South African gas start-up, Bluedrop, receives major funding
Financial close heralds start of construction of a modern state-of-the-art Liquefied Petroleum Gas cylinder manufacturing plant.
Bluedrop expected to create 110 direct jobs
April 2021 – Johannesburg-based South African start-up Bluedrop, has secured an R300-million investment from J. Sassoon Group, a US, Washington DC-based private equity fund, for their Liquefied Petroleum Gas (LPG) cylinder manufacturing plant, in the west of Johannesburg, South Africa. The project is expected to create 110 direct jobs during construction and 35 direct jobs at full commercial operation. Using the highest standards in manufacturing processes along with the latest technology, and raw materials designed to reduce carbon footprint, Bluedrop will be setting a new standard for South Africa’s gas cylinder manufacturing.
Among the many challenges facing the project was that Bluedrop was in a pre-revenue stage in an incredibly competitive and highly regulated industry. However, J. Sassoon Group’s solution-driven management approach complements start-ups’ strengths while strengthening their weakness by utilising its own global network. In addition to assisting with sourcing global engineering firms for the construction, J. Sassoon’s external consultants and accounting service firm, PriceWaterhouseCoopers (PWC), is providing consultancy and advisory services to the project.
Upon succeeding his grandfather as the chairman of the board, David E. Sassoon has taken a keen interest in Africa, continuing the family’s historical relationship with the continent, particularly South Africa. Bluedrop is the optimum start-up to reengage the African market. David E. Sassoon personally mentored and guided Bluedrop through the complexity of the financing phase. The firm financially engineered the mezzanine finance deal to reduce borrowing costs in addition to a twelve-month payment holiday, enabling Bluedrop to accelerate growth and optimise success.
Bruce Fein, J. Sassoon Group’s CEO explained that Bluedrop is the first pre-revenue start-up in Africa that J. Sassoon Group has invested in:
“Our focus is on start-ups, entrepreneurs and midmarket companies. Bluedrop is the type of forward-facing, energetic company we are looking for. We are confident that this is a value accretive investment”
Bruce Fein, J. Sassoon Group’s CE
Commenting on the transaction, Bluedrop’s Chief Financial Officer Kenneth Maduna said, “As an independent 100% black-owned company, we are ecstatic with the investment made by J. Sassoon Group more so for showing their confidence in us and South Africa as an investment destination.” Construction of the manufacturing plant is expected to commence in Q4 2021 and will take 12-14 months to complete.View more
Time to get real: amid the hydrogen hype, let’s talk about what will work
For 50 years hydrogen has been championed as a clean-burning gas that could help reduce greenhouse gas emissions. The idea of a “hydrogen economy” is now enjoying a new wave of enthusiasm — but it is not a silver bullet. Amid the current hydrogen hype, there is little discussion about when the technology can realistically become commercially viable, or the best ways it can be used to cut emissions.
Here’s where we can focus hydrogen investment to get the best bang for our buck.
Hydrogen sucks up energy and space
Hydrogen is the most abundant element in the universe, but rarely is it freely available. It must be unlocked from water (H2O) or fossil fuels such as methane (CH4), then compressed for transport and use. These steps waste a lot of energy.
The world must reach net-zero emissions within 30 years to avert the worst climate change. That means using renewable energy as efficiently as possible to maximise emissions reductions and minimise the land space required. So we must be strategic in how and where we use hydrogen.
Use hydrogen in places electricity won’t go
In most applications, renewables-based electrification has emerged as the most energy efficient, and cost-effective way to strip emissions from the economy.
Yet there are some industries where electrification will remain challenging. It’s here renewable hydrogen — produced from wind and solar energy — will be most important. These industries include steel, cement, aluminium, shipping and aviation.
A renewable hydrogen export market may also emerge in the long-term.
Renewable hydrogen will also be important to replace existing hydrogen produced by fossil fuels. But this alone will require a significant increase in electricity generation, to reach net zero emissions by 2050. This is a major challenge.
What about cars and trucks?
Road transport is one area where we believe hydrogen will not play a major role. In fact, Telsa founder Elon Musk has gone as far as to call hydrogen fuel-cell vehicles “mind-bogglingly stupid”.
In the case of hydrogen-powered vehicles, this will mean higher costs for consumers compared to battery-electric vehicles. It also means far more space for solar panels or wind turbines is needed to generate renewable energy.
