Recording and presentations: Status & Opportunities for solar energy development in Southern Africa Development Community (SADC)
26 November 2019
Automated transcription. (It may contain errors)
Unknown Speaker 0:27
Hello, good morning, good afternoon depending on where you’re joining from. If you’re here to watch the APA insights webinar on states and opportunities with solar energy development in southern in the southern Africa development community, you have come to the right place, as you can see on your screen. So we’ll wait for a couple of minutes to start the webinar. Proper. But before that, I’ll just give you a few few clues as to how this webinar will go. And also, I’d like to let you know that you will receive the presentation slides and the video recording of the webinar. So that’s not to say that it’s a good idea to just wait for that and just go now I’d say be best for you to stay with us because today you have three experts in these markets that may comfort sovereign Africa development community, and it’s your chance to ask them questions life and you don’t get a get an answer. So stick with us. If you have been in our webinars before, you probably know how they go. So each speaker will probably have will have around 10 minutes and then we’ll answer your questions like how do we send your questions you send your questions through the q amp a box, which is At the bottom of the screen. We also have a tradition here at APA insights, which is to use the chat function to share where we’re joining from. So I’m here with my colleague, Sally from Madrid, Spain. So don’t be shy. Let us know through the chat function where you’re joining us from.
Unknown Speaker 2:28
So right I think,
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just wait a few seconds and then I’ll get the each of the same tools to introduce themselves briefly. And then we’ll start with the first presentation which is by by Donnie de
Unknown Speaker 3:03
Alright, well, you could start with the introduction. So if I Could you briefly introduce yourself in a couple of sentences.
Unknown Speaker 3:15
your microphone is on mute by the way.
Unknown Speaker 3:23
There we go. Hello, everyone. Thank you, Carlos. It’s a pleasure for me to be part of this team expects. My name is Linda, I’m from Zambia right now. I mean, it’s like a Zambian. I’m a freelance energy consultant. And they’ll be talking about basically the status of PV sector in the in the static region today. Thank you.
Unknown Speaker 3:53
Thank you very much. Money could Would you mind introducing yourself briefly
Unknown Speaker 4:00
Thank you, Carlos maneet, of all from Cape Town. I’m the CEO of energy partners solar. We are one of the companies in the energy energy partners group specialising in commercial and industrial solar installations in Africa.
Unknown Speaker 4:18
Thank you very much money. And last but definitely not least, Tony, if you could introduce yourself and get ready to share your presentation because you’ll be the first one to present.
Unknown Speaker 4:30
Okay, so I guess you can hear me so Hello, everybody. I’m Tony to you. I’m the founder, CEO of renewables in Africa. I be telling you what we are, and I’m sure some of you hopefully will have seen us spamming them with some information about the sector across Africa.
Unknown Speaker 4:48
Great, well, if you could start sharing your presentation,
Unknown Speaker 4:51
okay, your first offer.
Unknown Speaker 4:54
Okay, I will do so. So let me just do that.
Unknown Speaker 5:00
Can you see them just maximising now?
Unknown Speaker 5:02
Yeah, kid, you need to get a full screen and then we’ll be good to go.
Unknown Speaker 5:09
Okay, can you?
Unknown Speaker 5:11
Okay, excellent. So
Unknown Speaker 5:15
that’s the presentation we’re going to be going through. So I’ve decided that I’m going to be talking about the status of the, of the sector across Sadek. So the southern Africa region. And then I’m sure my colleagues, Isaiah and Manny will be will be touching on some of the opportunities and some other markets as well. So, so just to take you very briefly. So that’s what we’re going to be discussing today. So understanding voiceovers in Africa for people that don’t know it, or also be having a good reminder what it is we cannot some statistic looking at the Sadek region, where are the key markets, obviously, we’re going to be talking about South Africa in the media. So you can imagine already That’s, that’s part of the market. And just a brief idea about the other segments that will be covered, I think definitely one that will be covered by my colleague Manny here and looking at an idea of what regulate regulatory frameworks are in place. And we’re going to be time for to conclude. So I always like to say to people that it’s good for you to the celibacy, what is driving me and the team that worked with me. So basically, that’s the image I saw in 2008, which was just mega familiar with this image. So when I saw that that’s what single handedly changed the course of my career. I was an automotive engineer before I decided to go a full flow into into green energy and contribute to turn Africa to the image that we see on on your left to the one we see on the right, which is obviously a lot more Let’s say bright right. And that’s what makes me feel happy, proud and hopeful. And obviously, we want to achieve that. The 2040 is a silly, I don’t know, but that’s the objective we given ourselves to the mission that we’ve given ourselves is to bring back power into Africa. So remember that Africa water is we are a two in one company, right? What does that mean? It means that we are a clean energy engineering consultancy, right, looking at providing particular additional services to a client who are developing investors and product owners, and also providing market and market insights, as well as technical strategic advice. And as anybody will know, we also a clean energy media platform, what do we do we promote and raise awareness about the gospel. We call it an Africa so we see ourselves pretty much as the Africa clean energy pack from moving us to right into the topic I don’t need to introduce anymore because Carlos has already done that. So the the Sadek region, what do we know about that? So if we looking at what Irene has been telling us, right, so they saying that the sector has the potential to generate more than 20 terabytes of electricity per year. So obviously, when I could know, anything, just to put a little bit more into context, I represent more than 33 time, the whole of Africa electricity demand that was in 2012. Obviously, we are a lot higher now. But at least it gives you an idea what we’re talking about in terms of the potential. Now, how does that translate with regard to what is the instal capacity that we see the
