FIFI PETERS: All issues vitality proper now, as a result of there was rather a lot of optimistic suggestions [on] President Cyril Ramaphosa’s Family Meeting yesterday, the place he outlined plans to attempt and end load shedding and enhance the vitality sector in order that the economic system is on a path whereby it will possibly develop and create jobs, because it’s supposed to.
Read: At final: CR throws the kitchen sink at load shedding
Some of the adjustments that the president introduced – I’m certain you’ve heard all of them all through the day – embrace fixing Eskom, fast-tracking the procurement of new technology capability, rising the extent of personal investments presently in South Africa’s vitality sector, and enabling you and me and different households that may afford and need to, to put money into rooftop photo voltaic power with ease.
But let’s get extra suggestions on what the president mentioned. We are joined by Jan Fourie, the overall supervisor for Sub-Sahara Africa at Scatec. Jan, thanks a lot to your time.
JAN FOURIE: Good night, Fifi.
FIFI PETERS: You introduced, late final week, earlier than the president’s announcement yesterday, that you simply’re on this path to construct a photo voltaic power plant [with] some battery storage in it [three Kenhardt projects in the Northern Cape with 540MW total capacity]. Your mission had reached monetary shut, which means that you simply’ve obtained the cash that you simply want to go forward.
Read: Scatec to break floor on big renewables mission in SA
So, fast-forward [to] this week, following the announcement that you simply already made, which sounded fairly optimistic, what do you concentrate on the vitality plans that the president introduced yesterday – and do you suppose it’ll make your job loads simpler to get your mission off the bottom?
JAN FOURIE: Thanks, Fifi. The announcement made by the president final evening I believe is one thing that everybody within the business has been ready for, for a very long time. Finally we’ve got a practical and holistic vitality plan that addresses the mandatory components, and not only one or two issues. I believe there’s now a plan on the desk that appears to tackle board all of the enter that’s been given by business consultants and the renewable sector as a complete.
I actually consider it’s a optimistic step ahead, not only for variety of renewable corporations like ourselves, however for the taxpayers within the nation at giant, as a result of I consider we lastly have a sensible plan that has a excessive likelihood of really delivering an actual answer.
FIFI PETERS: The president spoke fairly a bit about authorities listening to the cries of the personal sector round crimson tape – the truth that it was fairly a headache for you guys to recover from the regulatory burden and the forms and this and that, which simply made your jobs much more tough once they didn’t want to be.
I’m eager about your expertise round crimson tape in your present photo voltaic mission. How has that been for you?
JAN FOURIE: Scatec has been within the nation for about 10 years, and we’ve been lively in all of the rounds, one, two – we missed out on three, 4 – 5 and the RMIPP [Risk Mitigation Independent Power Producer Procurement Programme].
There’s positively been, I might say, on one degree an enchancment on that facet, as a result of on the environmental facet there was the so-called Renewable Energy Development Zones, the place there’s fast-tracked improvement for renewable vitality tasks. So that was the primary, I might say, optimistic improvement on the allowing facet.
And now with the latest shut of our RMIPP tasks final week Tuesday, we’re additionally working fairly intently with the presidential infrastructure committee aiding us in acquiring permits inside the required area of time. So there’s nonetheless loads of work to be accomplished to have the ability to do it, however [it’s] simply ensuring that authorities departments are coordinated.
So at the very least from our facet, there’s a authentic effort by authorities to help in doing this.
But, as with giant infrastructure tasks, after we are speaking a couple of billion-dollar mission there’s loads of work, there’s a lot of allowing and regulatory work to be accomplished – so you’ll be able to’t count on it to occur in a single day. But what I can say is there does appear to be a very authentic effort by authorities to help the personal sector in doing this.
FIFI PETERS: Right. Talk to us about your plant. This is a 540MW photo voltaic plant that we’re speaking about. What’s the end recreation right here? Do you see your self being a possible provider to Eskom?