Most global car makers have recognised the lack of advantage for hydrogen cars and instead invested about US$300 billion in the development and manufacturing of electric cars. Toyota and Hyundai — the last main proponents of hydrogen cars — are also ramping up efforts on electric cars.
As for trucks, the US Department of Energy does not expect hydrogen semi-trailers to be competitive with diesel until around 2050, mainly due to the high cost and low durability of hydrogen fuel cells.
While hydrogen trucks may have a role to play in 20 to 30 years, this will be too late to help reach a 2050 net-zero target. As such, we must explore energy-efficient options already widely deployed overseas, including electric trucks, electrified roads and electrified trailers.
A truly strategic plan
Hydrogen derived from fossil fuels is currently used to make products such as fertiliser and methanol. Supporting the transition to renewable hydrogen for these uses will be an important first step to scale up the industry.
If produced at regional shipping ports close to aluminium, steel or cement plants, this will provide further opportunities to expand renewable hydrogen use to minerals processing, while creating new jobs.
As hydrogen production scales up and costs fall, excess hydrogen would be available at ports for fuelling ships — either directly or through a hydrogen derivative like ammonia. Hydrogen gas could also be used to make carbon-neutral synthetic fuel for planes.
If an international export market emerged in the future, this strategy would also mean renewable hydrogen would be available at ports to directly ship overseas.
Finally, if the development of hydrogen truck technology accelerates before 2050, renewable hydrogen would be available to power the significant number of semi-trailers that travel to and from shipping ports.
Let’s get real
Renewable hydrogen is a scarce and valuable resource, and should be directed towards sectors most difficult to decarbonise.
Courtesy: The ConversationView more
Government, private sector collaborate to build SA’s Hydrogen Platinum Valley
The Department of Science and Innovation (DSI) is collaborating with companies in the energy sector to carry out a feasibility study for the establishment of a Platinum Valley. The collaboration agreement is led by DSI, partnering with Anglo American, energy and services company ENGIE, and clean energy solutions provider Bambili Energy. The feasibility study, which is the first phase of the Platinum Valley initiative, will drive the planning, design, construction and commissioning of projects related to the development of a Hydrogen Valley.
“The study will support plans to create a Hydrogen Valley along the Bushveld complex and larger region stretching from Anglo American’s Mogalakwena platinum mine near Mokopane to Johannesburg and Durban,” DSI explained.
“PGMs play an important role in polymer electrolyte membrane electrolysis used to produce hydrogen, as well as in hydrogen fuel cells,” DSI explained.
The DSI said the agreement has the potential of creating direct opportunities for economic and community development while contributing to decarbonisation efforts.
Meanwhile, the department believes that science, technology and innovation will play a key role in supporting the Economic Reconstruction and Recovery Plan for South Africa.
The Hydrogen Valley is one of the first projects that will be implemented in partnership with the private sector to support the Platinum Valley initiative.
In addition, small, medium and micro enterprises (SMMEs) will be supported to take advantage of opportunities in the green economy as part of the just transition to a green economy.
“The aim is to boost economic growth and job creation, drive the development of new industries, increase value-add to the country’s platinum reserves, and reduce the country’s carbon footprint.”
Also, hydrogen and fuel cells offer several advantages to the transport sector – comparable refuelling times to internal combustion engine vehicles, longer ranges and space efficiency.
Anglo American is deemed as one of the leaders in initiatives to promote the adoption of hydrogen fuel cells vehicles for commercial use, facilitating the creation of consortiums of industry partners to promote the development of hydrogen freight corridors in the United Kingdom, South Africa and China, among others.
Anglo American’s PGM business CEO, Natascha Viljoen, said: “The transition to a low-carbon world is an opportunity to drive the development of cleaner technologies, create new industries and employment, and improve people’s lives”.
She said the company was an early supporter of the global potential for a hydrogen economy, recognising its role in enabling the shift to greener energy and cleaner transport.
“Our integrated approach includes investing in new technologies, supporting entrepreneurial projects and advocating for policy frameworks that enable a supportive long-term investment environment for hydrogen to deliver that potential,” she added.
Meanwhile, the department said Bambili Energy has played a pivotal role in ensuring that the HySA catalyst and membrane electrode assemblies developed by the HySA Catalysis centre of competence are integrated into commercial products through its partnership with global original equipment manufacturers.
ENGIE, a French company, aims to accelerate the transition towards a carbon-neutral economy through reduced energy consumption and more environmentally friendly solutions.
