__MAIN_TEXT__

Page 1

The Sustainable Energy Resource Handbook South Africa Volume 9 The Essential Guide

ISBN 0251-998X 9-78062-045-1 ISSN

9

770251 998807

9

789780 620455

08 09

www.alive2green.com


CONTENT

contents 1.

Trends and statistics of Solar PV Distributed Generation in South Africa

19

Could renewables unlock localised, affordable power generation for Africa?

26

By Aradhna Pandarum (Eskom), Gaoshitwe Lekoloane (CSIR) and Dominic Milazi (CSIR)

2.

By Andrew van Zyl, Chris Dalgliesh, Darryll Kilian, Marius van Huyssteen, Wouter Jordaan

3.

Energy Developments in South Africa

4.

Embedded Energy Solves Our World’s Crises

5.

The science of climate change

35

6.

South Africa falling behind with digital transformation

39

7. 8.

African oil and gas companies need to remain competitive

9.

Turning community trash into Treasure

By Hemel Bhana

30

By David Lipschitz

By Prof Ernst Uken

By PwC South Africa By Derek Boulware

44

Gender Mainstreaming in the Energy Sector By Valerie Geen

48

Gift Lubele

Negative charge: why is Australia so slow at adopting electric cars?

56

11.

Machines will take our jobs and it’s going to be okay

58

12.

Do we need HR for the robot workforce?

62

13.

International outlook: Utility management in East Africa

64

14.

Going solar: What you need to know upfront

66

10.

By Graciela Metternicht, Danielle Drozdzewski, Gail Broadbent,

2

By Craig Johnston

By Lenore Kerrigan

By: Marleze van Loggerenberg By Kevin Norris


The National NationalEnergy Energy Regulator (NERSA) The Regulator (NERSA) makes makes aa valuable to the valuablecontribution contribution to socio-economic the socio-economic development prosperity of theof people of developmentandand prosperity the people of South regulating the energy industryindustry SouthAfrica, Africa,by by regulating the energy in government laws, policies, in accordance accordancewithwith government laws, policies, standards and international best practices in standards and international support of sustainable development. best practices in support of sustainable development.

NERSA is a regulatory authority established as a juristic terms of Section 3 of theestablished National as a NERSAperson is a inregulatory authority Energy 2004of(Act No. 403ofof2004). juristicRegulator person inAct, terms Section the National NERSA’s mandate isAct, to regulate the No. electricity, Energy Regulator 2004 (Act 40 of 2004). piped-gas and petroleum pipelines industries NERSA’s is toRegulation regulateAct,the2006 electricity, in terms ofmandate the Electricity piped-gas pipelines industries (Act No. 4 of and 2006),petroleum Gas Act, 2001 (Act No. 48 in 2001) termsand of Petroleum the Electricity Regulation Act, 2006 of Pipelines Act, 2003 (Act No. of 2003). (Act60No. 4 of 2006), Gas Act, 2001 (Act No. 48

Jacob Modise Chairperson

Maleho Nkomo

Deputy Chairperson Jacob Modise Chairperson

Maleho Nkomo Deputy Chairperson

of 2001) and Petroleum Pipelines Act, 2003 (Act

NERSA’s mandate No. 60 of 2003).is further derived from written government policies as well as regulations issued by the Minister of Energy. NERSA is expected NERSA’s is further derived fromin written to performmandate the necessary regulatory actions government policies as well as regulations anticipation of and/or in response to the changing issued circumstances in theof energy industry. by the Minister Energy. NERSA is expected

to perform the necessary regulatory actions in

The Minister ofofEnergy appoints Members of the anticipation and/or in response to the changing Energy Regulator, comprising Part-Time (Noncircumstances in the energy industry. Executive) and Full-Time (Executive) Regulator Members, including the Chief Executive Officer The Minister of Regulator Energy appoints Members (CEO). The Energy is supported by staff of the under the Regulator, direction of the CEO. Energy comprising Part-Time (Non-

Chris Forlee Full-Time Regulator Member and Chief Executive Officer

Yusuf Adam Part-Time Regulator Member

Chris Forlee Full-Time Regulator Member and Chief Executive Officer

Nomfundo Maseti Full- Time Regulator Member: Piped-Gas and Electricity

Yusuf Adam Part-Time Regulator Member

Executive) and Full-Time (Executive) Regulator

tor

Kulawula House, 526 Madiba Members, including the Street, Chief Executive Officer Arcadia, 0083 (CEO). The Energy Regulator P O Box 40343, Arcadia, 0007 is supported by staff

under the direction of the CEO.

Tel: (012) 401 4600 • Fax: (012) 401 4700 E-mail: info@nersa.org.za Kulawula House, 526 Madiba Street, Website: Arcadia,www.nersa.org.za 0083

Nomfundo Maseti Full- Time Regulator Member: Piped-Gas and Electricity

Muzi Mkhize Full-Time Regulator Member: Petroleum Pipelines

Fungai Sibanda Part-Time Regulator Member

tor

P O@NERSA_ZA Box 40343, Arcadia, 0007 @NERSAZA

Tel: (012) 401 4600 • Fax: (012) 401 4700 E-mail: info@nersa.org.za Website: www.nersa.org.za @NERSA_ZA @NERSAZA

Muzi Mkhize Full-Time Regulator Member: Petroleum Pipelines

Fungai Sibanda Part-Time Regulator Member


The Sustainable Energy Resource Handbook South Africa Volume 9 The Essential Guide EDITOR

CLIENT LIASON

CONTRIBUTORS

DISTRIBUTION & CIRCULATION MANAGER

Gregory Simpson

Linda Tom

Aradna Pandarum, Gaoshitwe Lekoloane, Dominic Milazi, Hemel Bhana, Andrew van Zyl, Chris Dalgliesh, Darryl Kilian, Marius van Huyssteen, Wouter Jordaan, David Lipschitz, Ernst Uken, PwC South Africa, Derek Boulware, Valerie Green

PEER REVIEWER

PROJECT MANAGER Louna Rae

ADVERTISING EXECUTIVES

Dale Coert Louna Rae Zaida Yon

Ernst Uken

LAYOUT & DESIGN Richard Smith

EDITORIAL & PRODUCTION

Gregory Simpson Shannon Manuel

Edward MacDonald

PUBLISHER www.alive2green.com

ADMIN MANAGER Chevonne Ismail

The Sustainability Series Of Handbooks

PHYSICAL ADDRESS: Alive2green Cape Media House 28 Main Road Rondebosch Cape Town South Africa 7700 TEL: 021 447 4733 SALES: 021 987 7616/3722 FAX: 086 6947443 Company Registration Number: 2006/206388/23 Vat Number: 4130252432

4

ISBN No: 978 0 620 45240 3. Volume 5 first Published February 2012. All rights reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written consent of the publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions.

DISTRIBUTION AND COPY SALES ENQUIRIES distribution@alive2green.com

IMAGES AND DIAGRAMS: Space limitations and source format have a affected the size of certain published images and/or diagrams in this publication. For larger PDF versions of these images please contact the Publisher.

PRINTER FA Print ADVERTISING ENQUIRIES sales@alive2green.com

INTERNATIONAL FRANCHISE ENQUIRIES info@alive2green.com PAPER


PEER REVIEW

PEER REVIEW

ALIVE2GREEN PEER REVIEW PROCESS

5


Contributors Dominic Milazi

Dominic Milazi joined the Energy Division at the Council for Scientific and Industrial Research (CSIR) in May 2015, where he is the Research Group Leader for Energy Market Design and Policy Analysis. Prior to joining the CSIR, he served as Project Manager (Renewable Energy Initiatives) at the National Department of Energy. In this post, he was responsible for the South African Wind Energy Program working in partnership with the United Nations Development Program (UNDP) and the Global Environmental Facility (GEF).

Hemal Bhana

Hemal Bhana, Strategy Manager at Carbon Trust Africa; a sustainability consultancy with a mission to accelerate the move to a sustainable, low carbon economy. Bhana has many years of work experience fulfilling roles as programme manager (National Business Initiative), management consultant (Accenture) and mechanical engineer (Sasol Synfuels) within mainly the energy sector. He also has experience within the mining, banking and manufacturing sector; and has worked in South Africa and Nigeria. His academic qualifications include an MBA from the University of Cape Town.

Valerie Geen

Valerie Geen is currently a Senior Advisor within the Energy Division of the United Nations Industrial Development Organization’s regional office in South Africa. Apart from supporting policy and implementation of Energy Efficiency within UNIDO’s programmes, she is also the focal point for gender mainstreaming in Energy. With over 30 years’ experience in various careers, she led the work of the National Business Initiative in Climate Change and Energy from 2006 – 2015.

Andrew van Zyl

Andrew van Zyl, Partner and Principal Consultant at SRK Consulting, holds B Eng (Chemical) and M Com (Financial Economics), worked in production and project roles prior to 2006, at which time his focus shifted to strategy, business development and valuation. He has spent several years as technical advisor to government committees overseeing the negotiation of mining conventions and rail and mineral terminal concessions.

Darryll Kilian

Darryll Kilian, Principal Environmental Scientist and Partner, SRK Consulting. Kilian has a Masters Degree in Environmental and Geographical Science from the University of Cape Town. He has over 24 years of experience in environmental management and development work, and has worked on environmental projects throughout Africa, including Tanzania, Angola, Sierra Leone and Mali.

6


David Lipschitz

David Lipschitz FSAAEA, computer scientist, mentor and energy analyst with a Bachelor of Science Honours and an MBA, has run a Software Development business since 1994 and an Energy business since 2008. David motivates people to change the way they think about their environment and shows people that it is possible to live a sustainable lifestyle with minimal impact on the earth. Keynote, conference and workshop topics include energy efficiency, load shedding, and producing electricity.

Derek Boulware

Derek Boulware, PwC Africa Energy Advisory Team Leader has over 12 years experience in the oil & gas industry and has delivered projects in 22 countries. He joined the PwC Advisory Strategy & Operations team based in Cape Town, South Africa in 2013 where he manages the team and has led several large-scale projects for clients as well as the 2014 - 2018 Oil & Gas Reviews, five in a Thought Leadership series released by PwC.

Aradhna Pandarum

Aradhna Pandarum, renewable energy engineer at Eskom Research, Testing and Development. I hold a Bachelor of Science Honors in Electronic Engineering. My responsibilities include research into the several facets of the renewable energy field mainly focusing on developing innovative solutions which make use of renewable energy to improve the financial and environmental sustainability of the business.

Gaoshitwe Lekoloane

Gaoshitwe Lekoloane, PV Technologist at CSIR Energy Centre. I have National Diploma in Electrical Engineering. My principal accountabilities are PV Technology market and state of research intelligence. Identifying new opportunities for CSIR’s testing activities, for example consulting services in form of due diligence and quality analyses that could be offered on PV module, module-factory, and plant level.

Professor Ernst Uken

Professor Ernst Uken is the Director of the Energy Institute at Cape Peninsula University of Technology. The Energy Institute was established in 1990 by Prof Ernst Uken to promote renewable energy and energy efficient practices.

Gift Lubele

Gift Lubele is young South African global Leader, current BA (Hons) Business Management student at the African Leadership University in Mauritius, director of G N LUB and business Solutions Intern at Internet Solutions. For more information about Gift visit: www.giftlubele.com

7


Foreword:

Martin Vergunst Business Solutions Executive at T-Systems Smart cities are best defined as urban ecosystems that leverage technology and connectivity to deliver services to citizens. They touch on almost every aspect of public life: basic service delivery (like water, electricity and sanitation), healthcare, public transport, security and surveillance, traffic management, education, energy-efficient buildings, and technology-driven payment systems. A smart city integrates various municipal departments, connected by innovative technologies, giving citizens access to public services with ease and low cost. In this way, the smart city vision promises to fuel economic development, increase levels of citizen participation, and lead to a high quality of life for all. In South Africa, our urban hubs are characterised by some unique aspects – most notably the fact that many residents live some distance from the actual town and city centres. This results in local governments struggling to cost-effectively provide certain basic services to these regions. We have also seen a dramatic increase in the numbers of urban residents versus rural residents in the past few decades. This has placed stresses on municipalities and urban planners, as they struggle to keep up with the influx of new people to SA’s major metros.

8

Urbanisation is, in fact, a global trend. The United Nations predicts that the world’s urban population will reach 6.3 billion people by 2050 – an astonishing 72% increase from the 3.6 billion that were recorded in 2011. Smart metering is an ideal starting point for cities that are looking to embrace the smart city concept. It provides a way for local government to demonstrate the opportunities that are now available through smart components (such as a smart meters), combined with Cloud-based platforms, sophisticated analytics engines, and online interfaces to present data directly to individual citizens. Smart platforms enable the regular supply of services to all citizens – by minimising power outages, enacting load balancing and load-limiting, enabling variable pricing for different times of the day, and different sectors of the population, and detecting leakages in water pipelines or power losses in electricity networks. In this way, smart metering platforms further one of the central tenets of the new South Africa: inclusivity. By enabling the efficient distribution of electricity and water services to all sectors of the urban population, all citizens are able to participate in their cities, and their countries, economic development.


