Standard Bank welcomes president’s call for private sector energy generation
Innovative platform enables any enterprise to sell energy
The South African president’s recent removal of the licensing threshold on embedded private generation, the announcement of feed-in electricity tariffs for the outright purchase of privately generated electricity, tax incentives for the construction of commercial generation installations, and a virtual – albeit temporary – scrapping of private power generation application red tape, marks a watershed in South Africa’s 14-year struggle against the socially and economically crippling onslaught of loadshedding and persistent energy insecurity.
While the country breathes a collective sigh of relief that a comprehensive and broadly inclusive plan is finally on the table, “the effectiveness of these bold initiatives depends on how quickly they can be implemented, and how successfully the expertise available in South Africa’s private sector can mobilise and gear capital in the development of an environmentally and financially sustainable public-private energy future,” says Berrie de Jager, Head of Natural Resources at Standard Bank’s Business and Commercial Clients division.
Kick-starting stalled construction on bid window five independent power producer projects by addressing impractical local procurement requirements, doubling the size of bid window six projects from 2 600MW to 5 200MW, issuing requests for proposals for battery storage, as well as the review and speeding up of Integrated Resource Plan allocations, are significant developments that the country’s existing energy sector should leverage – and take to scale – with alacrity. “The funding mechanisms and capital structures enabling these projects have long been in place. They are proven and are working well in the formal, relatively restricted, public-private renewable generation sector,” observes de Jager.
What is most exciting about the president’s recent announcement, however, is the new opportunity that these pronouncements present in the decentralised energy generation space, that is “the niche and entirely untapped energy market that sits behind the Eskom or municipal meter,” says de Jager.
Making this space available for general investment for the first time means that almost any business in any sector can now potentially generate – and sell – any amount of energy to the grid. In short, once the required regulatory adjustments are made, energy production, sale and trading will no longer be the preserve of the state and its exclusive and very limited circle of approved energy partners.
Instead, if South Africa urgently implements the reforms promised on Monday night, “investment in the country’s energy market will expand exponentially, allowing all manner of innovative combinations of energy generation, sale and supply,” predicts de Jager. From malls to mines, hotels to hospitals, and farms to factories – every business or even small enterprise might soon be participating in the generation and sale of electricity.
While Eskom will retain control through a soon-to-be spun off transmission entity regulating and controlling the trading and transmission of energy across the grid, “the key challenge for South African businesses wishing to participate in the country’s new energy market is managing the financing, construction delays and cost overruns that typically plague private generation projects,” reports de Jager. Poor quality energy generation technology investments are another common pitfall preventing businesses with no knowledge of energy generation from reaching cash-neutrality as quickly as possible.
To help businesses manage the operational and reputational challenges associated with independent energy generation, Standard Bank has developed a digital platform to support clients in procuring high quality and financially sound Solar Photo Voltaic solutions.
Even before the president’s recent announcement, “we designed PowerPulse as a digital platform to empower ordinary businesses to produce, deliver, consume and trade energy,” says de Jager. Whether you are a financial executive looking to manage energy costs, feel overwhelmed by the jargon and complexity of technical solutions, or are simply unsure of which providers to use, PowerPulse provides the answer. “PowerPulse even assists with financial modelling, delivering a report which can be used to justify renewable energy investments to boards or investors,” adds de Jager.
In Standard Bank’s experience, a key need for any business thinking of building an independent energy generating and trading capability includes accessing and shortlisting accredited engineering, procurement and construction partners. Introductions to specialist concierge teams to guide the process is also critical for businesses whose core capability is not energy. As such, PowerPulse is also linked to solar photo voltaic and other technical knowledge bases across the energy value chain, “connecting client enterprises with the specialist energy experts, advice and resources that they may require,” reports de Jager.
Supported by this kind of energy procurement and build capability ecosystem, “any businesses can confidently add an energy income stream to their existing operations or infrastructure,” says de Jager.
Moreover, knowing that clients are being guided by PowerPulse provides Standard Bank with the confidence to provide funding support to as many clients as possible, “heeding the president’s call to contribute to South Africa’s future energy security in a profitable and sustainable manner,” concludes de Jager.View more
Globally, inflation remains elevated
Inflation rates continued to reach new highs around the globe. The march higher in crude oil prices due to the escalation of the economic fallout between the West and Russia is still the main catalyst.
This is in addition to rising food prices, also linked to the war in Ukraine, and stubborn supply bottlenecks and constraints worsened by recent Covid-related hard lockdowns in China. More concerning is the fact that inflation keeps surprising expectations on the upside, especially in advanced markets that have managed to successfully maintain price stability for decades.