It has provided co-funding for the techno-economic analysis that will be conducted on identified hubs within the Hydrogen Valley corridor.View more
Environmental plan for construction of SKA published
Amendments to the Integrated Environmental Management Plan required to manage the impacts associated with the development of the first phase of the Square Kilometre Array (SKA) in the Northern Cape, without further environmental approval required, have been published.
“The amendments are necessary, as the proposed construction camps would pose a risk to the optimal functioning of the Meerkat radio telescopes currently in operation,” the Department of Forestry, Fisheries and the Environment said.
The amendments include the acknowledgement of the declaration of portions of the SKA site as the Meerkat National Park; the increase in the size of the land core area; the development of a perimeter road along the boundary fence; and the development of a solar farm to contribute to the electricity needs of the facility.
The Adoption of Amended Chapter 2 and Chapter 5 of the Integrated Environmental Management Plan for Phase 1 of the Square Kilometre Array and Amendment to the Conditions of Exclusion were published by the Minister of Forestry, Fisheries and the Environment, Barbara Creecy.
They were published in terms of the National Environmental Management Act in Government Gazette 44230 (Notice No. 250) on 25 March 2020.
“An amendment to the originally adopted plan was requested by the National Research Foundation, the organisation that is responsible for the development of the SKA.
To support the request for amendments, additional environmental assessments were undertaken and it was concluded that the activities would not impact negatively on the environment.
It was therefore decided that the amendments to the original plan be approved.View more
Minister Barbara Creecy launches South Africa’s Nationally Determined Contribution
30 Mar 2021
The Minister of Forestry, Fisheries and the Environment, Barbara Creecy, has launched the updated draft NDC for public consultation
The updated draft NDC, the cornerstone of South Africa’s climate change response, was approved by Cabinet on 24 March 2021 to be released for public comment. It is South Africa’s commitment in terms of the United Nations Framework Convention on Climate Change (UNFCCC) and its Paris Agreement to contribute to the global climate change effort. All Parties to the UNFCCC are updating their NDC’s in the run-up to the 26th international climate change conference to be held in Glasgow, Scotland, in November 2021.
Under the Paris Agreement, all parties are required to deposit NDCs every five years. South Africa deposited its first NDC with the UNFCCC in October 2015, committing to keeping national greenhouse gas emissions within a range from 389 Mt CO2-eq for 2025 and 2050.
South Africa remains committed to addressing climate change based on science, equity and sustainable development. Similarly, the present updated NDC draft seeks to balance the three structural components of mitigation, adaptation and means of implementation/support requirements.
The latest science from the Intergovernmental Panel on Climate Change indicates that more urgent and rapid reductions in emissions are required by all countries.
The UNFCCC has found that the current global effort is not sufficient to avoid dangerous climate change, and all countries are in agreement that more needs to be done, faster.
The updated mitigation NDC proposes a significant reduction in greenhouse gas emissions (GHG) emissions target ranges up to 2030, with the 2025 target range allowing time to fully implement the national mitigation system, including those elements contained in the Climate Change Bill. It will also allow space for the implementation of IRP 2019 and other key policies and measures, as well as the national recovery from Covid_19.
The 2030 target range (398-440 Mt CO2 e q) is consistent with South Africa’s fair share, and also an ambitious improvement on our current NDC target. The upper range of the proposed 2030 target range represents a 28% reduction in GHG emissions from the 2015 NDC targets.
Eskom recently released a call for proposals to repurpose Komati Power Station in Mpumalanga with photovoltaic panels and battery storage. Currently, the utility is conducting feasibility studies on repurposing other power stations scheduled for decommissioning including Hendrina, Grootvlei and Camden Coal Power Stations
In February this year, the Presidential Climate Change Commission representing government, business, civil society and organised labour met for the first time to discuss how the country develops a just transition from our current high emission economy to a low carbon climate resilient economy and society. To do this we must ensure those who are currently dependent on the coal value chain do not carry the transition burden.
Accordingly, the Commission will advise government on ways to unlock new technology, new investment and above all new jobs as we meet our commitments in terms of the Paris Agreement.
The first South African adaptation communication in line with the Paris Agreement outlines five adaptation goals, articulates efforts to be implemented and associated costs for a time period of 2021 to 2030. The adaptation communication will enable support for key sectors that are affected by the impacts of climate change, including human settlements, agriculture, water and energy. It will also affirm the leadership role which South Africa has played in the international climate regime on adaptation.