/ Perfect Welding / Solar Energy / Perfect Charging

N W

E S

SnapINverter Technology

Integrated data communication

Dynamic Peak Manager

Smart Grid Ready

Fast PC Board Replacement

Superflex Design

24h

o

MORE PROFIT IS POSSIBLE. NOW THAT THE SNAPINVERTER GENERATION IS AVAILABLE. ur

so f

sun.com

Efficiency equals profit! Working with inverter technology has never been as easy as it is with our SnapINverter generation: / In system design: maximum flexibility for use with all PV systems / In installation: extremely easy fitting due to intelligent design / In training: a standard mounting system for all devices / Already available in single phase: Primo / Already available in three phase: Symo and Eco

www.innomatic-solar.co.za solar@innomatic.co.za +27 (0)11 840 0840


EDITOR’S NOTE

The dark truth Sitting in the dark, attempting to write this Editor’s letter, I am reminded about how ineffective Eskom has been in securing our energy security, while failing to progressively move ahead with the meaningful rollout of mass clean energy.

Gregory Simpson Editor

The ailing parastatal continues to derail any chance of economic recovery every time there is a blackout, with businesses of all sizes hit by the latest round of load shedding, putting the brakes on much needed foreign direct investment (FDI) and growth. As a result of poor management and decision-making by a string of Eskom CEOs, there is little faith that they are able to fulfil their mandate to the nation, which is already grappling with spiralling unemployment. We need to realise that there are many employment opportunities in the renewable sector, provided it is allowed to flourish. Thankfully, round 4 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was signed off last year by Minister Radebe, giving the renewable energy sector some respite after a torrid storm of political interference under the Zuma regime. With our plethora of natural resources, from sun, wind, gas and coal, we should really not be in this situation. To make matters worse, the energy supplier has taken yet another sizable loan, this time from the Chinese Government, reportedly, to prop up the sinking ship. In years gone by, with Finance Ministers like Trevor Manuel at the helm, there was a far greater respect for debt and every effort was made to not lend money unnecessarily. With our technical know-how and resources available, there is no need to rely on the Chinese to come in and run the show, and have a say in our energy future after another loan was approved last year. Hats off to the City of Cape Town for seeing the bigger picture and pushing for IPPs to supply electricity. If Eskom is unable to fulfil their mandate, somebody else should be able to. Until the next time, Gregory Simpson, Editor

10


7


Materials and technologies section

12

PAGE BioTherm Seka

13 14-15

Investec

17

Geo Group

18


Case Study: BioTherm

BioTherm Energy BioTherm Energy is Africa’s leading independent power producer focusing on solar and wind projects. Founded in 2003, it focused on development of gas and waste heat cogeneration projects. In 2011, it was restructured to focus on renewable energy. BioTherm has the unique ability to fully develop renewable energy projects in-house with experts in site development, financing and construction management and operations. The company is focusing on expanding their development pipeline through partnerships with intensive energy users as well as working with governments, local partners and industry associations to extend renewable energy commitments across the continent. BioTherm oversees three operational wind and solar projects allocated under the First Round of the South African Renewable Energy Independent Power Producers Programme (REIPPP) and is currently constructing 284 MW of solar and wind projects awarded under the Fourth round of this program in South Africa. The Company’s South African development pipeline includes over 1 GW of fully permitted and bid ready South African wind and solar projects.

BioTherm is aggressively expanding its development footprint across the African continent and established permanent presence in Ghana in 2017. The Company continues to actively explore solar and wind development opportunities in over ten countries on the continent. As a green African utility, BioTherm brings with it a deep understanding and leverages its past experience to deal with the challenges of doing business and developing projects across Africa.   To date the Company has been successful in securing over 500 MW of Power Purchase Agreements on the African continent in seven different countries. The management at BioTherm strongly believes in Africa’s abundance of natural resources and in the enormous potential of renewable energy that it brings towards the role it has to play in the continent’s growing economy. A proud “home-grown” company, BioTherm is committed to being at the forefront in Africa’s renewable energy sector by ensuring that its projects are competitive, bankable, built on time and within budget but also ensuring that each project creates sustainable socio-economic impact in the communities in which they operate.

13


Power and infrastructure finance The critical role of access to power in economic growth is perhaps one of the few core elements of economic development. There are few resources that can benefit the public as broadly and as effectively as access to power. From schools to hospitals and homes to offices, the existence of plentiful, affordable and reliable power is the cornerstone of growth in the modern era. With this reality in mind there is an intense effort by governments, international organisations, and the private sector to drive investment into power projects in both under-served power markets in developing countries and remote markets in developed countries. The intensity of the drive to electrify the world has taken on an even greater dimension in recent years with the realisation that access to power can also serve the equally important goal of a reduction in carbon emissions if much of the new investment is directed away from conventional fuel sources towards cleaner sources of power. Having the needed financial support is key in achieving the needed power and infrastructure solutions.

16


Investing in infrastructure If Africa is to fulfil its growth ambitions, it’s imperative that it invests in infrastructure projects that are both sustainable and that directly service the development needs of the people. Mineral and agricultural wealth are all well and good, but without the right infrastructure to support transport, power, water and other utilities, these resources will remain inaccessible. Proper infrastructure not only allows countries to access, manage and market their resources, but can also provide the opening for secondary and tertiary industries to thrive and to lift people out of poverty. However, these projects are typically long-term in nature, so funders will always scrutinise the economic and political environment when determining the viability of the particular project. A stable economic and investment-friendly regulatory environment will always be favoured. Working through a combination of private and developmental funding agencies helps, as does a presence on the ground. This brings funders closer to the projects and the communities they operate in, both in assessing viability and in making sure that they work.

Investec has worked this way on a number of highly successful projects in recent years, including: The Nacala Rail Corridor: A rail and coal terminal project from the Mozambican port of Nacala-a-Velha, linking Malawi with the sea. Started in 2012, and led by Brazilian resource firm Vale and Mozambique’s state rail and harbour operator CFM, the project has created jobs in both countries. Karadeniz Powership Ghana: Karadeniz designs and builds “powerships” – floating generators powered by liquid fuel or natural gas – that provide power to industries and communities while moored in harbour. Investec was involved in funding the powership in Ghana that allows local fishermen to keep their catch refrigerated for long periods. Kuvaninga Energia Natural Gas Project: The Kuvaninga Project, a gas-fired power plant in Mozambique, went live last year and provides 40Mw of electricity to the grid in Southern Mozambique. It draws gas from the Temane gas field in Inhambane province.

2

SUSTAINABLE ENERGY RESOURCE HANDBOOK

17


Proven Foundation Solutions for Solar Projects Solar projects require a solid foundation, installed with precision and often in close proximity to each other. Ductile iron piles meet this requirement – they are robust and can be driven into the ground, open-ended, to form an anchor, suitable for the high compressive and tensile loads required by solar projects. It replaces large diameter augured piles very efficiently, and the super structure (A-frame, PV frame, or stand-alone monopoles) can be attached with several different pile configurations. We know this because we have tested and installed it on multiple sites extensively across South Africa for Solar PV and CSP projects, from mine dumps in Gauteng, to filled platforms in Durban King Shaka Airport (PV) and all across the Northern Cape, with over 70 000 meters of ductile iron pile installed on three different 100MW CSP projects. Our wide and varied experience in this field teaches us that the driven ductile iron piles can achieve fast installation speeds, to tight tolerances and provide effective foundations for all applications, in a wide range of tough geotechnical conditions. The piles are driven in with a powerful hydraulic breaking hammer, and are able to penetrate even medium hard rock, and provide a solid rock socket, with working tensile loads of up to 3000 kg. The ductile iron pile, in an open-ended format, was first used on a very large scale for the Kaxu Concentrated solar power plant in the Northern Cape. 58 500 open-ended ductile iron piles were installed. Each pile had a 40mm diameter threaded bar concreted into its 103mm diameter, open head. The pile tolerance was extremely tight, with a maximum deviation of 3mm allowed, to ensure the parabolic trough solar mirrors could be effectively attached to the foundation. Precision was also key during the Dube Trade Port PV plant installation project in KwaZulu-Natal - if the installed panels were not fully aligned the power plant would be less effective. Geopile Africa installed 163 piles and cut them to an average height of 1.3 m from NGL. A special clamp was designed to connect the perlin and beam structure that holds the solar structure to the foundation. The driven ductile iron pile installation process is simple, fast and safe, with only three crew members required per rig (operator included). At Kaxu, with five rigs, Geopile Africa was able to install up to 100 pile positions per day at a rate of 5 minutes per pile, achieving an average of 5000 piles per month. The project was completed in just over 8 months, almost 6 months ahead of schedule. This is the largest single ductile iron pile project on the planet, to date and it was installed on budget and before due date. Warwick Nel, Operations Manager, Geopile Africa

Rock Solid Reliability


CHAPTER 1

Trends and statistics of Solar PV Distributed Generation in South Africa Aradhna Pandarum (Eskom), Gaoshitwe Lekoloane (CSIR) and Dominic Milazi (CSIR)

Rising electricity prices, potential for power outages awareness on the need to reduce greenhouse gas emissions, and decreasing technology costs have made investment into small scale embedded generation more attractive to many enduser consumers (residential, commercial, Industrial). Such installations are already commonplace in industrialised economies but developing countries, such as South Africa, are now observing a similar emerging trend as presented in this article. The installations reported here have capacities ranging from 1kW to 5MW and, as such installations continue to increase, the impacts are felt by multiple stakeholders across the energy sector. Such stakeholders include electricity distributors, municipalities, industry (manufacturers and installers), power system planners, the national grid operator, as well as policy-makers. South Africa continues to experience an increase in consumers implementing this technology; a trend that can be traced as far back as 19921. The trend of increased installation has only recently accelerated in earnest given the low electricity tariffs offered by Eskom prior to 2010. The trend in installations is visible across all segments of consumers including industrial, agricultural, commercial and residential. Solar PV costs are forecasted to decline and continue along this trajectory well beyond 2020 as shown below. As solar PV and battery storage costs continue to decline, rooftop solar PV will provide an increasingly attractive business

19


Figure 1: Forecasted cost trajectory for utility scale solar PV systems (Source: IRENA/Photon Consulting)

case to supply own consumption and as a backup intervention, with the inclusion of storage, when grid-based power supply is not available. Currently, statistics for the penetration of solar PV are based on industry estimates and can neither be regarded as comprehensive nor official. There is therefore a need to institutionalise the collection, verification, and validation of such statistics. The current statistics do, however, indicate that the rapid growth of rooftop PV is a reality in South Africa. As long as there is no official or effective SSEG2 registration process for low-voltage connected customers in place, uncertainty about these numbers will remain. SSEG Registration and impact of installations The National Energy Regulator of South Africa (NERSA) has confirmed that they will be initiating a formal national registration

process for SSEG, however, this process will most likely only be fully operational in the next 2 to 3 years. In the interim, certain municipalities have taken the initiative to establish their own registration processes to allow connection to their distribution grid infrastructure and, in some cases, as a prerequisite to qualifying for an embedded generation feed- in/net metering tariff. The South African Department of Energy (DoE) has recently released Schedule 2 to the Electricity Act of 20063 which revised the licencing and registration requirements for categories of generators. In accordance with these new rules, generators smaller than 1MW are exempt from having to obtain a licence but need to be registered with NERSA. The schedule 2 amendments allow customers to install small scale embedded generators (<1MW) without having to acquire a generating license from

The highest penetration of installations is in the Gauteng and the Western Cape provinces, predominantly due to a combination of significant commercial and industrial sectors in these provinces 20


CHAPTER 1 NERSA even if all or a portion of the energy is sold to other parties. This article estimates the quantity of rooftop PV Embedded Generation (EG) installations between 2003 and December 2017 based on information collected from 3 sources namely: Eskom, municipalities with a formal registration process for these installations and Power Quality Renewable Service also known as PQRS (a South African private sector firm that tracks such installations). These rooftop PV installations impact various stakeholders on several levels, such as revenue loss to municipalities and distributors, impact on the electricity grid and system operations in terms of forecasting residual load and the accuracy of short and long term net demand forecasts. As more South African customers install rooftop PV, the following engineering challenges could surface: • Power quality issues due to harmonics from generation sources using power electronics. • Voltage variations due to reverse power flow in the distribution network. • Thermal stress of distribution network equipment due to potential increased loading during periods of peak generation. • Protection and safety concerns due to possible islanded operation and protection mal-operation.4 Growth in Small-scale Embedded solar PV installations Ministerial Determinations gazetted in 2011, 2012, and 2015 allow for the procurement of electricity from utility and small scale renewable generation. The utility scale projects have been procured via the Department of Energy Independent Power Producer Programme and formal statistics are available for these utility scale

plants. Embedded generators fall outside of the formal government procurement programme and are not accounted for in the utility scale program statistics. There are currently 34 municipalities in South Africa who have an approved registration process designed for grid connection of small scale embedded PV installations. Seven municipalities have NERSA approved feed-in tariffs as summarised in Table 1. These tariffs demonstrate that several municipalities are in fact allowing export of energy into their distribution grids and compensating customers accordingly. Data received from various sources shows that there is approximately 285MWP5 (DC) of small scale solar PV (rooftop and ground-mounted) installed in South Africa as at December 2017. This figure is calculated using data received from PQRS, SMA inverters (a local distributor of PV inverters), municipalities and Eskom registered installations. The total number of installations equates to approximately 139,556 units. The installed capacity of small to medium scale solar PV installations results in a market share percentage of 0.65% of the total national generation capacity of 44.134GW6. In addition to these grid-based installations, there are 87 150 off-grid systems with a total installed capacity of 14.35MWP. A depiction of the yearly growth from 2003 to 1 December 2017 is represented in Figure 2, where the green bar represents the annual increase in installed capacity. As is evident from Figure 2, installation rates have been accelerating over the last 5 years and this trend that is likely to continue as customer business cases for such installations further improve.