JAN FOURIE: Well, we’re already a provider of power to Eskom. We are already doing about 500MW of renewables, promoting to Eskom.
What makes this mission of ours novel – and I consider it’s actually a coming-of-age story for renewables – is that now we will ship power on faucet.
In the previous there’s at all times been the argument that renewables are unreliable, you solely have power when the solar shines or the wind blows, however with the mixing in a so-called hybrid power plant, the mix of batteries with photo voltaic power, when the grid operator asks us to ship power any time between 5:00 within the morning and 21:30 at evening, we will do this, as a result of of the battery element that may then carry us by means of.
So I believe all of these outdated intermittency arguments from the fossil-fuel foyer have actually gone away and we’re proving that now.
FIFI PETERS: And the price? Is it actually cheaper? I’ll let you know why I’m asking this query. I spoke to one of the gamers – [the IPP office] – however one of the federal government gamers who approve tasks within the renewable area, and they mentioned that loads of the tasks proper now are on ice, as a result of the price of the inputs of these photo voltaic power vegetation has elevated, and [that] of the batteries has elevated, simply because of the publicity to the Russia-Ukraine conflict. Ultimately you guys have to recoup that value from someplace, and there have been even requests from some gamers to attempt and recoup these prices by means of increased tariffs, which in actual fact the IPP workplace was rejecting. I’d like to perceive the price at this time [when] you and I are having this dialog. Is it nonetheless cheaper?
JAN FOURIE: So possibly let’s begin with the primary query across the plant. The mission/plant itself is, name it, principally value a billion {dollars}. But what one wants to issue into the equation is the truth that we’re principally paying [for] gas and for the plant up entrance. So over the 20-year life of the power there are not any further gas prices or something to be paid.
What some persons are possibly not that aware of is, for instance, in the event you’ve obtained a gas-fired power plant and you want to purchase LEG [liquid ethylene gas]. LEG is an worldwide commodity; it’s offered on the worldwide market and in bottles. So in the event you’ve obtained a power plant that makes use of LEG and you want to purchase it available in the market, then you might be topic to fluctuations, not solely in phrases of the commodity value but additionally the volatility of the rand.
Those are all pass-throughs to authorities that finally have an effect on the price of electrical energy to the off-taker, which isn’t the case with the renewable answer [such as that which] we closed final week. The solely factor is that the value is topic to inflation, CPI [consumer price index] escalation over time. So the danger allocation between a renewables-only plant versus a fossil gas plant is vastly totally different. I believe it’s an necessary distinction that off-takers want to consider when they’re making selections about vitality procurement.
And then on the second level I believe within the renewable sector we’ve been fairly lucky that the price of inputs over a quantity of years has come down, in the event you take a look at the price of photo voltaic PV [photovoltaic] modules and how the costs have come down over the past decade. Similarly with trackers and with inverters it’s come down considerably. But what we’ve see now of late within the final, name it 12 to 24 months, the costs haven’t gone down. There’s been variety of volatility available in the market. There’s been an uptick in logistics prices and in some of the enter prices related to it.
But the profit for presidency on this occasion is that every one of the price will increase [are] for the account of the IPP [independent power producer], for higher or for worse.
So that’s a business choice that unbiased power producers want to make to say, nicely, we’re taking a view of what the enter prices are, and the federal government solely begins paying as soon as electrical energy is delivered, and then you definately’re paying for that [on a] per kilowatt hour foundation.
I believe there’ve additionally been gamers on the market which have taken fairly aggressive views of the place expertise costs could be in future, and sadly this time round some of that has gone towards the market.
FIFI PETERS: I believe that we should make area to discuss that somewhat bit extra at a later stage. But in the principle it looks like a thumbs-up from you [for] what the president had to say relating to the vitality plans.
Jan, we’ll go away it there for now, sir. Thanks a lot to your time. Jan Fourie is common supervisor for Sub-Sahara Africa at Scatec.