Tightening the money screws
Actual policy action and expectations of a more aggressive monetary policy response are contributing to rising recession fears, especially in advanced economies. Central banks have become increasingly hawkish in response to inflationary developments, which, in turn, feed concerns that indecisive policy action risks the credibility of inflation targets and their potential negative impact on inflation expectations. The belated central bank hawkishness seems to increasingly supersede sensitivity to the impact of higher rates on economic activity. In the US, the minutes of the Federal Reserve’s most recent Monetary Policy Committee meeting revealed that it agreed that the current inflation rate and risks to inflation support a faster tightening pace. Elsewhere, one of the policy laggards, the European Central Bank (ECB), is finally preparing the market for the start of its policy tightening process as it aims to reach positive rates by the end of this year. Like most other economies, the main driving force behind the ECB’s change of tack has been persistent rising inflation in the Euro area, which continues to exceed expectations.
Figure 1: Central bank policy rates: 12-month change
Source: Bloomberg, Futuregrowth
South Africa is being dragged along
Being a small open economy and a net importer of oil, South Africa is not escaping the global turmoil unharmed. On the inflation front, the country’s Headline Consumer Prices Index (CPI) accelerated by 6.5% year-on-year in May and breached the top end of 3% to 6% inflation target band of the South African Reserve Bank (SARB) in the process. Unsurprisingly, a marked jump of 7.8% year-on-year in food inflation turned out to be the primary driver of this sharp acceleration. In contrast, Core CPI rose by a more subdued 4.1% in May, from 3.8% the previous month. More concerning, and closely aligned with global developments, is the continued sharp acceleration of prices at the producer level, with some risk of spill over to the consumer side. In May, the Producer Price Index (PPI) for final manufactured goods accelerated from 13.1% in April to 14.7%. This was broad based, with prices in seven out of nine categories rising. While it still appears that price pressures at both producer and consumer levels are mainly supply (and not demand) driven, the SARB wisely opted to stay the course with its tighter monetary policy. Following the 50 basis points (bps) increase in the repo rate to 4.75% at the May Monetary Policy Committee Meeting, for a total increase of 1.25% so far in this cycle, the central bank has clearly evidenced its commitment to containing second round effects before they become entrenched.
Figure 2: South African inflation heading higher in the short term
Source: OMIG, Futuregrowth
SA fiscal performance is promising
The May public sector main budget balance recorded a deficit of R17.1 billion; significantly smaller than the deficit of the first month of the 2022/23 fiscal year. It also represents an improvement over the 12-month period. Moreover, provisional financing data issued by National Treasury points to a main budget surplus in June 2022, which may be significantly larger than the surplus recorded for June 2021. Notably, tax revenue receipts continued their strong growth momentum, with both VAT and personal income tax showing promising performance despite a challenging macro-economic backdrop. The strong tax revenue collection performance outweighed a decrease in fuel levy receipts, a direct result of the temporary reduction in the fuel levy to ease the burden of sharply rising petrol and diesel prices. Similarly, the June 2022 provisional financing data suggests strong corporate tax receipts. On the negative side, the two-month extension of the temporary fuel levy reduction will result in foregone tax revenue of R4.5 billion, which is not an insignificant amount. Of course, it is still early days, especially considering the risk to local economic activity from global growth headwinds together with local developments such as intensified Eskom load shedding. On a positive note, high commodity prices (especially coal prices) continue to bode well for corporate tax receipts.
Merchandise trade surplus is still sizeable
While the country’s merchandise trade surplus initially narrowed sharply from R47.2 billion in March 2022 to R16.0 billion in April, it regained some lost ground with a R28.3 billion surplus recorded in May. During the period under review, substantial swings in the exchange rate of the rand and commodity prices impacted the country’s terms of trade. On the negative side, disruptions to road, rail and port handling operations at the Durban port (due to the Kwa-Zulu Natal flooding) and intensified electricity load shedding hampered export traffic flow. With crude oil prices kept hostage at elevated levels, the industrial metal complex was negatively impacted by concerns about global economic activity in general, and lower manufacturing activity in China as a result of earlier COVID-related lockdowns.
Figure 3: SA current account: large merchandise trade surplus, but terms of trade are turning for the worse
Source: Bloomberg, Futuregrowth
SA nominal bonds lost ground
During the second quarter, the FTSE JSE All Bond Index (ALBI) returned -3.71%. Bonds in the 12+ year maturity band rendered the worst return as yields of the longest-dated bonds rose in excess of 100 basis points over the period. The sell-off was the combined result of the global economic fallout from the eastern Europe conflict, the feed into persistent rising inflation, tighter monetary conditions, global recession fears and local developments such as intensified load shedding, which added to an already clouded growth outlook. This fed risk aversion, which was followed by significant sales of local bonds by foreign investors. In contrast, rising inflation concern and a higher inflation accrual lend support to the inflation-linked bond market. Consequently, the FTSE JSE Government Inflation-linked Bond Index (IGOV) rendered a relatively strong return of 2.95%, outperforming nominal bonds by a significant margin. Cash rendered a return of 1.07% over this period.
