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FIFI PETERS: Sasol was one of many best-performing shares on the JSE right now, up virtually 5% after it launched two fascinating updates, considered one of which we’ve simply spoken about with Wayne McCurrie from FNB – its buying and selling replace and the way it’s doing within the wake of among the challenges on the market, load shedding as and the logistical challenges at Transnet.
The different replace displays on its plans to cut back its carbon emissions within the race to web zero that we’re seeing most corporations embark on. Sasol – which you’ll or could not know is the most important emitter of greenhouse gases in South Africa after Eskom – stated that it had signed three energy buy agreements [PPAs] for nearly 300MW of wind energy. This additionally comes as South Africa continues to expertise the worst spherical of energy cuts in our historical past because of the fixed plant breakdowns over at Eskom.
We have Danie Cronje, the senior vice-president for hydrogen growth at Sasol for extra on this. Danie, thanks a lot on your time. The focus is on the three renewable energy initiatives that you’ve assigned. Talk to us about these and the way a lot of a game-changer these initiatives are in your renewables journey.
DANIE CRONJE: Good afternoon Fifi, and good afternoon to the listeners. Yes, we’re very excited to announce the signing of the three energy buy agreements right now. These are necessary in our total decarbonisation technique, actually from two features.
On the one facet, the 69MW wind venture that we’ve pronounced with Msenge goes to provide renewable energy to our Sasol work operations. That goes for use to supply inexperienced hydrogen from our operations in Sasolburg, and that’s set to be on-line in direction of the top of the yr.
The different a part of that is the 2 energy buy agreements that we signed with Enel Green Power, and people are for our Secunda operations, supporting our decarbonisation technique and ambition that we’ve obtained for our Secunda operations over the long term. So that’s aligned with our technique and the actions we’re taking to realize our net-zero objective by 2050.
FIFI PETERS: So the facility buy settlement with Msenge, you say, goes to go in direction of the Sasolburg operations. Will the 69MW that you simply’ve simply introduced energy your complete operation?
DANIE CRONJE: It is particularly structured to energy our electrolysers that we’ve obtained in that facility. That facility makes use of much more energy than 69MW, however to ensure that us to make use of and repurpose that electrolyser to supply inexperienced hydrogen it wants renewable energy, and the facility that we are going to be buying by means of that settlement will then go into powering our electrolysers for the inexperienced hydrogen manufacturing.
FIFI PETERS: And what’s the finish recreation for the inexperienced hydrogen that you simply’ll ultimately be producing? Where will that go? Will that be on your personal operations or may a few of that go to different companions?
DANIE CRONJE: The plan is admittedly to promote that to our prospects. So it’s most unlikely that we’ll apply it to our personal operations for now. We do for the time being have already got prospects taking hydrogen from our operations in Sasolburg, however that’s gray hydrogen which relies on fossil gas. So we’re in discussions with our prospects to actually get them to acquire the inexperienced hydrogen from us in future.
FIFI PETERS: So your companions, Msenge and the French gasoline firm Air Liquide, how did you come to decide on them?
DANIE CRONJE: Air Liquide is our associate along with whom we’re procuring the renewable energy within the Secunda website. Air Liquide owns our separation models at Secunda.
So collectively – Air Liquide and us, Sasol – have signed a procurement settlement with Enel Green Power. We’ve gone by means of fairly an in depth course of during the last two years, the place we went out to the market and requested for bids to come back in for renewable energy energy.
Those bids had been then submitted to each Air Liquide and ourselves. We’ve a joint working committee that went by means of the choice course of based mostly on plenty of standards, after which chosen a couple of unbiased energy producers with whom we are actually negotiating, closing out the PPAs.
So now, with the primary tranche that we’re saying, our ambition there’s to collectively procure 900MW of renewable energy within the foreseeable characteristic.
FIFI PETERS: Are you capable of give us the worth of those agreements?
DANIE CRONJE: The worth of those agreements remains to be being negotiated when it comes to the tariffs. Once we’ve reached monetary shut, which is ready [for] later within the yr, that might be higher recognized.
FIFI PETERS: Negotiations are nonetheless happening, that’s what you’ve simply stated. So are these the factors, the situations which are nonetheless excellent for all techniques to go forward?
DANIE CRONJE: These contracts we’ve signed, the PPA agreements, [need] regulatory and financing approvals and remaining changes to the agreed tariffs that might be effected as we attain monetary shut. Those are type of regular for a majority of these contracts to be open at this level, and might be closed out as we put them by means of monetary shut.
FIFI PETERS: Which is predicted to take how lengthy?
DANIE CRONJE: The monetary shut is anticipated to take us about six months. It could also be a bit sooner for Msenge. They are a bit extra superior with their processes, so we hope to achieve monetary shut with Msenge a bit sooner, within the subsequent two months. But Enel is scheduled to shut type of halfway by means of the yr.
FIFI PETERS: In phrases of price, whereas these two agreements are anticipated that will help you decrease your carbon emissions, what does this do to the price of your energy invoice? Are there any potential financial savings that could possibly be forthcoming additionally?
DANIE CRONJE: It is dependent upon how we lastly land the tariffs. That’s nonetheless open as we undergo monetary shut, nevertheless it’ll be similar to the Eskom tariffs, or a bit cheaper. It’s not simple to name for the time being, and that’s because of the financial-close course of that must be accomplished.
FIFI PETERS: Okay. In phrases of Eskom, how is load shedding impacting the enterprise?
DANIE CRONJE: A few issues right here. Our operations run on a 24-hour foundation, and wish energy all through that interval. So we’re in some ways depending on Eskom to provide us all through that interval. But it’s necessary to know that we additionally generate about 50% of our personal energy, and between Eskom and our personal energy era we’ve got the flexibility then to maintain our vegetation operating for the complete 24 hours of every day.
FIFI PETERS: It sounds such as you’re saying that load shedding isn’t having a fabric influence on what you are promoting, given that you simply energy fairly a big quantity of your energy wants yourselves?
DANIE CRONJE: Not from an operational perspective. Where it does have a big effect is in fact on our prospects and the provision chain processes decrease down.
FIFI PETERS: Would you say that load shedding and the actually persistent energy cuts may doubtlessly speed up this push in direction of diversifying energy sources [more] than would have in any other case been the case if there was a relentless energy provide from Eskom?
DANIE CRONJE: Certainly what we do know is that these energy agreements and provides of energy are going to alleviate, total, the ask [from] the Eskom grid. We due to this fact are, from our perspective, pushing very exhausting to get the renewable energy into our operations.
With that, that places launched energy again into the grid for the remainder of South Africa and shifts energy, and assists in eliminating some stage of load shedding, I hope, by means of the time.
But it’s excessive precedence for us and, different than simply ensuring that we’re nicely on observe for our decarbonisation journey, it should additionally profit the general South African electrical energy provide.
FIFI PETERS: Danie, thanks a lot for taking the time to hitch us, updating us on the inexperienced journey, the renewables journey that Sasol is taking there. Danie Cronje is senior vice-president for hydrogen growth at Sasol.