Unknown Speaker 8:52
region if you look at this,
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on the map on your, on your left hand side, that’s the red part has built about Two gigawatts of solar only in six years old started roughly about a 2012 or 2011. Why 2011. And Manny maybe Can, can step into that. That’s the whole impact of the ROI PPP programme in South Africa. Right. So that sort of has changed the the face of the sector, not only inside, but also the whole of Africa. And the one thing that we can see in this map, right, the biggest region, you can see, it’s North Africa, where we have quite significant to live in southern Africa. And what is common in those two regions, it’s very important to know. So what is coming as you can see here, the evolution of the year yearly solar capacity instal is that both region have actually both technology that are related to solar, because I know most of the time when we say solar PV, it tends to refer to solar PV, but don’t forget about sort of sort of CSP as well. And that’s the red part that you see there. Know that the map is showing the whole of Africa in terms of the data installation. But the reason I wanted to have you there is to show that actually the CSP is also very much present in southern Africa, a game that’s not Africa where we have 400 400 megawatt director rest, obviously, it’s a solar PV, everybody would know now it’s moving, try and look at the key market. So you can see from both the table on your left hand on your right, not surprisingly, there’s actually one market that dominates the region. And there’s another one that I think maybe some of you will not know about that but there’s another another market, it’s a little bit smaller, but looking at the population, it’s not insignificant. So we talking about South Africa and Namibia here. So those are actually the two market that we see those are the two markets where we have seen Significant solar, obviously in contact with Africa, right not not on the global context, where there’s a lot of room for improvement. And we can see that South Africa market represent 90% of the solar in solar installed. And that you can see where I was saying that we have about gigawatts of, of soda of soda in the region. There are other countries in the region that are thinking about solar, but they’re still thinking. So he hasn’t been implemented that much yet. They may be some odd project here in there. But as a significant effort, I think there’s still some action, some action to happen here. Hopefully, they will follow the leadership of these two countries. Now, if you’re looking at the South African market without diving too much into details. I think anybody that follows sola in Africa will know about the IRA PPP programme, which is nothing but the public procurement programme that was launched by the government of South Africa. 2011 that was the replacement of the feeding tariffs that was initiated initially at on in 2009. And the and the the RTP programme. It’s basically a reverse auction programme whereby obviously you’re bidding for four projects. So when you selected as a winner, you get the opportunity to develop the two to develop the project, signed the PPA for 20 year, and obviously have a title, the title is cap, but as a reverse auction, so you have to bid for that. So and that has been a tremendous, tremendous success for the country. So so far we’ve we’ve had four rounds, right, and we could see multiple Moran was there was a number of technology that was selected and clearly solar was part of it. Solar is actually the second
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second largest proportion in terms of how does it split, the biggest been Been a been the wind. And the good thing is this programme is, you know, and that’s kind of miraculous because in eight years he has sort of generated more than 6.4 gigawatts of, of our renewable energy procured of a more than hundred, apparently not all of them out so that obviously you could see from the from the from it but I grabbed their so which one was I look it to two sola already know we’ve been together so the Africa has been able to generate about 1.5 gigawatts of solar that is currently operational. And there is also about a gigawatt in the pipeline. So the issue though we’ve said Africa is actually a window with decent three lakhs of renewables energy that was coming onto the grid. Obviously, there was an issue with the integration, right because everybody knows that both women’s Are intermittent. So how do you properly manage that that’s something that needed to be that needs to be needed to be addressed. And also with the Escom, which is obviously the national utility because it’s still a monopoly in terms of the generation information inside Africa, the company How does having a lot of wounds and financial issues that sort of brought the programme a little bit into a stalemate for about three years, however, last year, the last minister, which has approved another 27 project, you know, between round one three to four, which was a good good news for the sector, and the even better is actually expecting a new round, that should be announced hopefully, in the early early part of next