The updated draft NDC also contains a section on South Africa’s support requirements as a developing country. This includes the costs of both mitigation and adaptation measures and defining the country’s goal for accessing international support.
With regard to the support requirements for a developing country such as South Africa, the draft updated NDC addresses not only the cost of mitigation and adaptation measures but also outlines the international finance accessed thus far for climate change programmes. While South Africa has accessed about USD2 billion a year in 2018 and 2019, the draft updated NDC proposes access to four times the amount annually by 2030 to meet adaptation and mitigation needs.
South Africa’s updated NDC targets are aligned with planned policies and measures to provide opportunities for accessing large-scale international climate finance to fund low-carbon infrastructure, and also to fund the just transition.
The launch of the updated NDC is the start of a consultation process that will consist of a number of virtual consultations until the end of May 2021 with other government departments through the inter-governmental committee on climate change (IGCCC), broader stakeholders through the National Committee on Climate Change (NCCC) and a number of targeted virtual consultations with interest groups and representative formations including business, labor, civil society, the agricultural and energy sectors.
Direct consultation will be held with the provinces, while written inputs can be submitted to the Department by 30 April 2021.
Following the integration of inputs from stakeholders, the updated NDC will be tabled with Cabinet for approval before being deposited with the UNFCCC ahead of COP26.View more
Offshore wind: the new gold rush
A variety of factors are making the offshore wind industry a strong candidate for growth, but market dynamics are creating uncertainty. While traditional players are pursuing aggressive growth strategies, new entrants are reshaping the landscape.
The offshore wind industry is gaining momentum thanks to ambitious environmental targets, competitive costs, and huge market potential. This renewable source of energy provides an optimal load factor, minimising the need for electricity storage or complementary dispatchable sources of energy. The public sector has been rushing the field with new players, including oil and gas companies, creating a strong push for investments in the wake of the Covid-19 crisis.
Ambitious national targets
Since the 2015 United Nations Climate Change Conference, most governments have launched energy transition strategies and are adopting a variety of approaches to decarbonize.1 Historically, offshore wind development mostly took place in Europe in the North Sea, and China has set ambitious targets for offshore wind. But so far, the United States has been less ambitious. The European Union (EU) is aiming to install between 230 and 450 GW of capacity by 2050, and China announced 175 GW over the same horizon. Meanwhile, the United States is aiming for only about 85 GW. Although there is less visibility on China’s road map, offshore wind could help accelerate the end of coal power—improving air quality and ensuring energy security along the way.
The economics of offshore wind are improving as the costs come down and the energy source becomes more competitive with not only fossil fuels but also other renewable technologies, including solar photovoltaics (PV) and onshore wind.2 As wind turbines grow (up to 12 MW and already announced 15 MW), the load factor could reach new records— above 60 percent—making offshore wind technology even more cost-competitive in the future.
The International Energy Agency (IEA) predicts a sharp decline of offshore wind’s levelised cost of electricity (LCOE) until 2040, down from about €150 per MWh to €25 to €45 MWh depending on the geographic setting.3 This has enabled a key change with the emergence of subsidy-free bids (see figure 1).4
Huge energy potential
Despite significant growth over the past several years, mostly in Europe, offshore wind is still a very small share of world power production (68 GWh in 2018, or about 0.3 percent) and installed capacity (28 GW in 2018, or about 0.4 percent).5 Technical sources offer a power potential of more than 25,000 GW globally, with the United States having the largest offshore wind technical potential both for near-shore and far-from-shore zones (more than 10,000 GW).
Offshore wind capacity is expected to grow by about 25 GW per year over the next two decades, activating a limited share of technical potential.6 Furthermore, offshore wind is displaying strong resilience amid the Covid-19 pandemic with annual capex expected to equal offshore oil and gas capex both in Europe by 2021 and in the United States over the next decade. 7
Market dynamics are creating new tensions in the offshore wind industry
Attractive growth prospects are creating complexities and challenges in four areas:
Regional specificities with uneven strategies
The development of offshore wind is influenced by local market factors, and countries are adopting a variety of approaches to foster renewables growth:8
Energy security. This is a key incentive for the EU, but the United States is less concerned despite benefiting from the world’s largest source of offshore wind. The EU has defined a clear ambition with a strong commitment from countries and structured supporting policies, including the Green Deal, potentially boosted by the Next Generation EU recovery plan.