Figure 4: Bond market index returns (periods ending 30 June 2022)
Source: IRESS, Futuregrowth
Stagflation fears are rising, fed by sustained upward pressure on inflation, the influence of COVID-related lockdowns in China, the economic fall-out from the ongoing conflict in Ukraine, and concern about the impact of tightening monetary and fiscal policy on growth prospects. Broader macroeconomic developments, specifically rising concerns about the reversal of the gains from globalisation, are more fundamental in nature. While global bond yields remained at elevated levels, locally, the nominal bond market weakened sharply during the quarter, underperforming both inflation-linked bonds and cash. Rising inflation angst and an attractive inflation carry boosted inflation-linked bond performance significantly.
KEY ECONOMIC INDICATORS AND FORECASTS (ANNUAL AVERAGES)
|SA Headline CPI||4.6%||4.1%||3.3%||4.5%||6.4%||4.7%|
|SA Current Account (% of GDP)||-3.0%||-2.6%||2.0%||3.7%||2.2%||1.2%|
Source: Old Mutual Investment GroupView more
What it will take for South Africa’s ailing power utility to keep going
By David Richard Walwyn Professor of Technology Management, University of Pretoria. Image courtesy: https://www.abelectricians.com.au/
The chief operating officer of South Africa’s electricity utility, Eskom, warned in May that the government should urgently start building new generating capacity. He was referring to a new build programme which has existed for at least a decade.
The country’s Integrated Resource Plan of 2019, a cabinet approved document, sets out the timelines for decommissioning coal-fired power stations and adding 44GW of new capacity, including 18GW of wind energy and 8GW of solar (photovoltaic).
The country is already way behind on this programme, limping along with antique power stations and regular power cuts. Outages are a regular occurrence which are estimated to cost the country’s economy about US$1 million an hour.
South Africans are all too aware that there is an energy crisis. But in my work on energy systems and transitions, I began to ask questions about the real nature and extent of it, and how Eskom should be responding. My views are informed by Eskom’s data portal, a rich source for insights on South Africa’s complex electricity system. The portal is designed to share detailed information on electricity demand and supply. It has data on sources of energy, levels of storage and the extent of loadshedding (power cuts) on an hourly basis.
I analysed the data for demand and supply for the first half of May 2022. It revealed three main trends: demand has fallen; power cuts aren’t as big as they could be; and there’s scope to get more out of the system using renewable energy sources.
South African power supply and demand trends
The data reveals three key trends for the utility. Firstly, Eskom has dropped 6GW (about 21%) of demand within a year. This is because many non-paying customers have been disconnected and several large clients, among them industrial users like mines, are now generating their own power.
The figure below compares two days of demand, one from June 2021 and the other from May 2022. It reflects actual demand, not Eskom’s supply. The difference in demand is staggering. At this rate, South Africa simply won’t need Eskom in five years.
The second interesting finding is that the quantity of the power cuts is small relative to the total delivered energy. Over the week 12-19 May 2022, Eskom delivered 4,271 MWh of electricity and cut 70 MWh, which is only about 1.6% of the energy generated, as shown in the image below.
I’m making this point to show that power cuts could get much worse, unless the rebuild programme begins soon. One reason that the power cuts attract high media attention is that consumers bear a disproportionate share of the energy cuts relative to Eskom’s anchor customers.
For instance, under level 4 where power cuts can last for over five hours in a day, lower end users have power for only 67% of the day – meaning 33% of their power supply is cut. But the total energy saving across the whole system is 10%. This suggests that Eskom deliberately preserves supply for its anchor customers – large industrial users and essential services – even during the power cuts.
The final issue is that Eskom could get more capacity from its pumped hydro schemes. These schemes use excess power at night to pump water to high storage dams, from which the water is released during the day to meet the higher demand during daylight hours. During the week 12-19 May, capacity utilisation of pumped hydro was only about 38%.
If there had been sufficient power during the day to refill the reservoirs, Eskom could have added 1.7 GW of generation capacity during the early evenings, making full use of the pumped hydro capacity and avoiding the need for loadshedding. That daytime power could have come from the renewable energy programme, if the Department of Mineral Resources and Energy had followed the build schedule.
What are the options for Eskom, apart from starting the build programme?
To answer this question, we need some basics on energy systems. South Africa has a diverse energy system. Electricity is obtained from coal (the largest source), wind, solar, hydro-electric, nuclear, diesel and imports.