21


Small-scale embedded solar PV by sector and province Figure and Figure respectively illustrate the total installed capacity and number of installations in each sector per province. The highest penetration of installations is in the Gauteng and the Western Cape provinces, predominantly due to a combination of Municipality

significant commercial and industrial sectors in these provinces and enabling policies and feed in tariffs in selected municipalities. The commercial and industrial sectors contribute to 69.8% of the total installed capacity, followed by a 22.5% and 7.7% contributions from the agricultural and residential sectors respectively. Feed-in tariff

City of Cape Town

70.08c/kWh for every kWh exported

Theewaterskloof

48c/kWh for every kWh exported

EThekwini

68c/kWh for every kWh exported

City of Tshwane

10c/kWh for every kWh exported

City Power

36.14c/kWh - 42.79c/kWh for every kWh exported

Nelson Mandela Bay

Net-metering (compensated at import tariff)

Overstrand

65.25c/kWh for every kWh exported

Table 1: Net-Metering schemes used in municipalities

Figure 2: Annual total installed capacity (MWP)

22


CHAPTER 1 The main driver for the installation of solar PV in the commercial and industrial segments is that their electricity demand profile follows a similar profile as the solar PV production profile allowing the generated electricity to be self-consumed without the need for any energy storage. Self- consumption of electricity generated from embedded installations is particularly valuable in South Africa since the feed-in tariffs offered by municipalities are generally lower than applicable electricity retail rates when purchasing electricity from the municipality. Another major factor driving the uptake of embedded solar PV includes the desire for longer term electricity price

certainty particularly for energy intensive users. Such installations are also facilitated via general access to roof space in commercial and industrial parks/buildings. The statistics also show that smallscale embedded solar PV has a valuable contribution to make in the agricultural sector. In light of national electrification targets and the statistics in Figures 3 and 4, it is clear that embedded installations are already making inroads in at least some remote agricultural settings where the cost of service may be prohibitively high for Eskom and municipalities. Small scale on-site generation should therefore be encouraged

Figure 3: Total capacity installed in each sector per province

particularly in these situations where conventional grid-based approaches may not be optimal. The charts above demonstrate that the growth in the small scale market for solar PV

will not necessarily mirror what has so far been observed with utility scale PV projects. As shown in Figure 5, the majority of utility scale solar PV projects in South Africa are based in the Northern Cape primarily due to good solar irradiation resource which is

23


essential for any competitive project under the national Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). This demonstrates that for utility scale projects in South Africa, the most important drivers are the REIPPPP competitive bidding process and auction design that encourages project developers to locate projects where there factors combine for the lowest levelised cost of electricity (i.e. highest solar resource, no grid congestion and low grid connection cost) The customer business case and hence growth of the embedded solar PV market is dependent on a range of factors that are not identical to those under the REIPPPP - these include: distributor retail tariffs, distributor feed-in tariffs, customer load profile, magnitude of the solar irradiation resource, return expectations, green energy aspirations and available land or rooftop area. These markets factors influence the distribution of projects across sub-sectors. In terms of installed capacity, the commercial and industrial sectors clearly dominate the small-scale embedded generation market. Within this subsector, the available statistics as depicted below show that retail, factories, and offices make up the majority of installed capacity.

24

Figure 4: Total number of installations in each sector per province

Figure 5: Geographical distribution of renewable energy projects under the REIPPPP (Bid Windows 1 -4)

Figure 6: Sub-sector analysis by installed capacity for the commercial and industrial sector


CHAPTER 1

Figure 7: Growth in capacity for small to medium scale PV from 2018 to 2025

Growth prospects for small scale embedded solar PV The current drivers for further growth of small scale solar PV are expected to remain at least over the medium term of 5-10 years. With wholesale and retail electricity tariffs not expected to decrease; solar PV technology prices set to continue decreasing; and more distributors offering feed- in tariffs; conditions will support small scale embedded solar PV. This is reflected in the expected growth for the uptake of small to medium scale solar PV for years 2018-2025 as represented in Figure . This figure illustrates that by 2025 there will be an installed capacity for small to medium scale solar PV of 2.33GW7 based on extrapolating current installation trends, increasing customer awareness of embedded generation, and upward cost trajectory of conventional grid based power supply. Conclusion As small-scale embedded generation continues to grow, various stakeholders need to position themselves for a power

supply mix that is more diverse in terms of technology options as well as size of generation units. This re-positioning will require more accurate tracking of small-scale installations to ensure deeper understanding of this market. The aggregated impact of thousands of installations will also eventually become visible to the national power system operator while becoming a major consideration for power system planners. The current efforts to register installation should therefore be viewed as a first step in managing wider effects that are yet to come. Several complementary technologies are also emerging that may further accelerate deployment of small scale solar PV such as batteries. In the future, mandatory information for registrations will need to expand to include not only the PV manufacturer, inverter, and location, but also include details on the use of batteries and any tariff structures applicable or used by the customers using small scale embedded solar PV. This information should be updated on a regular basis â&#x20AC;&#x201C; at least at 6 month intervals and potentially be made publicly available. With this added information in the registry, trends and statistics for solar PV installations will shed light not only on market share, but also on municipal revenue impact, as well as net residual demand that will be further impacted by deployed battery technologies. Ultimately, this allows observation of trends by jurisdiction thereby informing policies to further support or regulate these installations.

25


Could renewables unlock localised, affordable power generation for Africa? By Andrew van Zyl – SRK partner and principal consultant, Chris Dalgliesh – SRK partner and principal environmental consultant, Darryll Kilian – SRK partner and principal environmental scientist, Marius van Huyssteen – SRK associate partner and principal environmental scientist and Wouter Jordaan – SRK partner and principal environmental scientist

The slow pace of developing Africa’s traditional electricity distribution network has, ironically, opened the door for alternative energy generation approaches based on renewable energy sources and technologies— and their success to date suggests huge potential for the future. Rapid evolution of solar and wind power systems—and to some extent hydropower and biomass-based methods—are leading the charge to bring small-scale, local energy supply to areas that are remote, have low population densities or are under-served by national infrastructure. It is no coincidence, for instance, that the cellular phone was developed in Scandinavia, where low population density called for an alternative to the costly option of physical cabling over long distances to reach small markets. The traditional model of large-scale coalbased power generation at centralised points, sending electricity across thousands of kilometres of transmission grid, is proving to be challenging for many African countries. While this model is often very efficient once it is up and running, there are considerable barriers to its establishment in Africa – including high capital expenditure, high interest rates and frequent cost overruns. Burden of interest, returns Even South Africa, with its relatively low interest rates, will often struggle to manage the cost of large industrial projects of this nature—with 10-year lead times between initiation and first revenue earned. Recent experience with maintaining and growing the country’s coal-based generation infrastructure—and the flirtation with the idea of expanding nuclear-based output— have highlighted the financial burdens these options carry.

26


CHAPTER 2

The preference, especially in an environment where government looks to the private sector for partnerships, is rather for quicker and more manageable energy projects that deliver quicker returns—even if the generating efficiency may be lower. Even the logistics of installing renewable energy projects in remote locations, which was an aspect initially considered a major obstacle, have been overcome and have not generally held back the successful roll-out of these options. Indeed, South Africa’s experience—with wind energy particularly—drew global praise in its early days for the way the private-public initiatives had been facilitated by policy. The transition from traditional to renewable sources, however, has its hazards; it can threaten the monopoly and the revenue stream of state-owned utilities. It was South Africa’s energy crisis of 2008 and Eskom’s rolling blackouts that added impetus to the application of renewable alternatives; but as soon as conditions led to a more stable supply environment, Eskom resisted the roll-out of government policy to support renewable schemes.

Conflict of interest This highlighted the potential conflicts of interest that can leave investors in a regulatory no-man’s land, and can severely dampen the enthusiasm of stakeholders with the necessary technology and resources to help governments pursue new energy opportunities. Despite mixed messages from Eskom about the security of national electricity supply, most South African businesses and households have started to assume that future supply is likely to be less, rather than more, reliable—and this has tended to buoy interest in users going ‘off-grid’. While these off-grid alternatives are not always renewables (petrol or diesel generators are a popular choice for offices and homes), it does pose a longer-term concern for local authorities in particular— who have tended to rely on electricity supply for revenue, and for subsidising other government services. The conundrum here is essentially that the state has become accustomed to generating

27


income at local government level by selling electricity to those able—and willing—to pay more, so that other segments of society can receive basic services; this is vital for social cohesion. As supply security falters and electricity prices rise, however, the incentive grows for users to inadvertently exit this arrangement in search of affordability and, particularly, reliability. The challenge for any government is therefore to carefully balance how much of this income stream can be forfeited in the interest of reducing demand pressure. Already, there are signs in South Africa that government is concerned, with the recent publication by the National Energy Regulator (Nersa) of Rules for Registration of Small-Scale Embedded Generation. Registration, it is widely believed, is the first step towards a billing system that will attempt to claw back some of the revenue lost when electricity is generated independently; and the public response is unlikely to be accommodating. Right framework and support What is required, then, is a facilitating framework of policies, laws and regulations that is clear to all and can achieve the delicate balance between providing the necessary affordable energy for economic development—while empowering the state with the resources it needs for sustainable governance. There are already a number of sectors which have been calling out for balanced regulation for electricity generation – where the technology is already in place to make it happen. South Africa’s cement producers are a case in point, where the technology for the use of alternative fuels in their energyintensive cement kilns has already been

28

developed, tested and implemented. In the early 2000s, the cement sector worked with government on a programme to burn used tyres instead of coal, addressing the mounting environmental problem of tyres in landfill; large sums were invested in research and development, leading to the successful take-up of the plan. The failure of the REDISA programme to manage waste tyres and ensure a reliable supply of waste tyres to the industry, however, left the industry vulnerable. The government however introduced in interim plan and is in the process of evaluating new Waste Tyre Management Plans to ensure the effective management of waste tyres, for various uses, including processing in cement kilns. The potential for using agricultural biomass as an alternative fuel also holds great promise, and has already been embraced by many countries in Africa. In the sugar industry, the use of bagasse in generating electricity could render the sector carbonneutral while reducing sulphur dioxide emissions and cutting costs. Approximately 16% of electricity in Mauritius, for example, is generated by power plants at sugar factories using bagasse. Biomass by-products and waste from sugar can even be used to manufacture biofuels and biogas. Other alternative fuels which could be applied to electricity projects to promote resource efficiency are furnace off-gas (waste gas), landfill gas and natural gas; these industrial energy sources are potentially available from existing facilities without the need to change land use or otherwise impact on the biophysical or social landscape. The key lies in well considered and inclusive policies, not just relating to energy but to other relevant areas; in South Africa, this


CHAPTER 2 could include the central issue of land redistribution. Potential exists for small communities to be empowered with both land resources and skills to extract the value inherent in agricultural by-products and organic waste—by marketing these into the power generation sector. Regulation, of course, also needs to keep its eye on the environmental ball—as even renewable project have impacts. These come, for instance, in the form of the sizable land areas that many renewable generation initiatives occupy; usually developed as greenfield projects, they invariably have a range of biodiversity impacts such as shading, vegetation clearance or bird kills, and even social impacts like community displacement or loss of agricultural land. While the technologies for converting alternative fuels to electricity are steadily improving and becoming more affordable, the relatively cheap price of coal in South Africa—as well as the country’s reliance on its mining-based economy—are factors that have slowed the uptake of these types of initiatives as well as the investment they attracted. Indeed, the considerable investment historically sunk into the development and maintenance of coal mines and coal power stations have created some of South Africa’s main economic and social building blocks; so a balanced approach is no doubt required. It is clear, however, that the air pollution and climate change effects attributed to coal-derived electricity will and must continue to drive greater support for enabling policy, legislation and associated programmes from government, regulators and industry in general.