Wind turbine manufacturing capacity. This is well-established in the EU, with leading capacities already deployed in the North Sea. In the United States, offshore wind is still an emerging market, with only 30 MW of installed capacity in the first half of 2020. In the United States, despite strong fundamentals such as the technical potential and support mechanisms, full development of the offshore wind value chain is far from achieved and will require structured support. In China, offshore wind should benefit from a centralized administration, adequate infrastructures, potentially huge wind turbine manufacturing capacities, and logistics capabilities. This implies short contracting procedures, government support, and no public acceptance issues.
Power grid flexibility and regulation. These areas could provide additional complexity and embed various integration capacities, such as grid connection technologies, bidding processes and contracts, merit order, and support mechanisms for connection costs. Even if some countries have already reached their integration capacity, the European network is very well integrated, providing additional capacity for offshore wind integration. The US power grid is fragmented and has a limited capacity to deal with a large share of intermittent electricity. China’s power grid is integrated, which would favor the integration of wind power. Finally, large hydro-storage capacities provide the ideal combination with wind offshore.
Larger and more complex scope
This year marked a step-change in the size of wind farms, with the largest wind farm size doubled compared with past years (see figure 2). In addition, hybridisation with other technologies will be crucial for economic and environmental viability. Recent bids show a combination of offshore wind with green H2 (electrolysis). For example, in July, Shell and Eneco were awarded a tender to create a wind farm-powered green hydrogen hub.9
On the technology side, floating solutions can unlock additional upsides. They address the largest technical potential of offshore wind (72 percent of offshore wind’s technical potential is in deepwater) and higher load factors, driven by better wind conditions. In addition, floating solutions enjoy better acceptability and reduce usage conflicts with other sea activities, such as fishing, coastal navigation, and recreation. However, several challenges are yet to be addressed, including the high upfront cost and long project timeline, the infrastructure needed to assemble turbines, and full-scale testing and demonstration (coping with pitching and rolling, resisting harsher weather conditions, and handling cable complexity). The design of floating solutions is also still at an early stage of development.
Increasing competition and key players’ strategic moves
The offshore wind landscape is becoming more crowded with several new entrants along the value chain. While traditional players are pursuing aggressive growth to stay ahead of the game, solid new entrants are reshaping the offshore wind landscape.10 The net-zero boom hit the oil and gas majors in 2020, with Equinor followed shortly by most peers. To support their net-zero targets, oil and gas operators are walking the talk with several offshore wind initiatives launched over the past year (see figure 3).
On the project development side, traditional oilfield services and engineering, procurement, and construction (EPC) players are capitalizing on their offshore capabilities and diversifying into offshore wind (see figure 4). Traditionally, oil and gas EPC had been marginally involved in offshore wind projects as subcontractors for specific activities with limited scope, such as installing foundations for pilots or small wind farms. Now, they are repositioning in the value chain to deliver larger, more complex project scope—from subcontracting for large wind farms to taking on engineering, procurement, construction, and installation (EPCI) roles for a defined project scope. In the future, the role of EPC players may evolve to deliver turnkey projects for a full wind farm, with examples so far only seen in Asia.
Potential supply chain bottlenecks
Delivering the potential will most likely stretch the value chain, with bottlenecks for turbine production and logistics. The first question will be about whether original equipment manufacturers (OEMs) have the capacity to expand production to meet demand. Over the past several years, OEMs delivered an annual installed capacity of about 7 MW, but demand will grow to about 20 to 30 MW per year until 2030 (see figure 5). This gap could be even wider depending on OEMs’ financial situation. In parallel, high demand in marine logistics (offshore vessels) could create scarcity and tension on prices.
How to win the new gold rush
As discussed, offshore wind energy is a strong candidate for massive growth in some regions. However, an array of market dynamics are creating tensions that are impacting the value chain and creating potential bottlenecks that could impact the overall outcome of projects. Winning the new gold rush will require taking a systematic and collaborative approach.
Choose your battles
The first priority is to identify the sites that have the highest strategic value for your objectives, including growth targets, the portfolio, and the footprint. It will also have implications for local factors, such as grid connection technologies, bidding processes and contracts, merit order, support mechanism, and time to operations, as well as for regulations, such as the Urban Planning Code authorisation for building turbines of more than 12 MW.