Wind, solar and nuclear can’t be controlled by the operator. Gas, hydro-electric, pumped hydro and diesel can. Coal is somewhere in between the two. Eskom’s role as the system operator is to blend all the sources to match the demand.
The difficulty is that both demand and supply are variable, as shown for solar in the image above. It is akin to managing a catering event when you have no idea how many guests will be there or how many meals will be delivered.
So, Eskom follows some simple rules (like other energy system operators). The rules are first to use sources it cannot control (wind, solar and nuclear), then add the coal power stations, and then top up with hydro-electricity and pumped hydro. And if there is still a shortfall, bring in the gas and diesel turbines.
The most obvious solution to Eskom’s immediate problem is two-fold:
- bring in more renewable energy, especially wind and solar, of the independent power producers procurement programme
- make more use of pumped hydro by using any sources of additional low-cost power, available from independent power producers and elsewhere.
This approach has already been outlined in my previous publication covering the independent power producers procurement programme. I criticised the programme’s requirement of stand-alone power producers and argued that interconnectedness of the producers would reduce cost and increase resilience in the system. It is precisely this arrangement which will provide a solution to the short-term issues within the national grid.
In the longer term, the country needs to properly implement the 2019 Integrated Resource Plan, even if it clashes with the Department of Mineral Resources and Energy’s coal, gas and oil interests. If the country doesn’t start the 2019 plan now, it will lead to the demise of Eskom as an energy producer as users are compelled to turn to other sources.
Article courtesy of The Conversation.View more
Major step in South Africa’s climate response
The Presidential Climate Commission (PCC) welcomes the acceptance of the Just Transition Framework by President Cyril Ramaphosa on behalf of government. This is a major step in the country’s climate response and in achieving a just transition in South Africa.
The PCC was established in December 2020 as an advisory body on South Africa’s journey to a net-zero economy and climate resilient society. The PCC unanimously adopted the Just Transition Framework at its Sixth Meeting held on the 27th of May 2022 following months of research and intense consultations with various social partners and communities across the country. The framework sets out the policy measures and undertakings by different social partners to minimise the social and economic impacts of the climate transition, and to improve the livelihoods of those must vulnerable to climate change.
The President is both Head of State and Chairperson of the Commission, giving unparalleled attention to the climate challenge at the highest level of government. In a meeting today between PCC Commissioners and the President, the President undertook to champion the framework within government, informed by the aspirations of workers, social partners, and our communities.
“Addressing climate change requires significant and unprecedented transformations across all sectors of the economy, with opportunities and challenges. Workers, communities, and poor people, whose lives and livelihoods are tied to high-emitting industries, may be particularly affected. It is for that reason that the PCC developed the recommendations for the just transition in a manner that supports and empowers impacted groups”- said Valli Moosa, Deputy Chairperson of the Commission.
While there are clear areas of consensus on achieving a just transition, there has not yet been a single policy framework that sets out the vision, principles and interventions that will give effect to this transition, as agreed to by all social partners.
The Framework outlines a set of recommendations on “A Just Transition Framework for South Africa,” that are aimed at bringing coherence to just transition planning in the country, with shared vision for the just transition, principles to guide the transition, and policies and governance arrangements to give effect to the transition.
The PCC further recommends that “A Just Transition Framework for South Africa” is located within the central planning system of government, specifically in the national development plan, the medium-term strategic framework, annual performance plans, and annual budgeting processes, with each government department required to define their roles in relation to these objectives and the implementation of the framework.
“While the framework is not an implementation plan, it presents an organising frame for us to coordinate our efforts around the just transition. It is a foundation for more work to follow, underpinned by significant mobilisation towards social inclusion and help reach our climate goals, with a high degree of trust between all parties and a requisite policy intervention led by government, driven by industry and entrenched in our communities” said Moosa.
Remarks by President Cyril Ramaphosa
Allow me to begin by congratulating the Presidential Climate Commission on its production of this important work that will guide our transition to a low-carbon, inclusive, climate resilient economy and society.
In doing so, we are meeting our international obligations as part of the global climate change effort, and also securing our country’s future. The Presidential Climate Commission was created in 2020 to engage with stakeholders to develop a framework for a transition that takes into account the principles of justice and equity.
We have been consistent that we are developing country that must be allowed its developmental space, and that no-one should be left behind.
As this Just Transition framework underscores, combating climate change is not only an environmental imperative, but an economic one as well.
This Framework is an evidence-based document and a victory for evidence-based policymaking.
It draws on a sizeable body of local and international research on the policies and practices related to the transition to a low carbon economy.
It lays out the pathway towards a sustainable, cleaner and more inclusive economy that we envisage for our country.
Though robust, it is still an organising framework, and will need a detailed implementation plan and action schedule.