year. So we’re going to be hoping that project gonna, gonna carry on going forward. So the rip programme which is a big driving force, for the whole sector, in in Africa and as you can see, has been price drop, which has been very impressive, you know, between between the one and for the price has dropped sharply by more than 80%, which is actually very, very impressive. And the other important point which is very important for me particularly, it’s that with the impact of the government of this programme, that’s how boosted the local supply chain right and manufacturing, because one of the, one of the, the main objective to achieve is to make sure that we can develop the local skills and we can give jobs to people that are in the continent, right, not just important. So the rpp programme has been, like a say, a leader in this school of thought and we very much very much appreciate it now. So moving swiftly into the next market, which is, as I say, Namibia. So what is quite important to know about this country is that they have one of the best resources of solar in Africa. You can see more than 2000 kilowatts per metre square per year, and the minimum differentiation and also if you’re looking at the amount of sunshine that the country generate on a daily basis, it’s about six to eight hours versus, you know, you go to Central Europe, so you barely struggle with food that’s twice, twice as much. So that’s, that’s something that’s good to know. What would your country However, they have had issues linked to the fact that they have a small population that is dispersed. So that means that the December should agree it’s actually quite high. Obviously, the cost of electricity was also a very high and they’ve been importing electricity for many South Africa a little bit, little bit of Zimbabwe to the South African to the Southern African power pool of before, but they’ve decided since 2013, to take matter in their own hand and sort of kick kick start the solar and you can see in in about a decade, what they’ve been able to do is actually to produce significant amount of of soda for the country, right? Is we multiply by 20. If you look at the reference point being 2000 2009. And we currently have a tender, ongoing that will generate another 20. Meg, your Chairman, hopefully. So on a segment that I will not cover here and is good because we have auto speakers, and hopefully they will touch into that. in the, in the inside, you also have a huge, huge opportunity. Maybe the biggest I cut into me writing Horn of Africa is actually the commercial end
Unknown Speaker 17:40
is only available, or the power actually goes to either the people, residential or the businesses. So basically, if you can’t tap into the master want to tap into the industry, right? That’s what he and I for me, so potential and the money hopefully we’ll talk we’ll talk about that. You also have the upgrade and I think Isaac done a lot of work into the of the market here. So you might be telling you a little bit more about that. But that’ll be I The moment I sort of South Africa. And then hopefully you will learn a little bit more about that. So I want to leave the presentation here. Light, giving you an idea what kind of regulatory framework we have. And you will see an example of countries that apply some of these. Some of these policies I won’t go into detail about that could have been additional be shared with you all to say that obviously, there’s a variety of policy across across the sector, and it’s helpful to know them if you want to step into this market. So and a couple of our publication that you can see available on our website, the last one being the tracker that we released earlier this year, and we’re going to be releasing another one next year that will be available on our platform. And that’s sold for me Gonna Say thank you for the time. Hopefully it wasn’t too long too boring. I’m just gonna say and good fella which me take you my language. thank
Unknown Speaker 19:08
thank you very much Tony. What’s your language called again? Where is it from?
Unknown Speaker 19:13
Okay, my language is called batphone and just to keep you guessing is coming from the the best ever African football nation so I guess
Unknown Speaker 19:26
I think we’ll have a room for disagreement here.
Unknown Speaker 19:30
Whoa, I think people can disagree but you have to look at the facts. So how many cups and how many title that that’s I should go by right? Just I probably said Brazil what when it comes to Africa after eg.
Unknown Speaker 19:46
Good Alright, so one in the interest of time we’ll move on and do the next presenter who is money. Money I hope that you are better. We can’t see you. But maybe Maybe you’ll be able to share your screen and on mute so you can present next wave for a few seconds otherwise, if you’re having technical issues we can get a sire to present first. Let’s do that. Yeah, so many they will buy the song 10 minutes to sort out with Danakil problems you’re having and a Sire, if you don’t mind sharing your screen and started your presentation, that would be great. And I just like to remind everyone, this is your chance to ask questions. So go through the q amp a box and post your questions there
Unknown Speaker 20:47
Unknown Speaker 20:48
any other things if you want to chat with the other, you know the other people in the audience and and you know, Max, just like that, you can go Do the chat box with questions, please through the q amp a box. So I say it over to you. And we will definitely send you the presentation slides and the recording as well. So, feel not so nice if your microphone is muted. Yeah. Yeah, I can, I can hear you and I can see your presentation. So.
Unknown Speaker 21:36
Okay, thank you. Great. So, like I said, I’m so happy to be part of this team. And I know Tony has mentioned quite a number of issues that is happening in the Sadek region. I’ll just take a different sort of picture. I’ll try to look at some of the projects are currently currently happening.