Energy storage: the next frontier The 15 MW hybrid photovoltaic plant at Iamgold’s Essakane gold mine—located 330 km north-east of Burkina Faso‘s capital city, Ouagadougou—is an example of how the mining sector can successfully augment its on-site fossil-fuel power generation with renewable energy. The off-grid gold mine will reduce its oil consumption by six million litres a year, and reduce its CO2 emissions by about 18 500 tonnes. The rapid evolution of energy storage technology, with large-scale batteries increasingly available and affordable, the move to micro-grids and the uptake of hybrid energy solutions in mining is likely to escalate quickly. This solution works well for a large consumer like a mine, allowing for a lengthy off-take agreement to back the required financing of capital and operating expenditure of such a project. For Africa, however, this opportunity needs to reach household level if it is to have a real and lasting impact on social development. The question is: how can localised power generation options—drawing on renewables like solar and wind—be made feasible and affordable to individual, often poorer, households? While technology will provide part of the answer, it will also be necessary to develop new and innovative financial models—based, for instance, on empowering households and communities with a credit rating to raise the necessary finance. Where service providers can leverage the power of household credit, there is greater potential for independent power producers to develop small-scale but affordable solutions.

29


Energy Developments in South Africa By Hemel Bhana

“Energy drives sustainable economic development and growth, and should take its place at the centre of a growing economy as directed by the National Development Plan 2030.“ This quote was made by the new Energy Minister, Hon. Jeff Radebe, during the long-awaited signing of 27 renewable energy projects by independent power producers on 4 April 2018; bringing in R 56 billion of investment to create an additional 2,3GW of power generation capacity. Energy development in South Africa is certainly seeing change, which will continue going forward. This article focusses on five of these, namely: • Integrated Resource Plan • Renewable energy • Demand side management • Carbon tax • Emergence of electric vehicles Integrated Resource Plan (IRP) The IRP is essentially a national electricity plan, setting the long-term investment schedule for electricity generating technologies. At present, investment decisions are based on the 2010 version of the IRP, which assumes far higher demand and materially different technology costs than is currently the case and which has not been updated, despite two separate attempts to do so in 2013 and 2016. As of writing this article, the updated IRP is undergoing a final set of consultations

30


CHAPTER 3 before being published in the government gazette. The energy ministry has seen a number of ministers over the last few years, causing policy uncertainty and fuelling concerns over nuclear energy. It is hoped that with the updated IRP, confidence in the electricity sector and investment in electricity generation technologies will be restored.

scenarios and their impact on the energy mix, costs, environment and jobs:

The CSIR Energy Centre has done extensive work on energy planning; in their response to the draft 2016 IRP they provided the following diagram outlining different

Renewable Energy The two year delay in signing power purchase agreements for the previous round of preferred bidders in the renewable energy

According to their analysis, the least cost scenario, which creates more jobs and less environmental impact, places much more emphasis on renewables (60% from wind and solar) with no increase in nuclear energy.

According to their analysis, the least cost scenario, which creates more jobs and less environmental

impact, placespower much more emphasis on renewables (60% from wind solar) with no Energy increase in independent producers (REIPP) perspective, theand draft National nuclear energy. programme is now behind us. Efficiency Strategy (NEES) was published for comment in 2015 and sets targets If we look at the different bid windows for energy reduction in various sectors. It inRenewable the REIPPEnergy programme, we can see a is hoped that this legislation will also be dramatic decrease the price paidpurchase for solaragreements promulgated soon. The draft strategy sets a The two year delay in signing power for the previous round of preferred bidders the renewable to energy independent producers (REIPP) programme now behind and windintechnologies, the point where power29% energy reduction for theis economy byus. they are 40% cheaper than new baseload 2030, from a 2015 baseline. If we look at the different bid windows in the REIPP programme, we can see a dramatic decrease in coal today.paid for solar and wind technologies, to the point where they are 40% cheaper than new the price The section 12L tax incentive for baseload coal today. Demand Side Management implementing energy efficiency projects, From a demand side management policy whereby a tax rebate is provided at 91

31


cents per kWh saved, has been running for three years now and has been fairly successful with large businesses to help subsidise the costs of implementation. The current programme ends in 2020 so an update should be published soon for public comment. The National Cleaner Production Centre (NCPC) provides extensive training on energy management systems in order for companies to implement the ISO 50001 standard on energy management. There are also a number of national energy efficiency programmes under development using external funders, which will help enable the achievement of the NEES targets. Building on the Private Sector Energy Efficiency Programme which ran from 2013 to 2015, the Department of Energy together with a number of other stakeholders is planning a public sector programme to implement energy efficiency projects in municipalities as well as government owned buildings. This initiative will identify projects and then fund the implementation through various models. Carbon Tax Globally, there are two primary policy instruments being used since at least the last decade to try to drive down carbon emissions; namely a carbon tax and an emissions trading scheme. Countries like the UK, Netherlands and Finland have put in place a carbon tax whilst others like China, states in the USA and the European Union have been using an emissions trading scheme.

The end goal for these policy instruments is to reduce absolute carbon emissions per country, in line with their Nationally Determined Contributions (NDC) submitted to the UNFCCC. In South Africa, government has decided upon a carbon tax as well as a carbon budget approach per sector, and our NDC states that our carbon emissions will by 2025 and 2030 be in a range between 398 and 614 Mt CO2–eq. National Treasury published an updated draft carbon tax bill in December 2017 for public comment. This bill has been delayed many times over the years, the current indication is that it will be passed later this year and come into effect from 1 January 2019. The key design features of the carbon tax include: • • • •

The tax will be phased in over a period of time to allow for smooth transition in adopting cleaner and more efficient technologies and behaviours. The first phase will run from implementation up to 2022. The initial marginal carbon tax rate will be R120 per tonne of CO2e (carbon dioxide equivalent), which will increase at CPI + 2% for the first phase Taking into account the thresholds mentioned below, the effective tax rate is much lower and ranges between R6 and R48 per tonne. To allow businesses to adapt and transition to low carbon alternatives in the first phase a basic percentage based threshold of 60% will apply below which

The section 12L tax incentive for implementing energy efficiency projects, whereby a tax rebate is provided at 91 cents per kWh saved, has been running for three years now and has been fairly successful 32


The two year delay in signing power purchase agreements for the previous round of preferred bidders in the renewable energy independent power producers (REIPP) programme is now behind us.

CHAPTER If we look at the different bid windows in the REIPP programme, we can see3a dramatic decrease in the price paid for solar and wind technologies, to the point where they are 40% cheaper than new baseload coal today.

• • • • • • • •

tax is not payable. The following additional tax-free allowances apply: An additional 10% for process emissions; An additional allowance for trade exposed sectors, to a maximum of 10%; An additional allowance of up to 5% based on performance against emissions intensity benchmarks. These benchmarks will be developed in due course. A carbon offsets allowance of 5 to 10% per cent, depending on sector; And finally, an additional 5% tax-free allowance for companies participating in phase 1 of the carbon budgeting system. The combined effect of all of the above tax-free thresholds will be capped at 95%. Due to the complexity of emissions measurement in the waste and land use sectors, 100% thresholds have been set i.e. these sectors are excluded from the tax base for phase 1. The tax base comprises emissions from fossil fuel combustion, emissions

from industrial process and product use and fugitive emissions. • The greenhouse gases covered include carbon dioxide, methane, nitrous oxide, perfluorocarbons, hydrofluorocarbons and sulphur hexafluoride. • Carbon tax on liquid fuels (petrol and diesel) will be imposed at source, as an addition to the current fuel taxes. • For taxation on stationary emissions, reporting thresholds will be determined by source category as stipulated in the National Environmental Air Quality Act. Only entities with a thermal capacity of around 10MW will be subject to the tax in the first phase. This threshold is in line with the recent DEA GHG emissions reporting regulation requirements and the proposed Department of Energy (DoE) energy management plan reporting. • The carbon tax will be administered by the South African Revenue Service (SARS).

According to a recent report, the global electric vehicle (EV) market reached the 1.2-million sales mark for the first time, with more than 165 models available for sale 33


Recent legislation to enable the carbon tax is the mandatory reporting on greenhouse gas emissions for companies. These policies will increase the regulatory reporting as well as the financial burden put on large companies, thereby forcing more attention on energy efficiency and energy management going forward. Emergence of Electric Vehicles According to a recent report, the global electric vehicle (EV) market reached the 1.2-million sales mark for the first time, with more than 165 models available for sale. China is leading the market with 48% market share followed by Europe with 26%. Solid-state batteries are likely to be the ‘game changer’ of future battery chemistries, as they render 2.5 times higher density than lithium-ion. In the last 6 months, more than 10 automakers have announced future EV launch plans. Based on these announcements, EVs now have a market potential of about 25 million units that will be sold by 2025 (to give an indication, 70 million cars were sold globally in 2016). Vehicle manufacturers are certainly taking electric vehicles seriously. Hybrid and fuel cell vehicles are also in development; this will impact the growth of internal combustion engines using petrol and diesel. In South Africa, the EV trend is still very much in it’s infancy with probably less than 1000 EV’s sold. This trend however cannot be ignored and the impacts of this need to be fully understood. One of our current top 5 exports is vehicles; therefore a significant amount of effort may be required in future to incentivise production of EV’s. Infrastructure such as charging stations across the country is costly but necessary if

34

we want widespread use of EV’s. Furthermore, subsidies or other mechanisms would be required to lower the costs of EV’s to make them affordable. Over time, like with renewables it is envisaged that battery technologies will become cheaper and EV’s can compete with internal combustion engines. Energy development in South Africa is set for exciting times, due to technology change and greater political certainty to drive long term targets. Therefore, it is important for companies to be pro-active by: • Setting a science based target in order to set long term plans to be more efficient whilst growing; • Setting an internal carbon price for decision making and informing the business case on investments; • Ensuring that data gathering processes are robust; • Taking environmental considerations and technology trends into account in the strategy of the business, and not seeing it as a mere reporting function.

References http://www.ee.co.za/article/executivesummary-full-submission-response-csir-doedraft-irp-2016.html http://m.engineeringnews.co.za/article/ high-priority-irp-update-to-be-publishedsoon-2018-04-10/rep_id:4433 https://www.dailymaverick.co.za/ article/2016-10-18-comparative-analysisthe-cost-of-new-power-generation-in-southafrica/#.WvKLBtR96Ko https://www.businesswire.com/news/ home/20180413005568/en/Global-ElectricVehicle-Market-Outlook-2018--


CHAPTER 4

Embedded Energy Solves Our World’s Crises By David Lipschitz

Our (South African) world is beset with a number of crises, eg water, electricity, food, transport, education, unemployment. We lurch from crisis to crisis, but actually all these huge crises are part of a much more fundamental change, called Industry 4.0, and its overarching tipping point as the world changes the way it works, again. Many people want to know why the world isn’t changing. Why does it seem like the poor are getting poorer? Why is the “ginicoefficient” getting worse? Actually the world is changing dramatically and rapidly. It’s just that the change is “hidden”. The change is happening bottom up, not top down. The masses (the crowd) are changing the way we work and the way that we interact with our governments, which are the kingdoms of the 20th Century. For the past 500 years, the “enclosure movement” (EM) has enclosed the “commons”, the things that everyone owned and had, even peasants living on the land. A peasant might have been poor, but there is a fundamental difference between poor and destitute. A poor person lives apart from the centralised “grids”, possibly making their own electricity (with a generator, which could be PV powered), collecting and storing water, making food, building their own houses, etc. But the marketing by the EM’s has led to the average person struggling across a desert to find water and then finding that the water is salty. The Israelites left Egypt and got to the Bitter Lakes. But the lakes weren’t bitter. The people were bitter, as they had to make everything themselves, whereas before, whilst they were slaves, they made stuff

35


for their boss, the king, the pharaoh, but in return the king gave them food and shelter and paid them. They were destitute. I am trying to become “poor”, to live (with my community) in a way where we aren’t dependent on the “outside” and on outsiders. For the first time in history, it is easy to make decentralised energy (electricity) and to harness the abundance that the earth offers. What is happening is that major paradigms are shifting. The age of human robots is being taken over by the age of computer robots. For example, the mindlessly repetitive task that millions of people do / did like putting a screw into a piece of wood or making cars by hand or making hot water for the king (see “The King and the Peasant Story”, done as a Mind Map, available on Slideshare at https://www.slideshare.net/ DavidLipschitz1/the-king-and-the-peasant or email me for a PDF), are being taken over by computers. My quick definition of a computer is “a machine that can do any (almost) repetitive task”. I insert almost, as a “simple” task that we can do like crossing the road, or picking up a cup (full or empty) is currently difficult for a computer to do. But things that humans are good at like summarising a book or finding information or translation, are now being taken over by

36

computers. The Babel Fish is almost real. One hundred years ago, it took hundreds of people to make hot water for a king. There were the forestry people, the wood choppers, the haulers, the fire makers, the water collectors, the boiler makers, the hot and cold water transporters, and the people to take the waste water away. Today one opens a tap and hot and cold water is automatically mixed at the right temperature and one has a shower, whether one is a king in a castle, or a peasant in a hut. And the electricity “robot” does most of the work, whilst the water from a dam or water container is piped and pumped into my hot water cylinder, automatically heated, and transported to my shower head. A “poor” smart phone user has access to more information and training than the president of the United States had only 18 years ago! And for free. The smart phone has $900,000 (http://www.diamandis.com/ blog/demonetized-cost-of-living) worth of technology installed on it free of charge, and we want more. Wanting more is natural, but not understanding where we have come from and where we are going is ignorance. “We” are narrow minded and apathetic. We think we can change the world by liking


CHAPTER 4 My calculations show that South Africa should have 160 GW of electricity and currently it has 40 GW things on Facebook and filling in surveys. There is so much more than can and needs to be done. I have ideas for solving the crises and showing how taxi drivers and petrol attendants can make money out of losing their jobs as self-driving cars and electric vehicles take over. But the fossil fuel industry has fossilised our thinking and there is a drought in our minds. We need people to make the truly big decisions that need to be made so that we can all live freely together in the world that is coming, not the world that has been. For 20 years I have been living my new retirement paradigm. It involves me dramatically and fundamentally reducing my cost of living, not just for myself, but especially for planet earth. And more and more people are taking this to heart and realising that our biggest cost is our external cost on our environment and that spending R500,000 on making one’s own water and electricity and food is far better than buying that fancy car. And soon that R500,000 cost will be R50,000 and then close to free. But we are brainwashed (the “nice” word is socialised) into thinking that we need fancy gadgets and holidays and cruises and cars and watches, and I look at people who spend R200,000 on an annual cruise and holiday and then complain when they get a quote to clean their well water for R200,000.