Bidders will need to master the contracting process across countries and regions, including understating the prerequisites and differentiating elements to win the bid. The competition is getting tougher. For example, in the Dunkirk wind-farm award, the top five bidders all scored very closely in the tender criteria, with a slightly bigger difference in the bid price: €44 per MWh for the winning and between €47.5 and €51 per MWh for the others.11
Streamline the wind-farm delivery model
Delivering much larger and more complex wind farms requires moving away from the traditional master–servants project development approach with its many siloed interfaces. Collaborative design optimisation could significantly reduce costs and fast-track the time to market. Offshore could unlock significant value by taking advantage of lessons learned from other industries, such as automotive, aerospace and defense, and electronics. While the oil and gas industry has traditionally struggled to do so, offshore wind has the features needed to be successful, with strong standardisation potential and flexibility for lean design (lacking heavy legacy specifications).
A new delivery approach also requires new business models and new ways of working. Strategic alliances are a win–win for operators, OEMs, and EPC to tackle the following elements:
- Improve the project economics by working together to address large cost areas, taking on the full envelope of costs and seeking to bring it down as opposed to traditional sourcing requests for proposals (RFPs) that are focused on price and likely to increase with change orders.
- Reduce cycle time by accelerating execution and avoiding RFP and tender processes.
- Develop technological synergies with contractors by engaging them in advance to elaborate on designing an optimal solution.
In a capacity-constrained environment, strategic alliances also offer opportunities to secure material and services while giving suppliers certainty about revenues. Oil and gas players (operators and EPC) can also capitalise on their strong offshore experience.
Repurposing assets and reskilling the workforce requires a new cross-business portfolio view and management, such as multipurpose vessels serving oil and gas platforms and wind farms, and talent management, such as sharing resources across oil and gas and wind projects.
Achieve operational excellence
Operators will need to assess and extract the wind farm’s true potential. With more pressure to reduce costs and with subsidy-free bids becoming the new norm, operational excellence is paramount to maximising profitability.
Smart operations are a must to optimise both the top and bottom line by considering a broad set of parameters, such as revenues, cost of spare parts, market dynamics, regulations, turbine downtime, weather forecast, and operations and maintenance costs.
Advanced analytics could allow for precisely predicting the impact on costs and revenues to inform decision-making and optimise profitability.
Predictive maintenance enables striking the right balance between corrective and preventive costs, including the costs of failure, reducing total expenditures, and increasing availability and reliability.
Digital twins can extend the life of assets by combining operational and physical inputs, such as inspection information and mechanical characteristics, with advanced simulation, such as fatigue analysis, inspection plan, and predictive maintenance. In addition, using digital twins in the engineering phase could optimise design and reduce material and installation costs.
Squeeze financial value
Finally, operators will need an integrated approach to optimise their financial value.
Value pools. The boundaries between sourcing, trading, and production are blurring, driven by demand response, batteries, and decentralised generation. New value pools are emerging from all parts of the chain.
Contractual and physical flexibility to match supply and demand and balance the grid, such as capacity contracts, virtual storage, and options and derivatives, drives portfolio optimisation and provides growth opportunities.
The operating model needs to adapt to allow an integrated steering of power assets, such as renewable, storage, and combined cycle gas turbines, and consumption, such as internal and external, by location, minimum and maximum load, and steerable load.
Decision-making. With renewable energy growth, the power market is becoming more weather-driven, and demand for flexibility is moving toward the short term. Consequently, the speed and quality of decisions are paramount to ensure smooth alignment between power assets and consumers, such as scheduling and re-dispatching processes with assets and consumers to avoid imbalance costs and capture market opportunities as well as increased frequency balance to manage renewables generation unpredictability. To support quality and efficient decision-making, information system infrastructure and data management are crucial to achieve the following:
- Combine massive amounts of data in real-time.
- Develop robust data analytics for optimization (analytical models with accurate signals, confidence estimation, and visualisation).
- Define the trade-offs for result accuracy versus computation speed.
- Ensure seamless interactions between independent information systems and functionalities.
- Define the trade-offs between multiple performance models versus a full integrated model, such as individual turbines, wind farms, and country-level portfolios.
- Facilitate internal and external data exchanges.
Get set for the race
Think big and act fast
The economies of scale for large wind farms (more than 1 GW) is the new norm for cost-competitiveness. All players are moving.
To leapfrog the competition and not get left behind, it is imperative to quickly screen and target opportunities. Where to start will depend on players’ maturity. In any case, it is important to accelerate the learning curve. For new entrants, this may mean starting with smaller roles or a smaller scope and quickly transitioning to larger, more complex ones.