Unknown Speaker 22:01
My next slide just shows the content of what I’m going to talk about I’m look at the background now look at the solar potential in the region, and also try to see what projects have come on board of late. And also, I’ll just highlight the southern Africa pop energy instruments embedded in the in the legal and regulatory framework. Now I mentioned I think one or two challenges that the region is facing. So you can see from my first slide that there’s been a trend, which is, of course very exciting. In the sense when you look at things toward renewable energy capacity, that has been part of the energy mixing the Sadek region. This graph shows you from 2008 you can see the dominant He’ll have hydro power, dominating the energy mix. Most of the static countries, there’s a lot of water here in the Sadek region. So, most most of the countries have good hydro power plants and and from the past hydro power has been dominant in the in the energy mix, but from from the year 2012 you see wind and solar creeping in slowly and you could see that by last year 2017 to be specific
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to share of
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solar and wind was quite significant and, and distinctive, which is I think, very exciting to see because this is what we want to see, especially that now the region is suffering from from electricity problems because because of the drought. So we really want to shift to a more reliable source power and the Slide is asked to show member states in terms of shares of the various technologies that each member state has. This is as of 2018. That’s in the Sadek region. And Of particular interest, I think you’ll see that South Africa has been in the lead, like my colleague Tony mentioned, they’ve been very active in trying to diversify the energy mix. And you can see that they already have wind already in the energy mix, good proportion, also solar PV and, and solar CSP. This is also growing, especially in South Africa, but you will not not you’re not sitting in some most of the member states Sadek region. You can also see that a media has has had a significant amount Solar about 52.5 megawatts there, which is quite impressive. And we’ll see later on what kind of projects that are involved in. My next slide, basically just trying to highlight from the solar source map, this is a sub Saharan Africa, photovoltaic Park potential. But my my focus would be on this on this on the Sadek region, the countries that just highlighted, you see that the potential is really high generate electricity from solar, and this is very encouraging. And I think this This assures would be listed as at the region is ignored with abundant sunlight to produce enough electricity in terms of the member Its contribution to the to the region. energy through sola Angola which has been was been dormant of the past. Recently as has become active, we are expecting about 600 metres by 2020 2022. From the current 10 metres that they have, this was recently announced. Botswana also is working in collaboration with Namibia plans to develop about five gigawatts of solar capacity over the next two decades. Of course, Zimbabwe recently issued a request for qualification for the development of two PV plants, each 500 megawatts combined 200 megawatts. So we are seeing these projects coming up on site and for the region was the southern Africa pop who actually have predicted that they expect Over 2000 megawatts to be added to the region’s greed by 2022. So with these projects, it’s really giving hope to the countries and, and its residents DRC equally, was dormant. But the Ministry of Energy and the hydraulic resource of DRC signed a partnership with 400 metre solar power plant, which is exciting for us also in the in the Shaco province of DRC. These 40 megawatt solar power that that will be connected to the grid. This is exciting. Of course, the snail be managing these foods would agree in terms of what teenies was London former Swaziland you also see that they’re also not quite there is affordable. Lot of solar generation capacity expected by 2020 and processes ongoing. A list of pre qualified bidders for tender work was just recently announced.
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In lesser to equal. We have activities that are happening in my thinking district. We expect some week soon after some speed studies completed. We hope we can have some megawatts from there as well. Amanda Duska has also joined the World Bank scaling solar programme which I think countries like Uganda and Zambia have been on and progress will, I think producing the lowest tariffs on the continent. So we are hoping that Madagascar in also continue and contribute to electrification in Sub Saharan Africa. Malawi, Malawi has had a 55 megawatt solar PV plant. They’ve been some activities there through the USA Power Africa. They implemented the solar home system programme, where they working with the Ministry of Energy in Malawi. We are bringing in solar home system to be distributed especially to rural, rural areas to encourage access to electricity. We also expect a 70 megawatts of solar capacity to be to be developed soon. 21 international companies submitted beats to this project. So this would be exciting to see my life so start contributing to the region’s power system. For Mauritius, a 16 megawatt grid tied solar power plant was commissioned led ca in February Countries ending to to to have a generation mix from 18% to 35% by 2025, the ones to ensure that they bring in more renewable energy mix by 2025. processing. Everyone is looking forward to Mozambique he I think, has been very active as well 14 ago and was recently commissioned in August in October. And the IFC and the country’s politics are also planning on to build small one good solid packs across three to five different sites. These would be ranging from 10 to 15 minutes site, and the cumulative output would be about 60 minutes or so. Maybe I already mentioned the Namibian was one our plans of putting up five digadz sola project And the next decades and they are not just lifted there, they issued a procurement point been in power producer for the element of a $20 million solar PV power plant, which was issued I think in October and this will see a 20 megawatt added to the greed in the media. Also, five Mingo it was recently commissioned him to produce solar power plant and this already has added to two degree but nothing wanting to notice that the facility at which this plant seeds as a capacity to go up to 27 megawatts, so, we expect that it can be scaled up and we can see more megawatts coming from from from from the medium media would see shows were expecting to see Africa space floating solar power plant, which will be located in the province of lagoon and the estimated to be about three to five megawatts. This would be exciting to see and the and just learn from the experience. South Africa like Tony mentioned, like I also alluded to earlier in my my opening remarks has been a giant of solid Southern Africa. They been leading this this
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this fight and I’m glad to report that there are already I triple our IPP produces tremendous results still producing tremendous result. The Department of Energy in decision is actually 140 megahertz already I wanted to like a bus to come online for the $300 million of projects and advantage that they are being both selected. V and CSP. So this is amazing for, for the region currently South Africa, I know that they’re really assisting the region so much. Even they are devastated that the region is facing some they’re currently importing about 300 megawatts from from South Africa. I think it’s because of such efforts that were able to go through as a region. For Tanzania Tanzania has been quiet in the in the solar the solar business, but I think they they are up in the French Development Agency, FDA and the government of India has committed to financing a 150 megawatt of solar PV and 50 studies
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in progress for for this particular project.