Slowly the world will change, and slowly we will realise the folly of us externalising our costs onto an environment that actually loves us unconditionally and gives us abundance. My dream is not separation and independence. It is interdependence. My dream is an Eskom which owns the Grid and that allows anyone to interact with it. My calculations show that South Africa should have 160 GW of electricity and currently it has 40 GW. Eskom cannot catch up, and every day that its existing power station build is incomplete, is another day that millions remain unemployable. Each of its power station managers becomes a CEO of his power station. Each of us business owners becomes a CEO of our power station (hence why I called my company and my life’s methodology “My Power Station”). Sometimes we can produce everything we need, but actually our goal is to share, for the common good, and the commons, so that sometimes I am a producer and sometimes I am a consumer. I become the prosumer of tomorrow, today. Some people know how to make electricity. Others water. Others food. Within food, some know how to grow chillis and others melons or pumpkins. Some know how to grow chickens and make beautiful eggs. And this cross pollination of people in smart-grids will create the beautiful habitat that I dream of. I know that I am an idealist, but I also know that the only thing that has changed

My dream is not separation and independence. It is interdependence. My dream is an Eskom which owns the Grid and that allows anyone to interact with it 37


the world is an ideal, that seems absurd until it becomes real. The gini-coefficient getting worse, is not necessarily a bad thing. As we get more and more free water and electricity and food and transport and housing, we get to a point where one doesn’t have to “earn” a living. Someone, probably a capitalist, who helped bring the marginal cost of goods down to zero, made some money along the way, and looks “rich”, but me as a “poor” person actually has almost free access to all these resources. I can print things I need, either with my own 3-D printer, our I can design a product, or use the “crowd” to design the product, then use another crowd to print the product, and I can have a one of a kind hammer

38

that does exactly what I need. My “Rolls Royce” hammer, made specifically for my uniquely shaped hand and body. Our world of embedded electricity and embedded water and embedded food is giving the many an opportunity that few have had in history. We will run our own lives. We will live our own lives. In Cape Town, Ratanga Junction should not close, because in a few years time shopping centres and supermarkets and jobs will be out of date and people will have so much truly “free” time to spend living and enjoying their lives. David Lipschitz, Thought Leader and Trouble Shooter. Note that I use the xe pronoun for he and her, his and hers.


CHAPTER 5

The science of climate change By Prof Ernst Uken, Energy Consultant, ernstuken@gmail.com Author of: ‘Essential Interplay of Technology and Culture’

It may surprise you that ‘renewable energy’ is not a synonym for ‘sustainable energy’ but rather a part of it. A simple definition of sustainable energy is that it is a clean system, which satisfies the needs of the present generation without affecting the future generation adversely. In a developing country, it is important to realise that sustainable development covers the following interrelated aspects: ecology, economics, politics and culture. Renewable energy, on the other hand, is renewed naturally within a relatively short space of time, such as solar energy (photovoltaic generation and thermal heating); wind power (windmills and wind turbines); hydropower (still the cheapest if available); wave power (very expensive); bio-energy (limited application); and geothermal (not found in southern Africa but in East Africa). Choice of power According to Demand Side Management (DSM), the cheapest source of energy is not to use it at all. Switching off all the electricity you do not use will not only reduce your electricity bill but also help to extend the availability of this valuable resource at a national level. A case-in-point is the use of domestic hot water cylinders, commonly called geysers in South Africa. Why do some installers still set the control temperature of a geyser at 70oC, when humans can only tolerate a shower below 41oC? To make matters worse, geysers often remain switched on continuously, instead of just for the time when hot water is required. Luckily, Eskom is implementing a strategy where geyser temperatures are kept at 55oC to ensure that warm-water-liking bacteria are kept in check at the prescribed temperature.

39


South Africa’s estimated coal reserves will last almost twice as long as the global coal reserves The science of climate change Being part of nature, climate change is subject to worldwide natural cyclic changes with or without humans. As part of nature, the growth of the human population since about 1850 and the expected influence of rapid growth of adverse climatic influences like CO2 trapped in the atmosphere, show a perfect golf-stick correlation even up to 2050. Journalists and politicians did an incredible job in creating a global awareness of the possible environmental threats facing us, but seem to overlook the threatening cause of ever-increasing populations. Over 70 nations signed the Paris Accord ensuring that governments will do their best to curb the rising temperature below 2oC within half a century or so. Can we blame President Donald Trump for asking to be given hard facts before signing this agreement? He obviously did not want to follow his predecessor, who signed this agreement, whilst also signing more environmentally-damaging oil sales contracts than any politician of his time.

hole over Africa when far more motor vehicles were registered in the Americas and Europe?”

Trump should be forgiven, since the terrible acid rain, which I experienced in Germany in the 70s, was said to be due to oxides of sulphur and nitrogen released from burning coal and petroleum fuels. Motor vehicles were blamed until botanists eventually explained that these trees were actually diseased.

Based on the claims by Heartland: • Climatologists are terrible at predicting temperatures. • Predictions of extreme weather events and sea level rises have failed to be true. • Models cannot account for inexplicable deviations/cooling periods • It is not clear whether the widely used data is accurate—Only data that fits a particular model is used, but the major predictor for weather [water vapour] is being disregarded. • A slightly warmer climate may be

A decade later, I was shaken by further alleged damaging effects of cars possibly causing the ozone hole. By 1996, CFC aerosols were phased out. But my naïve question remained: “Why was the largest

40

To this day, no convincing answer has been found, in spite of the Brewer-Dobson Prevailing Stratospheric wind patterns. Another interesting fact is that a meteorite apparently struck earth some 300 years ago and peeled the earth entirely of its protective ozone layer. It recovered entirely on its own within a few years. A lesson to be learnt Scientists usually follow the rule of cause and effect but we should be warned of blind projections into the future, based on shaky evidence like: Why is it assumed that the entire globe is affected only by the Arctic—where ice is melting—and the much closer Antarctic—where more snow is piling up annually, preventing ships from reaching their previous destinations—is completely disregarded?


CHAPTER 5 • •

advantageous to certain regions— think of our vegetation, crops, tourism, etc. Scientists will develop competitive cheap, clean energy anyhow. Choice of energy sources

South Africa is blessed to be ableto choose from a range of possible energy sources to be utilised on a local or regional basis. Let us not listen to politicians and journalists, specialising in global warming. Energy decisions by themselves are dangerous without doing a proper economically-sound costing exercise before attempting projections into the future. Capital outlay, longterm running and maintenance costs, and labour need to be included before comparisons can be made. A colleague in Kenya once remarked that most African languages do not have a word for ‘maintenance’. So, ensure that imported rules and policies concerning advanced technical fields (like nuclear) are observed.

Our municipalities are frequently guilty of poor maintenance. Coal South Africa’s estimated coal reserves will last almost twice as long as the global coal reserves. Thus, what should this developing country do? Some environmentalists say that coal should remain in the ground; uninformed economists say that it could be exported to Japan or China as raw material for a ‘quick buck’; but forward-thinking engineers say: “Let us rather clean up our processes and manufacture electricity or other products like fuel, from coal.” Let us see what and when other competitive options of power generation become viable in South Africa. We should remember that our government cannot spend large sums of money to subsidise renewable energy, like most overseas countries have done. We have a coal-based economy. At this stage, over 90% of South Africa’s electricity (ie. over 40 000 MW) is still produced from coal.

41


According to the Paris Accord, which South Africa signed, the plans are to significantly reduce our carbon footprint, favouring other primary sources of energy. The updated IRP 2016 report promotes cleaner sources of energy, possibly also allowing fracking to stimulate our gas industry. Nuclear power As a Nuclear Scientist, I was biased towards the environmentally-clean, relatively cheap-to-run, technology, especially since we can mine Uranium (and could enrich it) in South Africa. But governments have been ‘dilly-dallying’ for so long that we can probably no longer afford it. Although nuclear has a good safety record without a mishap in France—with 66 nuclear plants—and in South Africa, the fear of a

42

natural disaster as in Japan, persists. Russia experienced the Chernobyl disaster, because of political interference. We must guard against attempting to run nuclear plants by incompetent, politically-favoured individuals. Germany made the mistake to phase out nuclear power too suddenly. The drive to sustainable energy cost them much more than anticipated. Areas that were normally fed with electricity now became generators of seasonal wind power and so forth. To solve their problems, industry now has to spend billions of Euros to restructure their distribution infrastructure. Renewable energy The Renewable Energy Independent Power Producers’ Programme’s target for wind power was 1850MW and PV solar,


CHAPTER 5

South Africa is blessed to be able to choose from a range of possible energy sources to be utilised on a local or regional basis 1450MW. At present, only 600MW windbased and 1000MW PV solar are fed into Eskom’s national grid, which could by 2020 rise to 6900MW and 6694MW respectively, or just over 10% of the grid. Stakeholders need to ask the following relevant questions: • Why is my source viable? • When is it viable? • Where is it competitive? • How viable is it now? • How sustainable will it be in future? Of particular interest to us should be the ‘thermal solar plants’ near Pofadder (100MW) and Upington in the Northern Cape, where these new but still more

expensive plants with parabolic mirrors use solar-heated salt to drive turbines—even for a few hours after the sun has set. This gives the thermal solar plants the unique advantage over other renewable energy sources, to generate electricity even after its primary source (the sun in this case) is no longer available. Although sustainable energy has become a buzzword, it is not scientifically advisable to blindly follow the whims of environmentalists, politicians and journalists. Energy decisions and policies are often meaningless if not based on defensible, accountable economic facts. The worst case scenario is a projection based on questionable basic data.