Choose your partners, and nurture the collaboration
Winners will play a team game with strategic alliances and collaboration across the value chain. This will ensure delivery capacity, such as turbine production, installation, and footprint as well as best-of-breed skills, such as technology and knowledge while accelerating innovation. A cultural fit and collaboration framework will be essential to success.
1 European Commission Climate Action Tracker
2 Intergovernmental Panel on Climate Change 2018 special report, International Energy Agency, International Renewable Energy Agency
3 International Energy Agency World Energy Outlook 2019
4 Aurora Energy Research, offshoreWIND.biz, European Commission electricity market reports, Kearney Energy Transition Institute
5 International Energy Agency World Energy Outlook 2019; “Wind energy,” International Renewable Energy Agency
6 International Renewable Energy Agency, Global Wind Energy Council, International Energy Agency
7 “Covid-19 monthly update: 2020’s oil demand recovery slows down, road fuels upgraded for 2021,” Rystad, 12 June 2020; “US offshore wind power spending has oil in its sights,” Financial Times, 7 July 2020
8 International Energy Agency
9 Shell media release, 29 July 2020
10 Company websites, press review
11 Commission de Regulation de l’Energie, Deliberation N. 2019-124
Courtesy of Kearney.comView more
What digitalisation acceleration means for sustainability
By Jaco du Plooy, product manager for Eaton Africa
Last year took a truth which people working in the technology sector were well aware of and threw it into sharp relief for society as a whole. While the global Covid-19 pandemic has caused a level of disruption to daily life, at a level not seen for a generation or more, it’s clear that that disruption could have been significantly more challenging were it not for the digitalised nature of much of daily life. Data has now moved beyond being the bedrock of industry and is now – like water and power – an embedded and indispensable factor for modern life.
Our networked era means that colleagues have continued to collaborate through cloud productivity tools, that vulnerable customers have continued to shop through online grocery services, that vital medical information has continued to be shared with those who need it, and that friends and family have continued to see one another’s faces even under the strictest of lockdowns.
Many businesses – and especially those involved in professional services – have reaped the benefits of digitalisation by continuing to operate virtually as though their offices are still open. This is not to say, however, that every business was well prepared for this unforeseen event. Many had to rapidly bring forward plans that were on the horizon, moving services to the cloud and creating ways for staff to access vital data, and achieving virtually overnight what was road-mapped for the coming years.
In a global survey by law firm Baker McKenzie, 78% of Technology, Media & Telecoms businesses, along with 74% of Financial Institutions and 65% of Consumer Goods & Retail businesses, accelerated their digital transformation plans as a result of Covid-19. As Microsoft CEO Satya Nadella put it in April, we saw ‘two years’ worth of digital transformation in two months.
The confluence of trends around data and power
While this pace of change is worth remarking on in itself, it’s possible that we haven’t yet begun to truly reckon with the consequences of this digitalisation acceleration. While it might seem grandiose to say, it seems likely that digitalisation is just one of an interconnected set of trends that will truly change how our world operates – and the pandemic has brought the timeline for that change markedly forward.
To understand why, we need to consider the fact that, as well as replacing or reworking existing systems with data centre-based technology, digitalisation is always also a transfer of energy from one system to another. The rise in home working is a perfect example of this: while the energy demands of cloud computing likely rose as a result of home working, and those powering videoconferencing services certainly did, this replaced commuting, which was to a large extent directly powered by burning oil.
Likewise, online grocery shopping enables more efficient delivery routes rather than many individual trips, on-demand retail eliminates the energy expenditure of over-production and warehousing, and online banking reduces the need to power and maintain financial real estate.
Digitalisation of systems, then, is also an electrification of systems. A stable supply of electricity is critical for digitalisation to flourish in South Africa. With the population estimated to continue growing until 2082, and reaching just over 80-million people, this will result in a steep increase in electricity demand.
While this may, on the face of it, sound like bad news for our climate goals, the truth is that shifting demand towards electrified systems will stimulate the need for adopting renewable energy, which is now generally cheaper per watt than fossil fuel alternatives. As well as being inherently more power efficient, thanks to the hyper-efficient nature of modern silicon, digitalisation opens avenues for carbon reduction as its emissions are directly related to the emissions of the grid as a whole.