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talks of what 60 minutes needs to be to be done in Tanzania. This is still under discussions, but we hope that this can Take off, and we can see Tanzania contribute to the region’s power issues. With Zambia Zambia has recently come on board as well with the World Bank scaling solar programme and get fit programme that was supported by kids who have Gemini and recently, Sandra commission about 88 megawatts from the from the scaling solar programme. They’ve awarded about hundred and 20 megawatts of about four, five projects. Cumulative to 120 megawatts which is yet to be developed, but this has been awarded. So we expect in total about 200 plus megawatts of soul of solar by 2020 2021.
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Facilities imbaba equally the being quite well
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Infrastructure Development Bank of Zimbabwe issued a request for proposal to seek partners for the development of construction of seven solar powers, the combined generation of up to 35 megawatts. So with some bubbles, so taking fire fighting the fight, we expect that the region who will have increased generation capacity with regards to solar PV and when you look at the regulatory and the legal system from of the Sadek region, the electricity generated in the region is managed by Southern Africa top in this study countries, how they treated that design by virtue of being members of Saudi, they, they also members of Southern Africa pop Of course, I know some countries that are not yet members of Sup but they are members of study. But the idea is that as a members of study, you also contribute to Southern Africa pop was an organisation and in the in the pool has as developed some some protocols or some energy instruments that guide in terms of the whole process of energy security and everything else and one of them is the revised the original indicated strategic development plan which was objective is to ensure any security in the region and also ensure access for rural need for rural needs and development. They also have static image protocol which deals with modernising national and regional policies, and also the image cooperation policy and strategy, which ensures is effective system management of the network. Also the aspect of making these public activities viable also have original energy access strategy and Action Plan, which looks at harmonising some of the policies laws and regulations, especially dealing with issues to do interconnections and image planning. So this is just a summary of some of the instruments that that depop uses in terms of managing and and ensuring this unexpected flow of power within the region. Well, some of the challenges that the region is facing I think, the first the first one I wanted to talk about is this aspect of low tariffs. And this has been a major issue because this has resulted in this pie tivities being
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commercial and viable
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number of polities in the region of the Northeast They’re not viable commercially, they can’t not doing business. The tariffs are so low. So you find that the utility buys power from neighbouring country at a higher tariff, but then subsidises that time to Sonic parties, the citizens of its customers within a particular country. And they keep making these losses. And this has a very big impact. And it does trickle down to the infrastructure of these utilities, electric transmission systems, distribution systems. They’re all dilapidated. So the tariff has been a big issue, big discussion. It’s been politicised, it’s been everywhere being talked about reading this one of the biggest challenges that the region faces. The other aspect is, is we we look Enough technocrats skilled
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experts who can prepare documents
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these countries will have very good projects, but then there are no experts who can prepare very good bankable projects that will see some of these projects financed. And this is a this is another issue that the region is dealing the issue also of purchase agreement. That’s another issue. This is like a new thing that has just come to the region and everyone is grappling trying to understand what what this is, I think with the flow of information in the coming you know, international organisation, this is coming to light and being understood. You also know that some of these countries they do not have sound regulatory systems in place. And this is the challenge it does not attract investment. So when an investor comes in finds the regulatory the legal system in a country is actually sometimes absent or not, not affecting investments usually runs away. But also the aspect of pricing and infrastructure. We’re dimensioned is the issue of infrastructure has been an issue find that with all these projects have mentioned that are coming online. There’s not been any mentioned to upgrade the metric system. So, you find that Zambia for instance, is is investing 2500 megawatts of solar power, but then how good are they able to take it to the green or can the green handle the extra the extra spotlight is coming on planet the grid the metric might not be able to handle the excess power. So this has been an issue as well and and it requires investments. So we are looking at investing mostly in the network, but the network can be able to handle and moreover, looking at an intermittent social source of energy, a soul is quite intelligent. So you need this cable network to be able to handle these issues. And aspect also is the aspect of standards and, and testing facilities, quality assurance, we’ve had challenges in this investment coming in and they put up in my radio they put up the PA system within months system shuts down because the system equipment that was installed is below standard was not tested because there’s no quality assurance systems in place is not important to test some of these some of these issues. So they’re quite a number of challenges that I can mention that can go on and on. But I think I’ll leave it here for for now and now. We’ll come questions. Thank you. Thank you
Unknown Speaker 41:54
very much. If we do a presentation, so think Well, we’ll start with a few questions. So
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there was a question.