43


South Africa falling behind with digital transformation By PwC case study

Industry 4.0 is transforming manufacturing rapidly and digital transformation has been on many CXO’s agenda for a number of years. Despite this, only a small group of companies is in a position to gain real competitive advantage from this operations revolution. In PwC’s Strategy& Global Digital Operations Study 2018 only 10% of global manufacturing companies are dubbed as ‘Digital Champions’, while almost two-thirds have barely or not yet begun the digital journey. For its report, Digital Champions: How industry leaders build integrated operations ecosystems to deliver end-to-end customer solutions, PwC’s consulting capability, Strategy&, surveyed 1,155 executives at global manufacturing companies in 26 countries including South Africa and asked them about their views on Industry 4.0 and digital operations. Based on the outcomes, PwC developed a digital maturity index to explore the role of frontrunners – the so-called ‘Digital Champions” – and what distinguishes them to outpace their competitors. Pieter Theron, PwC partner advisory services and head of Industry 4.0 South Africa, says: “Digital Champions, are noteworthy because they view digitisation in ways that are far-reaching and aggressively innovative, well beyond automation and networking. It is disappointing to note that none of the manufacturing companies we surveyed in South Africa are Digital Champions and

44


CHAPTER 6 EMEA companies only expect their investments in new technologies and digital ecosystems to result in 12.7% growth in digital revenue over the next five years, compared to 16.6% growth among Asian companies most fall into the Digital Novice category (the least digitally mature companies in the report).” From a regional perspective, Asia Pacific (APAC) are the most advanced with 19 percent of them from that region in the Digital Champion category. These companies are championing the digitisation and end-to-end integration of their operations, introducing digital products and services and connecting new technologies across their organisations at a much faster rate than their peers in the Americas (11%) and EMEA regions (5%). Already today, Digital Champions are deriving more than 50% of their revenue from digital or related services instead of traditional products. Because of the number of Digital Champions, Asia-Pacific companies expect 17% growth in digital revenue over the next five years, compared with the 13% growth anticipated by EMEA companies. That gap is expected to continue to widen, as 32% of Asian companies plan to have established mature digital ecosystems in the next five years, compared with 15% in EMEA and 24% in the Americas. “This is not good news to South African manufacturers as it will result in a growing competitive gap that will become increasingly difficult to bridge,” Theron adds. Key findings of the report •Consumer goods (6%), Industrial manufacturing (6%) and Process industries (6%) are lagging significantly behind Automotive (20%) and Electronics (14%) who have the largest share of Digital

Champions. There are no Digital Champions among the South African companies that participated in the survey. •The bulk of global manufacturing companies are applying new technologies to their operations in an experimental way instead of a coordinated strategic effort to increase revenue and reduce costs. •Two-thirds of companies don’t have a clear digital vision and strategy to support digital transformation and culture and in South Africa digital transformation is conservative and sporadic. South Africa lagging behind on path towards digitisation Digitisation will lead to an increase in production in mature markets, as it reduces operation costs and enables companies to rely less on labour arbitrage. However, companies in the EMEA region (including South Africa) mostly don’t get beyond a medium level of supply chain integration and are often lacking high automation and connectivity in their manufacturing operations. Compared to their Asia Pacific counterparts, EMEA companies also more often fail to connect their strategic, operational, technological and people-related capabilities, and less often incorporate partners in their business models to create customer value. Consequently and while already being behind, EMEA companies only expect their investments in new technologies and digital ecosystems to result in 12.7% growth in digital revenue over the next five years, compared to 16.6% growth among Asian companies.

45


Theron comments: “Although the growth expectation for South African companies are similar than two years ago when we first did the survey, South African companies often do not have the advantage of setting up robust digital operations from essentially a blank slate in terms of factory automation, workforce, and even organisational IT networks as a whole due to numerous complex legacy systems and facilities to upgrade, integrate, or discard. Additionally, Asian companies appear to be keener to try new business models and develop innovative products and services. We require a radical new approach to digital transformation in South African manufacturers.” South African Companies should learn from other industries Two-thirds of global manufacturing companies have barely or not yet begun the digitisation of their operations and especially in Process industries, Consumer goods and In dustrial manufacturing (where most of the surveyed South African companies operate) only a few companies have emerged as Digital Champions. Industrial equipment companies are already more advanced, but Automotive (20% Digital Champions) and Electronics (14%) are clearly the most digitally mature. Theron adds: “One of the reasons why automotive and electronics companies are surpassing other industry competitors is because operations in auto companies have been optimised, automated and connected for decades, while electronics manufacturers have been at the forefront of outsourced manufacturing, which requires connecting and managing disparate systems and partners across an extended value chain. In South Africa we need to challenge popular

64 46

belief and learn from other industries and Digital Champions.” South Africa is missing cost savings by connecting essential technologies New technologies are implemented across the board, but only Digital Champions are able to leverage these technologies to truly connect and collaborate along the end-to-end value chain. They take a holistic approach, connecting essential technologies across the organisation and with strategic partners instead of isolated implementations like many companies in South Africa. As a result, they expect to achieve high cost savings and efficiency gains from technology implementations: 16% anticipated cost savings in the next five years versus 10% for Digital Novices. At least 90% of Digital Champions have already implemented, piloted or planned some of the most current technologies, like IoT (97%) and advanced robotics or AI (90%). Starkly different, only about one-third of Digital Novices have adopted the most common operational technologies, like predictive maintenance (39%) and integrated supply chain planning (32%). People at the center of digital transformation Two-thirds of the survey respondents said they don’t have a clear digital vision and strategy to support digital transformation and culture, and only 27% believe their employees have the required qualifications to master the digital future. On the other hand, more than 70% of the Digital Champions say their leaders express a clear vision for the future and serve as role models for digital change in their organisations. Consequently, Digital Champions invest heavily in people


CHAPTER 6 development and training and cultivate multi-disciplinary teams to foster innovation across functional boundaries. Jorge Camarate, Strategy& partner comments: “The people ecosystem enables and supports the efforts of a company’s strategic direction, solutions, performance and operations, thereby influencing its evolution. To make this transformation, Digital Champions assess the status quo of their workforce; advance the best and brightest and most digitally-oriented existing talent whole training others to also achieve this category, and inject new talent into the organisation where gaps on people’s skill sets and capabilities are revealed.”

Two-thirds of the survey respondents said they don’t have a clear digital vision and strategy to support digital transformation and culture, and only 27% believe their employees have the required qualifications to master the digital future

47


African oil and gas companies need to remain competitive By Derek Boulware, PwC Africa Energy Advisory Team Leader

Africaâ&#x20AC;&#x2122;s oil and gas industry continues to face market challenges arising from the low oil price, competition for revenue growth and local talent together with new expectations from investors and regulators Africaâ&#x20AC;&#x2122;s share of global oil production has continued its downward trend compared to past years, dropping sharply, and moving from 9.1% of global output last year to 8.6% in 2017. At the end of 2016, Africa is reported to have had proven natural gas reserves of 503.3 trillion cubic feet (Tcf). This marks an increase of around 1% in total gas reserves on the continent. About 90% of African gas production continues to come from Algeria, Nigeria, Egypt and Libya however, the overall quantity produced in 2016 reduced by 1.1% down to 208.3 billion cubic metres of natural gas (bcm) when compared to 2015. Because of the decrease in production and some additional discoveries, we have seen the years of available natural gas production go up from 66.4 to 68.4. As industry activity continues to decline globally, industry participants are focusing investment on a very few select projects. Cost cutbacks continue, and exploration activity is at a historic low despite lower costs associated with rig day rates. Although there have been a few discoveries in offshore Africa over the last year, most of those prospects have been in the pipeline for some time. The focus on the continent tends to be quite wide at the moment. Players are going

48


CHAPTER 7 The use of drones was cited by 4% of respondents, indicating that the growth in use of technology highlights its significant potential for the industry where the geology looks promising and where the fiscal terms are most attractive. While we are seeing a reduction in upstream activity across the board, midstream and downstream activities are picking up pace. There are several countries or regions looking at opportunities to develop storage or transport facilities in order to take advantage of market needs. In addition, independent power producers (IPPs) are regularly eyeing African markets for entry opportunities. Many of them offer gas-fired power solutions. This aligns with the expected overall growth agenda for a lower carbon future as gas is expected to be used as a bridging fuel as we move to more renewable alternatives. Despite current market challenges, Africa continues to offer abundant opportunities to explore for hydrocarbons in frontier markets. New hydrocarbon provinces are popping up regularly; Mauritania and Senegal are good examples of countries where hydrocarbons have recently been discovered. PwC recently published its annual Oil

and Gas Review, Learning to Leapfrog. The review factors in the views of oil and gas participants operating in Africa and includes the experiences of international oil companies, national oil companies, oilfield service companies, independent oil companies and other industry stakeholders, to shed light on the key challenges and opportunities facing the sector. In this edition, we consider events that have taken place in the past year within burgeoning and established hydrocarbon provinces throughout the continent. We believe the time is opportune for oil and gas companies to take up and utilise advances in technology and innovation as an enabler in meeting some of the challenges faced. Instead of playing catch up to the rest of the world, the industry should be â&#x20AC;&#x2DC;learning to leapfrogâ&#x20AC;&#x2122; so that they are not only ahead of disruption â&#x20AC;&#x201C;they actually cause it. The sustained lower price of oil has largely been accepted as the new normal, and companies are putting plans in place to

49


enable a more agile response to commodity price fluctuations in the future. For some, this means a diversification of portfolios, with many considering moves to an energy mix that includes some form of renewables. The challenges in Africa’s oil and gas industry The top challenges in the oil and gas industry have remained similar to those in previous years with uncertain regulatory frameworks, corruption, and tax requirements remaining in the top six for the past four years. It is notable that financing costs and foreign currency volatility have both become more critical challenges since 2015 when they were ranked 11th and 10th respectively. While not surprising, it is disheartening that governments and regulators are still not taking up the plea from oil and gas companies to do something about ensuring certainty to players who are looking to invest in hydrocarbon plays in various African countries. Likely, it’s mainly due to the political nature of such a challenge. No one person or entity has direct control over regulatory frameworks, and many of the stakeholders don’t realise or appreciate how important they are in creating an attractive investment environment for potential entrants. Corruption moved up slightly on the agenda this year, moving from third place to second place, with numerous instances occurring across the continent. It is notable that companies are prioritising and spending money on the prevention of fraud and corruption. More ethics training has been introduced for senior management both locally and globally to encourage companies to be legally compliant in all countries in

50

which they operate. Another indication of attempts to drive change is that the Extractive Industries Transparency Initiative (EITI), which promotes transparency, good governance and accountability in the use of oil, gas and mining resources, has more African country participants by number and percentage than the rest of the world. African governments are aiming to become more compliant, primarily so that they can attract more foreign investment. In addition to these and other challenges facing the industry, we continue to see organisations focus on cost cutting. Players continue to be more discerning in choosing the projects they wish to take forward, and operational excellence continues to factor high on the business agenda. Are companies in Africa’s oil and gas industry fit for growth? Oil and gas companies cited “too little investment in developing capabilities” as the most significant impediment to business growth. Weak strategy and leadership followed this. PwC’s Fit for Growth approach requires leaders to clearly pin down their identity and develop a capability-driven strategy that is clearly articulated and communicated among staff. This will need to not only address what the companies should be doing, but also needs to define what the company should stop doing to make sure it does not spread itself too thinly and focuses on differentiating value proposition in the market. Achieving sustainability The need to strategically assess whether the portfolio of activities oil and gas companies in Africa pursue, in order to be sustainable in the drive towards a low-carbon environment, is necessary. Low carbon is an agenda that has been building for some time, brought


CHAPTER 7 Despite current market challenges, Africa continues to offer abundant opportunities to explore for hydrocarbons in frontier markets to a peak of global alignment on the issue with the COP21 Paris Agreement in which nations agreed to reducing carbon emissions in order to limit the rise in temperatures to “well below” 2ºC. This agenda continues to be a global focal point. Growing decarbonisation is therefore a medium-tolong term challenge that will continue to have significant implications for the sector. The review results indicate that mergers and acquisitions (M&A) and partnerships are key to delivering the intended and repositioned strategies and growth. The survey results support our view that partnerships are key to delivering the intended and repositioned strategies and growth. The majority of respondents referred to a partnership proposition with nearly 60% having both been approached or approaching another entity for partnership. Technology While some oil and gas companies continue to explore opportunities for cost reduction and improved efficiency in the low oil price environment, consideration is now being given to how they will stay ahead of the competition. Given the perception of slow uptake of digital solutions in oil and gas, it is surprising to note that nearly a quarter of respondents stated that they had implemented some form of digital solution, from production and drilling to mobile solutions. More technical innovations relating to operational process and efficiency, as well as other technology-based innovations were also cited. The use of drones was cited by 4% of respondents, indicating that the

growth in use of technology highlights its significant potential for the industry. The survey results indicate the application of digital, which is an important step in achieving sustainable operational efficiency. With lower oil prices likely to continue in the near future, digital technologies connecting equipment and field operations through the Internet of Things (IoT), the tasks of automating processes and access to data, as well as helping with cost-cutting, will be essential if the industry is to improve productivity while curbing costs. Oil and gas in Africa continues to be one of the burgeoning and frontier plays for the industry. It is riddled with complex challenges and adversity, but with challenge comes opportunity. The opportunity is there for players who are willing to “reimagine the possible” in a future that looks very different to our present. The outlook should include a strategy that is dynamic and fluid to market and situational changes. While portfolios should be diversified, African oil and gas companies need to “learn to leapfrog” to remain competitive in the new energy future. While there are some challenges that can be “leapfrogged”, others will continue to plague the industry. In addition to being disruptors, oil and gas companies in Africa need to carefully consider strategic partnerships. This strategy will work hand-in-hand with portfolio diversification as it leads to risk diversification.