From digitalisation, to electrification, to renewable energy: this cycle closes back on itself in the fact that renewable energy requires digitalised systems for its effective generation, transmission, storage, and usage. While wind and solar are now highly efficient and economical ways of generating electricity, they are by their nature less predictable and consistent than fossil fuel-based generation.
Digital systems will be required to rapidly react to fluctuations in production, and the power held in those systems will also play a role in managing the grid’s performance. Already, stores of power like data centre backup systems and electric vehicle batteries are being used to help support the grid’s frequency and performance.
As digitalisation, electrification, and renewable adoption accelerate, these interconnections will become deeper and more dynamic: this confluence of trends is a virtuous cycle that speeds itself up.
Digitalisation and sustainability at once
As this cycle continues, I would predict that we will see the distinction between these trends start to fade away. In its earliest days, when digitalising a system meant building on-premise data centre infrastructure, decisions around digitalisation were taken largely independently of power considerations.
Over time, data centre applications became mission-critical, such that those decisions became dependent on the quality, availability, and reliability of power to ensure continued operation. Today, data and power have become co-dependent considerations: governments make policy decisions around power with data centre rollouts in mind, and data centre operators in turn plan construction in accordance with grid capacity.
Tracing that shift into the future, we may see digitalisation and sustainability become, in many regards, synonymous terms. The share of overall power needs going into data centres and networking is growing rapidly, and this will drive and support the acceleration of renewable adoption. Far from being competing concerns, the cloud will be the route to decarbonisation, and vice versa.
At the beginning of 2020, much of the digital transformation that occurred existed only in the form of medium-to-long term planning – an ideal business goal that was still subject to capacity and favourable conditions. The pandemic brought all that forward and made it an immediate necessity in ways that nobody could have predicted.
Today, electrification and renewable adoption similarly exist on a planning horizon, subject to checks and milestones as they are patiently brought into reality. Over the coming years, we will see how the ripple effect of accelerated digitalisation cascades through all our essential systems, leaving us with a very different, much greener approach to the world.View more
SAPVIA | Mantashe announcement on IPP bidders
Solar PV industry body SAPVIA (the SA Photovoltaic Industry Association) has applauded the step-change towards reviving generation capacity procurement from the Department of Mineral Resources and Energy and supports the commitment to deliver a secure energy supply from a diverse range of energy sources as set out in the country’s energy plan.
“We are delighted to see solar PV represented in the RMIPPP preferred bidders announcement and congratulate those members who have worked tirelessly to a successful end. With technological advancement, the reduced costs, the scalability and rapid build times of solar PV projects, solar PV should remain a key technology choice in meeting the country’s capacity requirements,” said Niveshen Govender, SAPVIA COO.
“The emergency procurement round showed that crises can spur innovation and action. While there is still room to better research and understand some of the technology choices of RMIPPPP, we welcome the Minister’s immediate follow-up confirmation of the release of the Renewable Energy IPP Procurement Programme Bid Window 5.
“New possibilities will be realised with both PV and PV-hybrid projects playing a role in South Africa’s energy mix. With the commitment to procure 2000 megawatts from PV solar across Bid Window 5 and 6 this year, there is much to look forward to.”
SAPVIA welcomes and strongly supports the changes announced to the Economic Development requirements of Bid Window 5, which will ensure the participation of black women in the ownership of future projects and procurement rounds as well as a more concerted focus on skills development in the energy sector.
“Over the past decade, SAPVIA has taken the lead in driving skills development across the solar PV value chain. Our focus has been on enhancing the skills of our members to create a world-leading sector that delivers socio-economic transformation and upliftment across South Africa.
“Recently, through our Developing Developers program, in partnership with SAWEA, we are working with current and potential developers to give them access to the knowledge and skills needed to take a renewable energy project from initial planning through to commissioning. This grassroots capacity development is well aligned with the department’s move to increase requirements for black women participation.”
“Local manufacturing and content must continue to be prioritised in all future procurement rounds and SAPVIA will work with members to develop local PV value chains so that our members are ready to meet the new requirements of local content in the forthcoming Requests for Proposals.”
The embedded and distributed generation sector is increasingly important both in diversifying our energy mix and contributing to energy security. SAPVIA is encouraged by the DMRE’s moves to enable increased embedded generation and is therefore seeking clarity on the statement on increasing the distributed generation licence exemption cap, and we will continue to engage with our counterparts in government to clarify the details and legislation required for self-generation as well as the licensing and registration regime for embedded generation.View more