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here actually, that was about the
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framework. Oh, hang on, it seems that Manny might be coming back so you might be able to relive his presentation. Okay. Right.
Unknown Speaker 42:23
Unknown Speaker 42:25
Good. Good morning, guys. Sorry for all these technical problems. I’m not sure what it is but glad to be glad to be here. Let me just try and share
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Unknown Speaker 42:42
Yeah, I can see.
Unknown Speaker 42:44
Is that good?
Unknown Speaker 42:45
Yeah, that’s good. Yeah.
Unknown Speaker 42:48
Okay, great. Yeah. So let me try and make this quick before the next technical breakdown on the side. I don’t know what’s causing this. Thanks, Tony and desire for your input. And I think a lot of the stuff That the other panellists referred to, you know, it was a lot of a lot of the material up to now has been on the utility scale market. But there was a couple of references to also the CNI market. And that is energy partners solar, which is my company. I’m the CEO of energy partners solar, that is the market that we play in. So energy partners as a quick introduction, we actually don’t only do solar, we also do refrigeration or cooling and steam and water. But what we want to do is sell the most economical utilities in Africa. And as you can see, EP Sala is then one of the companies within the EP group. So let me quickly go on to EP solar. We’ve done some interesting work we believe maybe we have the biggest rooftop PPI in South Africa power purchase agreement, 2.4 megawatts if anyone knows of a bigger rooftop BPA in Africa, we would certainly like to know. But we’re quite proud of that system. And you guys refer to the regulatory frameworks. That system was built at the end of 2017, old middle 2017 before the one megawatt limit that was imposed in South Africa for rooftop system. So we were able to finish that system back then. And there’s a couple of other clients. If we turn to the South African see and on market attorney, I saw your figures I’m not sure whether you come with a you included this one Giga, what in your fingers of the total footprint that’s been both in South Africa, we estimate we estimate that that one gigawatt has been both in the CNR market in South Africa and you can see the up into 2018. You know how the footprint was expanded every year. It’s growing rapidly. And we estimate by the end of this year that we should be close to one gigawatt both in South Africa, which is still only 10% of what we estimate the rooftop or the CNI market is in South Africa. So we are still at the, at the start of this journey in in South Africa. Go to the next slide. There is some insight into some African terrorists, as you can see,
Unknown Speaker 45:28
already by the end of 2020, that that we would we and other companies like us will be able to, or actually are already able to offer grid side ppis in the commercial industrial sector, that that lower or cheaper than any of the grid rights currently in South Africa. And in some instances, it’s quite, it’s quite a lot. You know, we see I’m a commercial industrial side we see. We see discounts to the group off between 30 and 40% easily. So it’s definitely very feasible in South Africa any way to to do a CNI ppas. If we go if we go further what, you know, I think the next big thing that we’re looking forward to, and we’ve done an analysis on that is to understand when will grid and storage in a portable grid and storage start being lower than the grid right? And we estimate by 2023, we should be very close to a situation where potentially you could go off grid if you if you have regeneration capacity, and store the energy at a lower cost then than the current grid. Right. So given all the all the issues and political issues around acecomm in our country that I’m sure you’re aware of. We on the commercial industrial side, companies are really looking by saying look, if you can’t afford Blimey with I will take my my company or my factory off grid if possible. So that is definitely something to look to to watch out for. I don’t think it’s the answer, we should be working with the grid. But South Africans, like all Africans, you know, are quick to make a plan and if if, if they are going to be forced into a corner a lot of our clients already saying or saying to us well, then I’m going off grid and and nine South Africans, that’s certainly something that we know you know, they’ll do so interesting to look at this and and as I mentioned that definitely not the optimal answer. The optimal answer in South Africa and I think for all of Africa is to is for the grid, or whoever is in charge of the utility grids to work with the with our clients who wants to get into embedded generation and and make it equitable for everyone in the market. That’s it me I think the view of our industry in South Africa, companies like us, we we we constantly communicate to government and want to work with government. But Up to now, you know, nothing is really, really happened. I think it will die in future. Let’s Let’s leave it at that. Another thing that’s slowly making it that we are seeing in South Africa is Nick metering where some of the municipalities in South Africa do actually refund clients if they push some energy into the grid and we’ve seen as you can see the internet you can see my screen they on the net metering tariffs, I mean, it’s it ranges from weight on parity with the grid, the grid is wondering 27 and in Port Elizabeth and also Mandela Bay, you’ll get refunded at 127 if you push energy back into the grid, but city of 20 or Pretoria, they only give you 10 scenes. So you can see it stole a wild swing between different municipalities and these all the municipalities that that does give you something The majority by far the majority municipalities gives you nothing if you push, push any energy back into the grid, once again and opportunity to be explored in future because we have many clients with excess space, who could be generating energy that could be, you know, pushed into the grid to alleviate pressure on the grid. I referred to this earlier by the end of 2017 in South Africa, a one megawatt limit, one in the eye limit, you know, 1.3 1.4 megawatt peak limit was imposed on on embedded generation, which means, if, as soon as you wanted to go over that you actually apply for generation licence, which was just not being issued. So, so these two of our clients were both of those clients. And that’s now recently there’s more political wall from government to actually enlarge the embedded generation systems. These are two systems that that we both and as you can see, both of them has got a