Its strength is its broadly consultative nature. It incorporates a wide range of stakeholder views including those of government departments, business, small business, civil society, traditional leadership, epistemic communities, workers, and communities. This consultative process has ensured that broader society has made input on the document.
The consensus achieved around its production means we will be able to take the transition forward in sync with all these stakeholders. This is especially insofar as it impacts sectors such as mining, automotive, tourism and agriculture.
It is encouraging that the Framework encompasses the principle of social justice and promotes equitable access to environmental resources.
The Framework is also premised on the ethos of inclusion, public participation and the integrated approach to governance.
It also includes and complements international best practice.
Going forward, this Framework calls for the whole of government to adopt a comprehensive plan, accompanied by a set of activities to achieve a low-carbon economy and society.
I would like to highlight in broad strokes some of the expectations and challenges as we go forward.
Among the most important recommendations is that government should ensure that the Just Transition must find expression in various plans such as the Medium-Term Strategic Framework, Annual Performance Plans as well as in the budget processes of every department.
It sets out the skills development, economic diversification, social support, governance and finance mechanisms required to make low carbon economy a reality.
It advocates for a massive expansion of renewable energy, battery storage, new energy vehicles, green minerals and the hydrogen economy.
It calls for the creation of long term decent work that mitigates losses from the decline in fossil fuel usage. Green as the common expression goes, is the new gold.
In education, one of the immediate implications is re-skilling and upskilling the workforce, so that they are able to adapt to new technologies.
The challenge we face is to overhaul the education system from basic education level, so that learners are thoroughly prepared for green jobs as part of the new economy.
Also important is the need to provide comprehensive social security safety for displaced workers and communities.
We envisage that this support will include mechanisms that promote entrepreneurship and self-employment where possible, complemented by social protection funds.
There will be need for significant capital mobilisation from both public and private sources. Now that we have this Framework we will be able to proceed apace with harnessing the benefits of the Just Energy Transition Partnership we concluded with the governments of the US, United Kingdom, Germany, France and the EU last year.
The publication of this Framework must now serve as a call to action to each of us to embrace the opportunities presented by a low-carbon, inclusive, climate resilient economy and society.
As the Nobel Prize laureate Wangari Maathai exhorts us:
“We owe it to ourselves and to the next generation to conserve the environment so that we can bequeath our children a sustainable world that benefits all.”
This Framework is the culmination of efforts from government, business, civil society, labour, academia and other stakeholders. It gives true meaning to social compacting, and you have delivered on your mandate.
Once again, congratulations to all social partners on this effort. You have done our country proud.
Let us now look to the next phase, namely a detailed action plan, and from this, implementation.
Southern Africa marked as major green exporter on roadmap for Hydrogen
In March this year, the South African Department of Science and Innovation (DSI) published a Hydrogen Society Roadmap for South Africa (HSRM) outlining a national hydrogen strategy to realise domestic energy security needs, while also positioning the country to export green hydrogen and ammonia to Europe and Asia.
According to Jackwell Feris, Director at commercial law firm Cliffe Dekker Hofmeyr (CDH), the development of the hydrogen economy in Africa will support effective broad global decarbonisation, allowing countries to meet their climate goals and create sustainable economic growth for African countries and the rest of the world. “There are enormous opportunities for Africa to be a key player in the clean hydrogen value chain,” says Feris. “In fact, several regions have the potential to develop into major global export hubs for hydrogen and other areas with the potential to provide domestic demand for end-use applications of hydrogen.”
From a Southern African perspective, he says this region has favourable solar conditions for the production of green hydrogen, with countries like Namibia and South Africa being ideally situated to become export hubs for green hydrogen.
“This is why it is critical that South Africa and Namibia push to become one of the first movers in this market,” says Feris. “There are already a number of international jurisdictions like South America and Australia who are already in a good position to do the same.”
Feris says South Africa needs to expedite the process in order to secure the demand, which begins with securing policy and regulatory frameworks that are attractive to investors but also balance the current and future needs of the country.
Feris points to Spain as a perfect example of why policies and regulations are so important. In 2006, the Spanish government implemented a programme called “The sun can be yours” in which it encouraged small-time investors to buy into solar farms throughout Spain. While this was successful for some time, the policy was not robust enough and the Spanish government ended up reducing its subsidies, which become a red flag for investors who in turn made claims against the government.
“We cannot develop this new market into new economic territory without due consideration for the economic needs and restrictions of our national goals and priorities. The system needs to be sustainable from the word go.”
Hydrogen is going to affect the entire global economy. From the different forms of hydrogen, they all need to shift to a greener form of energy – which is hydrogen.
The competitive advantage of Namibia is that there is more land and fewer people, so the natural move would be to become an export market.