51


Gender Mainstreaming in the Energy Sector By: Valerie Geen

The energy sector has become increasingly pivotal to socioeconomic growth and development and promoting environmental sustainability, especially as it moves to more cleaner technologies and resource efficiency. It is a primary conduit to the major infrastructural development required to unlock Africaâ&#x20AC;&#x2122;s economic growth potential. It is also the transmission line to accessing the connectivity required for business and other communication as well as access to goods and services for the digital economy, a crucial part of the fourth industrial revolution This heightened importance of the energy sector is further underscored by the fact that 13% of the global population still lacks access to modern electricity, 3 billion people still rely on wood, coal, charcoal or animal waste for cooking and heating and energy is the dominant contributor to climate change with cooking and heating accounting for around 60 percent of total global greenhouse emissions. The participation of women in the energy sector While there is a broader case to be made for gender equality in all spheres and levels of society and the economy, the Energy sector in particular is perceived to be a male dominated sector and for as long as this status quo persists, women who represent at least half of the global population are likely to be excluded from active and meaningful participation in a rapidly changing economy. Such exclusion can only further perpetuate levels of inequality, poverty and unemployment. The World Economic Forumâ&#x20AC;&#x2122;s 2017 Gender Gap report collated from 144 countries

52


CHAPTER 8 An interesting finding from the report was that the first choice of enabler for women advancement is a “supportive organizational culture” concludes that a 58% gender gap remains between men and women in terms of economic participation and a further 23% gap remains in terms of political empowerment. 2 In addition the report argues that based on current trends the global gender gap will only be closed in 100 years. Clearly such a time lag does not address the urgency of the time horizons to demonstrate progress against the 2030 Sustainable Development Goals, the global climate change commitments or the rapidly changing economic and industrial context. While the Gender Gap report reflects a global picture, it does also reference regional nuances of progress. Beyond economic participation and political empowerment, It assists in locating the global challenge for gender equality in the spheres of health and educational attainment. However, it is still necessary to localize these findings within the developing context of South Africa and with special focus on the participation of women in industry more broadly and within the energy sector more specifically. To this end, it is important to define what is meant by Gender Mainstreaming. “It is a globally used approach for promoting gender equality within programmes and projects. It implicates ensuring that a gender-sensitive perspective is central to all activities, policy development, research, advocacy and dialogue, legislation, resource allocation, planning, implementation, monitoring and evaluation of policies and programmes. Gender mainstreaming is not an objective per se, but rather a tool to assess the different implications of planned legislation, policies, programmes for women

and men. It ensures that all men and women benefit equally from the outcomes.” 3 In the context of this article, the roll out of Sustainable energy needs to consider enabling the inclusion and participation of women in all aspects of the energy value chain, be it at the level of decision making and project design processes, ownership, skills development and employment opportunities or the benefits and considerations for sustainable energy consumption by women. The value chain must also acknowledge for example, the different needs and interventions required for small and micro Independent Power Producers (IPP) in a rural village vis a vis the opportunities for women to compete as big project developers and business owners in the IPP space. The gender perspectives in such an environment may be considerably different from the role and perceptions of women donning their hard hats and boots among male dominated energy management teams in large corporations. As technology continues to evolve and we see the introduction of 4th industrial technologies, we need to anticipate that traditional jobs will change and current stereotypes around “men’s work” and “women’s work” will change over time too. Where to start the introduction of Gender Mainstreaming? The National Development Plan (NDP) gives particular direction to the inclusion of Gender equality by proposing amongst others that: • Public employment should be expanded to provide work for the unemployed, with a specific focus on youth and women.

53


• The transformation of the economy should involve the active participation and empowerment of women. • The role of women as leaders in all sectors of society should be actively supported. • Social, cultural, religious and educational barriers to women entering the job market should be addressed. • Concrete measures should be put in place and the results should be evaluated over time. P.43 In order to give effect to the NDP vision, one of the the activities which would need to be prioritized is the collection of disaggregated quantitative and qualitative data of the participation of women in the energy sector. The assumptions that women are ready and willing to work in this sector need to be tested alongside of why they may not be attracted to the industry in the first place and if they are attracted, what measures are required to retain and advance their participation? The table below produced by STATS SA gives one perspective of the gender occupational breakdown across various sectors. While it assists in illustrating which sectors are dominated by women and reflects the disparities, it does not assist in providing the data necessary to determine the participation of women in energy related occupations. Accepting that that the Energy Sector exists in and of itself and is also integrated into various economic sectors and subsectors, more comprehensive and targeted data would be useful to inform appropriate interventions to promote the active pursuit and participation of women in careers within the energy sector.

54

The Business Case for promoting Gender Mainstreaming in the Energy Sector Gender equality as a sustainable development goal is advocated as a human right. Yet, this is unlikely to be the main selling point to persuade the private sector as to why they should invest in the advancement of women in the workplace, particularly if jobs are stereotyped as men’s jobs because they require more physical prowess or are considered more hazardous or cannot afford the absence of their workforce when they take time off to have children. Apart from using a business case lens, the role of women in any workplace requires a societal and attitudinal shift that acknowledges the rights of gender equality within the context of gender and cultural diversity. It requires a new socialization within families and schools and the recognition of the changing nature of family structures many of which require women to work if they are the breadwinners, choose to be career women or require two incomes. For as long as the private sector is driven by a profit motive, it is useful to present a business case argument. A primary tenet on which successful businesses are based is their human capital and if half the world is comprised of women, they are inevitably part of that human capital. As part of EY’s” Women Fast Forward” programme which is trying to beat the clock of waiting another 100 years to reach the goals of gender equality, EY has through a poll of 400 leaders from companies around the world, established that there is more common ground between men and women in their perceptions regarding women’s potential and the enablers and obstacles to


CHAPTER 8 A primary tenet on which successful businesses are based is their human capital and if half the world is comprised of women, they are inevitably part of that human capital women’s success in the workplace. 5 An interesting finding from the report was that the first choice of enabler for women advancement is a “supportive organizational culture”. Men listed unconscious bias (26%) as the top barrier they have witnessed affecting women’s acceleration, with lack of support from male leaders (24%) a close second. This may mean that men are even more aware than previously appreciated of how an inhospitable corporate culture affects the women working around them. (P.6) The table below illustrates some of the indicators that promoted a more supportive organizational culture for the acceleration of women which acknowledges gender equality with a view to the inclusion of women rather than the exclusion of men. It is interesting to note for example that implementing flexibile working hours for men can be advantageous to women when it comes to sharing tasks of family responsibility. More importantly, it is good to note that high performing companies were able to also demonstrate more successful businesses through a range of measures they have put in place to accelerate the participation and equality of women in the workplace. In South Africa, there has been a great deal of focus on women in relation to issues such as gender violence, sexual harassment and

other abuses. These issues are not to be underplayed but should not take attention away from other forms of gender inequality which perpetuate other forms of abuse such as exclusion, poverty and unemployment. As we chart new territories of economic growth and development through developing the sustainable market and move towards all the technologies that constitute the Fourth Industrial revolution, women and girls need to be part of the conversation and the pipeline towards promoting inclusive industrial and socioeconomic development.

Sources https://www.un.org/ sustainabledevelopment/energy/ https://www.weforum.org/reports/theglobal-gender-gap-report-2017 https://gendercc.net/fileadmin/inhalte/ dokumente/8_Resources/Publications/ Guidebook https://www.gov.za/sites/default/files/NDP2030-Our-future-make-it-work_r.pdf https://www.ey.com/Publication/ vwLUAssets/ey-women-fast-forwardthought-leadership/$FILE/ey-women-fastforward-thought-leadership.pdf https://www.unido.org/sites/default/ files/2015-01/Guide_on_Gender_ Mainstreaming_ECC_0.pdf

Apart from using a business case lens, the role of women in any workplace requires a societal and attitudinal shift that acknowledges the rights of gender equality within the context of gender and cultural diversity 55


Turning community trash into Treasure By: Gift Lubele

By now you have probably heard someone speak about recycling, few seconds after three green circular arrows following each other came to mind, and maybe you thought of how dull recycling is, is it even worth the effort and more importantly you asked what difference do you make when you put that plastic bag into a bin rather than throwing it at the corner of some street. I firmly believe that all great things are a results of a small things brought together, so no matter how small of a step you take in recycling, rest assure that your little step contributes towards a much bigger footprint. Before we go further, letâ&#x20AC;&#x2122;s firstly understand that recycling is not only the process of converting waste materials into new materials and objects, it also includes services such as reusing, reclaiming and reprocessing. As an entrepreneur who runs a recycling company, Iâ&#x20AC;&#x2122;ve had the opportunity to hear some of the most shocking perceptions about recycling that still exist in our communities, these views contribute significantly towards the increase of community waste. More than half of the entire street of 18 households in a township

56 68


CHAPTER 9

where I lived believed that throwing trash on the corner is the same as throwing it in the bin because someone will pick it up. This is sad because according to the National Waste Information Baseline (NWIB), South Africa generated approximately 108 million tonnes of waste in 2011, consisting of 59 million tonnes of general waste; 48 million tonnes of unclassified waste and 1 million tonnes of hazardous waste. My biggest mistake was not explaining to them that these statistics has a direct impact on us. An increase in community waste has for the past years polluted our water, this is because one of South Africaâ&#x20AC;&#x2122;s main source of clean drinkable water is river banks and dams, when our communities are polluted, toxic chemicals flow with streams of water to the river banks this causes both the public and private sector to increase chlorine during the water purification process and according to the Global Health Centre too much chlorine increases chances of cancer, in fact they claim that people who drink or are otherwise exposed to chlorinated water have a 93% higher chance of developing cancer. There are many other negative effects of community waste such as soil pollution, climate contamination and others, the point

is that NOT recycling is harmful not only to your environment but you and everyone else especially because South Africa produces 108 million tons of waste per year. A total of 90 per cent of that waste ends up in landfills and only 10 per cent of waste is currently recycled. Here is how you can take a very small step that contributes towards a global green footprint: Know what treasure is and what trash is. Knowing what to recycle and what to throw away is essential, some products are not recyclable nor reusable hence when put together in the same bin, they can often create more harm than good. Clean and Sort your treasure. Introducing a culture of clean and sorting waste at home can see a little odd at first, but as time goes by, you and the family will eventually create a great recycling system. Learn about recycling programs. Recycling is not just putting trash in the bin, hence it is important that you engage with local recycling programs to know more about recycling and even realize that there are many more people like you who believe in a world where trash is seen as treasure.

57


Negative charge: why is Australia so slow at adopting electric cars? By Graciela Metternicht, Professor of Environmental Geography, School of Biological Earth and Environmental Sciences, UNSW, and Danielle Drozdzewski Senior Lecturer in Human Geography, UNSW. Co-authored by Gail Broadbent, a postgraduate researcher at UNSW’s School of Biological, Earth and Environmental Science

In the race to adopt electric vehicles, Australia is sputtering along in the slow lane. Rather than growing, Australian sales of electric cars are actually in decline. In 2016 they represented just 0.02% of new car sales – even lower than in 2013. Contrast that with Norway, the country with the highest levels of electric car adoption. Almost 30% of new cars sold there in 2016 were electric. Why are Australian motorists rejecting electric cars while those in other advanced economies are embracing them? High vehicle prices are an obvious barrier, as are motorists’ perceptions about the adequacy of the range of fully electric cars, as the National Roads and Motorists’ Association has noted. But that is only part of the answer. Our current research, in which we used online questionnaires to survey Australian motorists’ attitudes to electric vehicles, suggests that a comprehensive network of recharging stations, particularly on popular intercity routes, is essential to encourage drivers to go electric. This seems to be even more important than subsidising the cost of the cars themselves. Rechargers on highways, in country towns and at service centres need to be fast and convenient, so that motorists aren’t unduly delayed. Without the right charging infrastructure, there is no foundation to allow Australian motorists to go electric with confidence. The average Australian motorist drives 36km per day for all passenger vehicles. This is well within the range of modern fully electric vehicles – more than 150km for the models on sale in Australia – and actually less than

58 76


CHAPTER 10

Norwegians, who drive more than 40km a day on average. Norwegian drivers also enjoy the highest proportion of rechargers in the world. But on another criterion the world leader is Estonia. Itâ&#x20AC;&#x2122;s credited as the first nation to build a country-wide network, with a recharging station every 50km on major roads, and one in every town with a population of at least 5,000. Bumps in the road Every country that has successfully adopted electric cars has done so by providing an effective recharging network. But we can learn from what has gone wrong in some of these places too. Our research suggests that governments need to ensure that recharging stations work for motorists, rather than just for the network providers. Recharge points should have standardised fittings, easy payment options such as credit and debit card facilities, and prompt maintenance â&#x20AC;&#x201C; all features of existing fuel stations.

Imagine if you could only fill up with petrol by pre-registering with a network, such as Caltex or Shell, and making sure you had paid in advance before taking a long trip. It sounds ridiculous, but that is the situation electric motorists face in some places. Britain has multiple subscriber-only recharging networks, which frequently have chargers that are out of order. Recently, sales of fully electric vehicles have stagnated and it has only been a surge in sales of plug-in hybrids that boosted sales to 1.45% in 2016, up from 1.09% in 2015. California has solved that problem by introducing legislation to ensure that motorists donâ&#x20AC;&#x2122;t have to join a network and can pay for the electricity by credit card. As a result of this and other measures, such as privileged lane access and support for workplace recharging, electric cars now represent 4.8% of Californian car sales, far outstripping the US average of 0.9% in 2016.

