketing demand. African Mining Brief hears how different economic sectors are responding to this ‘unconventional’ source of power, in an interview with juwi’s Business Development Manager, Monya Bassingthwaite. juwi Renewable Energies in South Africa is part of the international juwi Group, one of the world’s leading renewable energy companies, which is focused on Solar Energy and Onshore Wind Energy.
AMB: You are bringing a ‘game-changing’ power solution to Africa, would you kindly elaborate what it entails? How is it different from what is currently on the ‘renewable energy’ space in Africa?
MB: One aspect we’re seeing consistently across most of the countries in sub-Saharan Africa is a weak/poor grid (transmission and distribution) which then limits amount of generation capacity on the grid as well as the ‘reach’ the grid has. There are however various renewable energy offerings across Africa. These include solutions such as providing access to energy for residential homes and rural electrification schemes for when there is no grid to access.
Our solution is aimed at commercial and industrial users (such as mines) which have a high energy consumption and are largely reliant on fossil fuels (such as diesel or HFO) to operate due to a weak or unavailable grid. Our offering provides a solution to decrease reliance on these fossil fuels. Our solution is a full turnkey Engineering Procurement Construction (EPC) offering of adding Solar PV with an option of adding energy storage to the fossil fuel power station. To note however our solution can also be added to grid-tied off-takers as a captive plant concept.
AMB: With regard to energy-intensive mining operations, specifically, what do you offer?
MB: Our offering includes adding Solar PV with an option of energy storage to either the fossil fuel power station or the grid. We guarantee uninterruptible power supply via our hybrid power solutions.
AMB: A mine in Australia is running on completely hybrid, completely off-grid. You did provide this solution. Tell us how was this achieved?
MB: The DeGrussa project for Sandfire Mines in Australia was developed by our sister company juwi Australia. They also completed the EPC, and are now operating and maintaining the plant. The Solar PV plant size is 10.8MWp, the energy storage is a lithium ion battery with 4MWp (1.8MWh) which connected to 19 MWp of already operating diesel gensets. The project was subsidised by the Australian Renewable Energy Agency (ARENA) as the PPA duration is a short 6 years. We believe there is a large need for this solution in Africa where there is large reliance on fossil fuels.
AMB: What can you inform mine owners (investors) in African countries about the benefits of hybrid power?
MB: There are various benefits from having hybrid plants. From a financial perspective, there is a direct cost savings due to reduction in the use of fossil fuels. The Sandfire project is currently savings around 5mn litres per annum which is about 20% of their diesel usage. Another benefit is being able to forecast your energy cost and therefore hedges against volatility such as diesel price, transport, exchange rate, current and future costs of CO2. From a technical perspective, benefits includes energy security, power quality (voltage, frequency) and detailed monitoring (juwi has developed a SCADA system which allows for very detailed monitoring).
AMB: We gather you have shifted focus on projects outside South Africa. Which do you see as potential growth areas (sectors)?
MB: We see a few key growth areas. The first key market for us is competitive tenders of pure PV projects which feed into the countries nation or municipal grid. While we see this as a growth area, our concern regarding these countries is the weak grid and therefore the limit PV MW’s available. Another key growth area is the commercial and industrial sector (including mines) which we’ve mentioned above. Given the rapid decrease in PV pricing, and the often high diesel and HFO costs in sub-Saharan Africa, we feel that this is a sector that has significant potential growth going forward.
AMB: Other companies are becoming increasingly frustrated with the slow pace of having necessary paperwork in place and also inexplicable dithering in making decisions on critical projects on the part of government. Have you also had a similar experience? How does this affect a company?
MB: We have a few projects tied up in the same process. It has been a frustrating process and created much uncertainty within companies and at shareholder level in South Africa. We are however are diversifying our portfolio and are currently busy with projects outside of this process in both South Africa and rest of sub-Saharan Africa.
AMB: What would you like to see governments doing to ensure that decisions on projects are made on time and implemented as such and contribute to economic growth?
MB: It is crucial that the PPA’s for the projects be signed and work start on the projects as there are thousands of direct and indirect jobs that would be created. Also, currently there is about a trillion rand sitting on balance sheets in companies in South Africa which really illustrates the low investor confidence in South Africa. A positive move by government to sign PPA’s could create a general positive effect on business confidence.