Looking at what the global commitments are in terms of the 2021 United Nations climate change conference, COP26, is that there will be a bigger push for hydrogen, and Africa most definitely has a role to play in this. If Africa collaborates to create this industry across jurisdictions for African growth, we can attract investment while decarbonising the global economy.
Is it realistic for South Africa to do this? Director at CDH Margo-Ann Werner says in terms of exporting hydrogen, this would have to be a collective effort by the government and private sector, and Sasol has already taken the lead on hydrogen creation. If we want investors to invigorate growth in this market, it all hinges on creating an enabling policy framework. In a South African context, we do have a few gears that will enable a hydrogen economy.
The country is already the world’s largest producer of Platinum Group Metals (PGM), which are one of the main ingredients in the production of green hydrogen, and is also well endowed with available land and renewable resources to provide the energy sources for green hydrogen production.
Existing local infrastructure will allow for the production of blue, grey, black, and brown hydrogen, with the possibility of pink hydrogen arising. This puts South Africa in a unique position to gain a competitive advantage in harnessing hydrogen to create a whole new electricity market, which South Africa desperately needs.
“We are seeing drives in government that are specifically focussed to push the infrastructure drive and securing the resources needed to facilitate security of supply, and conservation of water”, concludes Werner. “It’s not going to be an easy road. It is going to be complex and dynamic with a lot of moving parts across private and public sectors. We still need more clarity, more security, and more commitment, but it will be worth it”.View more
Global water scarcity is code red for humanity, the answer is private finance
Half the world is now facing droughts, floods and filthy water – and the problem urgently requires huge amounts of private finance, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The warning from deVere Group’s Nigel Green comes as Italy declares a state of emergency amid the worst drought in 70 years. Elsewhere, Lake Mead, the largest reservoir in the United States, which provides water for tens of millions of people and countless acres of farmland in the southwest, is now just one-quarter full. Meanwhile, once again Sydney is flooded as the impact of the climate crisis becomes the new normal for Australia’s most populous state.
Nigel Green says: “There’s no doubt that all around the world the fallout of the growing climate crisis is accelerating.
“The UN’s Intergovernmental Panel on Climate Change has warned in a report that more than half the world’s population faces water scarcity for at least one month every year, others will be hit by regular severe floods, previously only seen once-in-a-generation, while others have access to only dirty water.
“This is now being played out in real-time every time you look at the news.”
He continues: “A failure to get a grip on this emergency is going to produce catastrophic, irreversible consequences later.
“The response will require political and social determination on a global scale.
“But, critically, it will also require tens of trillions of dollars. As governments alone cannot afford this now, especially with slowing economic growth amongst other headwinds, the solutions demand private financing.”
As such, notes the deVere Group CEO, the financial sector needs now needs to become more proactive to “unleash and mobilise” the funds required.
He is calling for never-before-seen levels of cooperation between financial advisories, insurance firms, banks, wealth and asset managers, investment companies, fintech groups, banks, and auditors in the fight against climate change.
“Governments around the world have proven themselves to be slow – at best – at responding to the urgent ‘code red’ situation we’re facing.
“Therefore, the financial industry must step-up. If we don’t, the level of funding will not be available, nor at the pace necessary, to mitigate human-created global warming.”
Nigel Green concludes: “Climate change is the greatest risk multiplier to our planet, to our communities, and to our way of life.
“It will take huge amounts of private financing to halt its impact.
“The onus now falls on the financial sector to help mobilise and unlock the necessary funds through education and robust, impactful investment solutions.”View more
Woolworths leading the EV charge but those batteries need a plan
Rather than becoming an environmental risk, managing used EV batteries properly presents a huge opportunity to catapult South Africa into the forefront of the circular economy.
Lance Dickerson, MD at Revov
There comes a time in every EV’s life where the weight of the battery no longer justifies the output. In other words, after many charge and discharge cycles, the battery’s output for mobility is overshadowed by its weight and it must be replaced. No big deal, one may think, just get a new one. The only problem is that there is currently no approved recycling process for lithium EV batteries.
This is not a South African phenomenon. It’s a global problem. There’s little joy in switching to e-mobility and reducing carbon emissions on our roads, only to sit with thousands of lithium batteries that have nowhere to go except landfills, which defeats the purpose of protecting our environment.
Retailer Woolworths recently announced that it would be rolling out a fleet of electric panel vans in partnership with logistics company DSV in Gauteng, Durban and Cape Town. If we look at the Woolworths example, just like every other company investing in e-mobility, there’s a golden opportunity to lead the continent and be at the forefront globally of closing the circular economy loop.
Woolworths’ head of online and mobile was quoted during the announcement as saying: “We will work closely with DSV and Everlectric to plan, position and negotiate the installation of these charging stations to leverage off existing renewable or solar installations co-located at the selected malls or retail locations.”