Unknown Speaker 49:58
significant further potential. Especially, I think the one on the right, we are now looking at taking a 1.2 megawatt peaks is 6.5 mega watt system, which could potentially be the biggest in the southern hemisphere. We’ll see, we’ll see where that goes. But not only our company, but many other companies. I’ve got clients where we, where we couldn’t pull the size of system that was justified by the light of the client. So So as this with recent political vote, we should see a lot of these further extensions now coming online, across South Africa. And they largely are thought I think is is specifically mentioned to ppis that that weren’t coming off the ground. We’ve been very successful on the PPI front. I think there is a and that’s what I put down there. There’s a couple of things that clients, especially commercial industrial clients, she just looked at and we found if you if you If you base your negotiations or your proposal on these principles, you should be successful. So firstly, to be flexible in type of model, you know, it’s not only a PPI, sometimes on proof wrinkles, but also want to earn a part of the system. So come up with innovative ways of making that happen, then be very clear on tariff escalations. And what we do is we fix those that have escalation so that everyone knows what what the info I think a lot of clients don’t want to enter into a PPA without, without a very, or they should have a very transparent way of getting out of the BBI contract. So what we do is we predetermine all by our values, and we include them and we include those values in the contract. And clients can then get out at any stage. We include a minimum generation target and then most important, the last point is to potential clients should verify the track record of of the supplier and not because a lot of people are running around saying they can do ppis but But make sure that you understand way that both an actual solar system under a PPA, it wasn’t a cash project under a PPA, don’t talk to those to those companies and understand when they were there was a good and transparent process that was being followed. You know, that would be our advice to anyone out there looking for a PPA. And then lastly, I think a lot of clients are are worried that these ppis in actual fact is just the lease which then goes on to the balance sheet, which then impairs your your ability to borrow money, and they will just threaten the path which the first statement on accounting, why sola ppas, publishes creamiest he does not go on to the balance sheet. So I’m not going to go through the detail of that but you know, a number of our clients wants to do a PPI but are worried that this is going to end up on the balance sheet and impair the ability to borrow money. So sola ppis definitely does not go into the balance sheet and I can answer questions on that all sorts in three slides. And that’s me guys, y’all. Thank you one. I don’t know, we haven’t got a lot of time. Thank you very much.
Unknown Speaker 53:05
Right. Thank you very much for your presentation. Manny. Very interesting. So I had no idea that they’ve lost one gigawatt of emotion and industrial installations in South Africa. So that is very significant. So what’s the total size of a South African system?
Unknown Speaker 53:23
In terms of capacity?
Unknown Speaker 53:28
Thank you. You’re on mute, Manny.
Unknown Speaker 53:32
There we go. I’m sorry, Carla. Just Say that again. What’s the title
Unknown Speaker 53:36
that they’re trying to instal capacity in the South African? Great. Yeah.
Unknown Speaker 53:44
Unknown Speaker 53:45
roughly around nine
Unknown Speaker 53:46
to 60 gigawatts, but the problem is only off of it or less than half of it is currently operational. Right. But But yeah, I’m, as you know, I’m in the CNR market, not an expert. Maybe one of the other guys actually has
Unknown Speaker 54:00
No, I just want to put into context and how how significant that is and Okay, so I’ve seen that Isiah has been answering questions on the q&a box, which is great, but let we have a few minutes and let’s run through the questions that remain. So a question by is eight hour. Khaled says what is the typical duration of the of a TPA for a CNI customer in South Africa? And he mentioned he quoted a break between 55 to zero point 55 to 0.7. Right.
Unknown Speaker 54:40
Yeah, I suppose the question is for me, so that writers 55 South African scenes, which is the lower you know, make it 60 South African saints, which is about $4 Saints as a starting right, Burkina What are and we’ve seen contracts ranging from 10 years to 25 years. That would be the range and there’s different reasons why clients once different contractors if the longer the contract term of course, the lower you can you can say that right. But some clients are within a lease in a building and the lease runs out within 10 years and therefore, they want the PPI to also be 10 years. So this is different reasons why client one different contractor.