This is a brilliant move by Woolworths, because no one wants to use coal to charge electric vehicles. But not many citizens appreciate that renewable and solar installations also need batteries. Solar or wind produces power when the natural resource is available, such as during the day and when there’s wind. If the installation does not have batteries to store power being produced, it would not be able to supply power when there’s no sun, such as at night or during prolonged rain, or wind.
The best batteries for renewable energy installations are lithium batteries, which outperform and are safer than lead acid batteries. This is where the opportunity lies. The batteries that are removed from EVs at the end of their mobility life still have individual cells that can be repurposed into second life (2nd LiFe) storage batteries where weight no longer matters. These 2nd LiFe batteries have a lifespan similar to first life batteries but are superior to the first life batteries because their cells were designed for EVs, meaning they have a higher tolerance for heat and harsh operating conditions.
This is not theoretical. We are in the trenches every day and can say with confidence that these batteries can solve many, if not most, of South Africa’s energy security woes.
And so, a company such as Woolworths or DSV, and OEMs such as Audi South Africa, whose electric prowess was made evident at the last Dakar Rally, are sitting on the potential to meaningfully contribute not only to e-mobility, but also have the raw materials in their vehicles that can power renewable energy in this country.
We are approached frequently by companies working on tenders to bring in fleets of electric vehicles, or to be licensed to produce electric vehicles. The reason they contact us is because one of the requirements is to demonstrate a proven and acceptable strategy of discarding the EV batteries, and repurposing them into high-grade 2nd LiFe storage batteries is about as good as it gets if the company’s mission and purpose is legitimate carbon emission reduction and saving the environment.
It’s not just EVs with four wheels
One must ask large retailers such as Checkers with their Checkers Sixty60 service, and Takealot and Mr D, with their thousands of delivery people, why they have fleets made up of low-output internal combustion motorcycles? Sure, they’re only 125cc engines, but they are contributing to unsustainable levels of pollution by their sheer numbers. Stop one evening, and listen to the roads in the suburbs around you and count the number of small capacity motorcycles you hear buzzing up and down.
Imagine a country where fleets of delivery bikes are electric. The technology exists, and Woolworths are publicly pioneering the space regarding the charging of EV vehicles using renewable installations. Again, the same principle holds: imagine every e-bike’s battery being repurposed into a storage battery to provide back-up the self-same solar installation charging delivery bikes!
We don’t need to dream or imagine anymore. The technology and expertise exists and is ready to be deployed. It requires brave brands such as Woolworths to take a big step and everyone else will follow, if not through their own passion to save the environment, then through growing pressure to invest in sustainability by reducing their own carbon footprints.View more
MTN SA supplements aggressive battery rollout with generator sourcing from small business
As load shedding escalates across the country, MTN South Africa is working around the clock to protect customer’s connectivity, with an aggressive rollout of batteries, generators and alternate power supplies. MTN is also reaching out to small businesses to supply generators for its operations.
Charles Molapisi, MTN SA CEO, says MTN’s priority is keeping its customers connected and to this end, the company is exploring practical and innovative solutions to the power crisis. “There is no doubt the country is facing a power crisis but at MTN, we want to turn this crisis into an opportunity for small businesses by ‘crowd sourcing’ generators to further support our network,” Molapisi says.
MTN is inviting all businesses that are in possession of generators, to become potential suppliers to MTN. Whether the business has two or 20 generators, MTN is looking to partner. Michele Gamberini, the Chief Technology and Information Officer at MTN SA says increased load shedding is a challenge for battery recharging.
“Despite us having placed thousands of batteries at our sites across the country, the efficacy of those batteries greatly reduces once we pass stage 4 load shedding.”
Gamberini says MTN has upgraded its battery back-up solutions on over 80% of the sites already this year and is currently deploying more additional batteries. However, MTN is still faced with the challenge that the current outage schedule does not allow enough time for batteries to charge. Battery back-up systems generally take 12-18 hours to recharge, while batteries have a capacity of about 6-12 hours, depending on the site category. Consistent outages therefore have a direct impact on the performance of the batteries, while consistent theft of the batteries themselves means replacements need to be installed,” Gamberini says.
In addition to the battery rollout, MTN has also deployed over 2000 generators to counter the impact of stage 4 (and higher) load shedding. MTN is currently using more than 400 000 litres of fuel per month, to keep these generators operational.
MTN has put power contingencies in place in all provinces. Some of these interventions are:
- The establishment of “war rooms” per region with dedicated staff and network partners, focused on restoring major transmission infrastructure and base stations in the face of severe loadshedding.
- The deployment of additional emergency generators and an optimisation of the existing fleet of MTN mobile generators.
- The withdrawal of field maintenance teams, to allow them to be redeployed to focus on site restorations.
- The delivery of fuel to all critical facilities, to ensure all MTN data centers remain operational. MTN does not anticipate any disruptions to any facilities.
“To mitigate the risks, we have embarked on several emergency initiatives to ensure higher network resilience, despite the obstacles. We want to assure our customers that we are doing all we can to maintain connectivity during this challenging time,” concludes Gamberini.
Molapisi says that as a company born out of South Africa’s democracy, MTN is tackling the load shedding crisis with a solution-orientated positive mindset, that is the hallmark of so many South Africans.
“We need collective efforts to get us through this crisis and we believe that by partnering with businesses of all sizes and reach, we can both support local businesses while also maintaining our best network for all our customers,” Molapisi says.
Businesses looking to partner with MTN, in the supply of generators, are invited to contact MTN on firstname.lastname@example.org.
The minimum specification for generators include:
- 40kVA, petrol or diesel
- 100 litres minimum capacity tank
- Maximum noise level: 65dB
- Trailing cable: 10m.
- DIN 16 male plug.
Suppliers will be subject to due governance and procurement protocols, albeit through a streamlined process.View more
IDTechEx discuss unlocking the power of perovskite photovoltaics
IDTechEx’s new report, “Perovskite Photovoltaics 2023-2033”, explores the diverse range of opportunities presented by perovskite PV, including gaps in demand, supply chain innovation, and emerging applications.
Perovskite photovoltaics is a very young field, only emerging in 2009. Since then, research into the field has catapulted leading to the fastest acceleration in record efficiency of any PV technology.
Remarkably rapid efficiency gains
Perovskite photovoltaics have demonstrated remarkable efficiencies, with new applications enabled by their low cost, thin film architecture, and tuneable absorption. Record efficiencies are already on par with those of silicon PV, a technology with decades of research behind it. Additionally, perovskite PV does not use toxic or rare materials, and the manufacturing is well-suited to scalable solution-based deposition methods. This gives perovskite PV an edge over the existing dominant thin film alternatives such as cadmium telluride (CdTe) and copper indium gallium selenide (CIGS), which suffer from expensive synthesis and material scarcity.
Despite the demonstration of high-efficiency perovskite solar cells, commercial adoption is limited by concerns over long-term stability. Perovskites are well-known to degrade following exposure to environmental factors such as heat, air, humidity, and UV light. Encapsulation techniques and material engineering are crucial to preventing degradation of the perovskite film – solving these high-value problems is a compelling commercial opportunity.
Enabling emerging applications
Perovskite PV is very versatile. It can be used in mainstream applications such as in solar farms and rooftops. Since the weight of a perovskite module can be at least 90 % lighter than a silicon module, it is particularly well-suited to novel applications as well such as vertical building integration and structures with low weight tolerance. These are applications that mainstream silicon-based PV is not compatible with and therefore provide a niche opportunity for perovskite PV. Flexible solar modules are another exciting recent development in photovoltaics. Thin film perovskite PV is naturally well-suited to flexible designs. Conformality allows for greater practicality and aesthetic control when integrating into building facades as well as electronic devices. With the emergence of Internet of Things (IoT), perovskite PV could also be a very suitable choice for self-powered smart electronics. Batteries are typically used to power small appliances. Where hundreds or thousands of individual electronics are in use, replacing batteries can be unsustainable both in terms of labor costs and number of disposable batteries. Employing low-cost PV powered devices with lifespans of 10 years could be far more economical. There is already very early-stage commercialization of self-powered electronics using organic PV. This market is still very small and there is plenty of room for new entrants. Perovskite PV promises higher efficiencies and simpler synthesis than organics, and potentially longer lifespans.
The future appears optimistic for perovskite PV, since the technology has advanced much more rapidly than any other photovoltaic technology. Unlike CdTe and CIGS active layers, perovskites do not require rare or expensive raw materials. The synthesis is straightforward and deposition can be carried out without the need for a vacuum or high temperatures. The possibility of creating flexible devices also opens up new applications that mainstream silicon PV cannot target due to their bulk, weight, and rigidity. Despite the promising advantages, concerns surrounding the lifespan of perovskite solar cells remain at the forefront of the discussion.
This report, “Perovskite Photovoltaics 2023-2033”, gives 10-year market forecasts, key player analysis, technology benchmarking, and identification of core application areas. It examines the current status and latest trends in photovoltaic technology, supply chain, and manufacturing know-how. It also identifies the key challenges, competition, and innovation opportunities facing perovskite PV. Technical analysis and emerging trends are based on cutting-edge research and primary information with key and emerging players. This report focuses primarily on photovoltaic applications of perovskites and also provides an overview of alternative (non-photovoltaic) applications.View more