Unknown Speaker 55:23
Okay, and there is a related question, which is whether the acid with the roof owner the end of the contractual period. So what happens after the contract ends?
Unknown Speaker 55:36
Yeah, I mean, the, it’s part of our contracts are written, it’s not an automatic transfer of ownership, the client has to elect to take over the assets. But from our side, we, the way the terrorists are set up that basically the client can take over the asset at a at a at a nominal value, you know, basically At a very small value the client can take over the contract and what we then foresee is that the client will interact with the seller supply in July and in contract so so once once or or just lower the rights to do something very small, you know, just continue with the BBA on a different vices.
Unknown Speaker 56:19
Okay, thanks and you know moving on to other other applications really like to Estonian. Isiah. So what’s the potential for off great sober in net? Or is there a market in Africa? Would you say that off week so that could offer more more potential than you know.
Unknown Speaker 56:43
Okay, I can I can take the question first and I’m sure as I can chip in, so there’s definitely a market for for off grid because the the problem that we seen at the moment, we all say that That’s actually does a un goal, which obviously we backing because the UN represent everybody, everybody. So we say that we need to achieve that electricity access, you know, full capacity by 2030. Right? At the moment, the ratification rate is only low 40%. across Africa, what we know is actually is if we only counted on the greens, right, so obviously, it’s going to take us, you know, decades to get there, if not even never, right, and because grid down below another issue. That means that if we are serious about bringing electrification to everybody, it has to be looking at all the way of doing it. So we talked about the distributed model, as opposed to the central central model. So clearly, and that’s where you have the upgrade, specifically the solar grid mini great tapping in and even into what Manny did say, even in countries that are, let’s say much more Advance economically speaking in Africa lies on Africa. The grid is also having a lot of issues and there’s and personally I know there’s a lot of people I’m, I’m dealing working with that, like Manny said will rather go off grid and they looking at how they can they cannot do that because soda is dropping. So they consider it’s serious serious. The solution and it’s the same story in many other places in Africa. So actually, there was a big big green market off grid. Right.
Unknown Speaker 58:30
You know, and roughly Could you put a gigawatt number on that market?
Unknown Speaker 58:35
Okay, well I can give you is
Unknown Speaker 58:39
Manny mentioned one gigawatt of CNI, marketing South Africa. I didn’t know that. That’s great. I’ve been looking for numbers. Thank you for that. That’s good to me. But I will say equally speaking, if you’re looking at the last five years, so we build about one to two upgrades that that are across obviously the the the whole of Africa The trend will be going green upward. And why am I saying that you see countries you see companies like beatbox that I’m sure lots of you will know in the African market. And more and more impressed impressively. ngg. was one of the big companies out there who has bought mobile so they’ve not done it because it was a bit of a charity mode now is because they see clearly a big a big opportunity there. So while you’re in the last five years, so I can definitely say in the next five, five years, I can see I can see that the figure doubling or tripling.
Unknown Speaker 59:35
Right well that be very impressive. have that be really costly for all the people who will get electricity I saw your place. If
Unknown Speaker 59:43
I can just add in a bit. What Tony has mentioned, currently give an example of Zambia right now. The challenge that we have is not extending the great challenge that we have is having the capacity to plays that positive energy out there. So if we are going to have access, I don’t see governments in southern Africa investing in grid extension more, I see them with more or opening up this mantle of good systems, because they are cheap, easy, and they are easy to scale up. And the challenge that we have right now, extending the grid involves a lot of investment, which currently we do not have. So it’s it’s a, it’s a new business platform for me that I’m seeing in the next five, six years. Most of these African countries would shift from extending the grid to have isolated mini grid and have with systems that I think are more beneficial. Yeah, easy. They, they, the initial cost is, is affordable for for these countries. And so Going forward, I really agree with Tony that we will see expansion in this field.
Unknown Speaker 1:01:06
Thank you know,
Unknown Speaker 1:01:08
Isiah and well thank all of you. I have to say that, you know, I feel like I’m caught in a conversation short, but unfortunately we’ve run out of time. I’d like to thank all of you for your presentations very useful. And, you know, I’d like to thank the audience for actually being here with us. Just small reminders, we have another webinar, which is on solar heat in Morocco and Tunisia. So you can see that webinar on the link to the webinar in the chat box. And that webinar will be talking about the work that those countries have been doing with the World Bank to bring solar heat for industry on on stream so more be interesting to some of you, I hope so. Hand, right. So You know, without further ado, I’d like to thank all of you and and the audience and see you here next time.
Unknown Speaker 1:02:10
Thank you. Thank you very much. Thank you.
Transcribed by https://otter.ai