59


Another Californian law ensures that the 40% of Californians who live in rental properties can recharge their cars at home. As Australians are increasingly living in highrise developments, ensuring car parks have the capacity to recharge cars overnight will be critical. The technology exists to enable separate billing for each car, so making sure strata management allows installation will be essential for people in units and flats to adopt this low-polluting technology. Introducing such legislation will be a necessary first step. China recently announced that it is working towards a timetable to end production and sales of internal combustion engine vehicles. It’s a good example, which Australia would be wise to follow. This will be critical if we are to reduce transport-related emissions, toxic air pollution and noise, and improve our fuel security in the face of increasingly unstable geopolitical circumstances and our growing dependence on imported fuel.

60

Without an adequate recharging network, Australian motorists risk being left in the rear-view mirror as the rest of the world’s drivers go electric. With electric cars forecast to reach price equivalency with petrol cars by 2025, we need to help Australians overcome their anxieties about running out of charge before they reach their destination. Governments can do this by mandating a comprehensive open-access recharging network to speed the uptake of electric vehicles. We won’t be able to fix the problem overnight but we have to get started. There is no shortage of other countries to look to for ideas. Graciela Metternicht, Professor of Environmental Geography, School of Biological Earth and Environmental Sciences, UNSW, and Danielle Drozdzewski Senior Lecturer in Human Geography, UNSW. Coauthored by Gail Broadbent, a postgraduate researcher at UNSW’s School of Biological, Earth and Environmental Science


1

1

2

2

WATER SAVINGS

ENERGY SAVINGS

WATER SAVINGS • Greywater • Rainwater • Greywater • Borehole water • Rainwater • Leak reduction • Borehole water • Pressure • Leakcontrol reduction

ENERGY SAVINGS • PV-power • Load Control • PV-power • Air conditioning • Load Control • •Lighting retrofit Air conditioning Lighting • •Hot waterretrofit heat • Hot water pumps heat pumps

• Pressure control

3

3

INDEPENDENT COMMISSIONING INDEPENDENT

COMMISSIONING • Green Star ratings ASHRAE standard ••Green Star ratings commissioning • for ASHRAE standard commissioning •forCIBSE standard for • CIBSE standard for commissioning •commissioning Client specific for • Client specific for commissioning commissioning • Measurement and • Measurement and verification verification

OFFICES: OFFICES: Gauteng: 012012 663663 3125 | Cape 6964 ||Durban: Durban:031 031 202 6244 Gauteng: 3125 | CapeTown: Town:021 021 423 423 6964 202 6244 Email:info@semsolutions.co.za info@semsolutions.co.za Email: www.semsolutions.co.za www.semsolutions.co.za


Machines will take our jobs and it’s going to be okay By: Craig Johnston

A New York based company has developed a brick-laying robot that is said to be 500% more efficient than human brick-layers. SAM100 (SemiAutomatic Mason) can lay 3 000 bricks per day and, at a labour cost-saving of almost 5 cents (American) per brick, the financial implications over time has construction workers worried. And, if history is any indication, they are right to be concerned. Two hundred years ago the Industrial Revolution resulted in the urban migration from rural areas by more than 70% of Americans, as the automation of farming equipment whittled down the need for human labour in agriculture to such an extent that, today, less than 1% of the workforce is active in agriculture. Technology is building the future These displaced American workers however did not just sit by idly reminiscing about the good-old-days, because automation created millions of new jobs in completely new fields. Across the pond, extensive research by economists at Deloitte, examining the rise of technology in England and Wales over more than 150 years dating back to 1871, concluded that technology has consistently been a remarkably “great job-creating machine”. The pattern that emerges, according to the researchers, is that while employment in agriculture and manufacturing for example has diminished, it is more than offset by the rapid growth in the caring, creative, technology and service sectors. This suggests that while technology might very well ‘take away’ existing jobs, it is also technology which creates new jobs. Along the same lines, the World Economic Forum released a report recently which forecasted that machines will effectively have taken

62


CHAPTER 11 over more than half of all work tasks by 2025. That is more than 20% up from current 2018 levels and an anticipated loss of more than 75 million jobs being shed over the next 5 years. However, over the same five-year period, it is believed, more than 130 million new roles will be created which equates to a net increase of 58 million jobs. We are not robots Authenticating whether these numbers of jobs will realistically be created in future is a bit like trying to nail jelly to the wall and as impossible as it is to determine, one thing that cannot be denied is that many things we can do today is only possible because of technology. We watch smart plasma-screen televisions, communicate via mobile devices (each more powerful than the computers used by NASA to launch astronauts into space in the 1960’s) and are able to send pictures of the family to relatives who live on another continent in the blink of an eye. Each of these incredible things are possible not simply through technology but because of technology. It is technology that inspired us to create more technology. So, in effect, only automation can handle further automation but, it is still only humans who can decide what humans want to do. Possibility thinking Framing the future as a race against machines is therefore probably inaccurate, rather it is a race along-side machines. There is no doubt that almost all work in the future will involve working with robots and various expressions of AI, so understanding that the future is about possibilities is

critical. Where one avenue closes, another opportunity opens up somewhere else. Industrialisation not only ushered in a new way of working, it enabled greater numbers of people (being able) to decide to pursue creative pursuits like being musicians, dancers or mathematicians and athletes, comic-book authors or yoga instructors. It was in fact because of machines that we were able to pursue these endeavours. All jobs are not equal Businesses are not started to create jobs, that is an agreeable consequence of a business. No, a business exists to meet a need. As our needs change over time, so will the businesses that seek to meet them and we will need technology to help us do it. So, while it is almost certainly correct to say that robots and technology will take our jobs in the (not too distant) future, it is equally accurate to say that robots and technology will create just as many, if not more, jobs. Milton Freeman, economist and Nobel Laureate in the 1960’s, once commented (in response to a question about the potentially negative impact that technology would have on employment), saying “if it’s employment you want, then you should give workers spoons, not shovels.” As it turns out, SAM100, our semi-automatic mason is not able to work unsupervised and once done, someone else has to tidy up the robotic mason’s work. And that is the caveat that still book-ends every report about how robots and AI are going to take over jobs. Efficiency is one thing, but aesthetics and creative thought is quite another. After all, no-one wants to be just another brick in the wall.

63


Do we need HR for the robot workforce?

Do you speak ‘bot’? It sounds like a flippant question but it’s not. In every organization, it’s the employees who drive much of the success, engaging with customers, driving revenue and profits, and keeping the wheels of business and commerce moving.

By: Lenore Kerrigan Country Sales Director

But as organizations move towards a digital future, much of this value add will increasingly be taken up by robots and autonomous systems. We are already seeing the impact of robots and cobots on a host of core business functions, and it’s only a relatively short step before business management will be talking, and even negotiating with, autonomous systems. To drive real, meaningful value in the business of the future, you may soon need to learn to speak to and understand your robots in much the same way you do with the human workforce. The proliferation of robots, cobots and intelligent ‘things’ in society and enterprises means businesses will soon need to consider human-style performance management for these new smart machines and systems. And that reality is much closer than you might think, as robots and AI increasingly help to shape businesses to deal with the exponential complexity of the digital world. But first some perspective. Books such as Max Tegmark’s Life 3.0 are beginning to explore what life with AI will mean when we take the next step, where the proliferation of connected ‘edge’ devices – the Internet of Things (IoT) - drive the next phase of the digital revolution. Whether they are cars, fridges, industrial drills or oil platforms, the data generated continually by these smart devices will result in new products, services, business and jobs.

64


CHAPTER 12 The changes will be transformative, beyond what we can currently imagine. Think of Amaraâ&#x20AC;&#x2122;s Law, which states that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

essential to analyze this machine and robot performance data in the background in realtime and show where improvements can be made and flag up areas such as predictive maintenance.

Essentially, the physical world is getting an upgrade. It will be mapped, measured and organized, and in some cases managed remotely or virtually. Sectors like logistics will become more efficient. Urban transportation systems will have more capacity and be safer. When the world can be measured and monitored in real time, then autonomous vehicles will also become not just a possibility but an inevitability because they will be safer.

Taking this one step further, itâ&#x20AC;&#x2122;s not hard to see that automation and AI could also have a key role to play in measuring and managing human performance too. Could AI also replace much of the legwork and guesswork around HR with something... better? The same kind of extreme automation and AI that might be used to manage the performance of the robot workforce can also be applied to radically improve the HR departmentâ&#x20AC;&#x2122;s management of the human workforce.

Your business will also change. Every business is built on its people and in the future autonomous and edge systems will be assets in the same ways as your staff are assets today. And as with human employees, these devices and machines have relationships, speak to one another and have inter-dependencies, identities, maintenance schedules, a useful serviceable lifespan and performance reviews.

There is a huge amount of both structured and unstructured data that HR departments collect and manage. AI has the potential to analyze this data automatically in a way that both makes HR more efficient and replaces much of the guesswork. For example, algorithms can be used to identify top employees at risk of leaving, or match and rank thousands of CVs sent in to a job opening.

In short, your robots will perform very much like people. But the complexity of managing that robot workforce and its performance is huge. Businesses will need to have performance management, or a HR department, for the machines as well as the human workforce. For machines this means servicing, efficiency, the ability to hire and fire and so on.

It might sound more like a Black Mirror future rather than the blue-chip present. But this is how the world economy will develop and diversify over the coming decades, with interesting new products and services working on top of the current systems, taking much of the pain out of often laborious processes and introducing entirely new ways to interact with customers.

The monitoring and accountability of your robots will be crucial to business success. But the complexity and volume of that data is beyond being done by a human. This is where automation and AI will be

But it also means taking a look at the next step in the evolution of ourselves and the world we live in. You may need to consider taking classes in bot negotiation sooner than you think.

65


International outlook: Utility management in East Africa By: Marleze van Loggerenberg Head of Business Development Africa at Wipro Limited

Urban areas in East Africa are struggling to meet the high demands for electricity, water and sanitation, and poor, inefficient utility delivery continues to plague countries such as Kenya, Uganda and Tanzania. Year-on-year urban population growth is adding pressure to an already overloaded grid. Electricity and water supply is intermittent and often not regulated enough or not properly monitored, and complexities such as disparate systems and multiple service providers contribute to the growing problem. Apart from increasing demand, many of these countries also struggle with aging infrastructure, which can make utility provision unsafe, as well as unreliable. Electricity supply is often interrupted due to people cutting down the wooden pylons to use to build their homes, often leaving the site dangerous and in a state of ill repair until the utility provider is able to find time to fix it â&#x20AC;&#x201C; and thatâ&#x20AC;&#x2122;s when they are able to identify where the issue is. Primed for technology There is a strong push from governments to uplift these countries with innovative

66


CHAPTER 13 solutions for utility and infrastructure provision, which may well see them leapfrogging to sustainableenergy solutions quicker than the rest of the world. However, before a country is able to get their infrastructure, services and utilities to the point it needs to be, they need to get their back-office systems such as billing structures and customer management in line, first. Enterprise Resource Planning (ERP) solutions are gaining popularity in East Africa to help solve these billing concerns, and to try streamline processes and better manage various stakeholders. Current systems in place for many of these regions are outdated and fragmented, with many of them still operating manually. In order to run utilities more efficiently, proven Enterprise Asset Management (EAM), Metering and Billing solutions need to be deployed. Next level EAM This goes a step further, however. EAM systems can also help utility providers to fix and maintain their infrastructure, through enterprise asset management. Utility providers know that they need to address existing problems before they can begin upgrading or building out from their infrastructure. This is a lengthy and less rewarding process, especially as something inevitably breaks as soon as another thing is fixed. These utility providers are perfectly primed to leverage EAM systems with built in toolsets, like field force enablement and edge devices like sensors, to quickly and proactively resolve issues on broken electricity cables and water lines. This enables them to better schedule regular and

predictive maintenance teams who, with the aid of geo-fencing and tracking, don’t waste time going to the wrong area or driving across country when a closer team can attend a fault. Smart devices Accurately measuring water and electricity usage is challenging in some African countries. Many dwellers don’t have running water or electricity, and either leverage off of their neighbour’s supply or, as with water, take from a communal tank. Those with proper water and power often share theirs. Proper meter readings are not possible, therefore introducing smart metering – which have helped many countries with billing problems – will only be possible once the problem of accurate distribution is resolved. The other side of the coin is that these countries have the ability to skip a few steps. Integrating Enterprise level Billing and Customer Relationship Management (CRM) solutions with mobile devices to enable the ‘smart citizen’ not only garners the help of the population to identify problem areas faster, but also enables a level of self-service to better manage billing and payments. Renewable power can be incorporated into traditional power supply, feeding back into the grid while ensuring users don’t have to cut corners to receive power. The opportunities to incorporate these technologies into systems as early as possible will not only begin to rectify the existing issues but will also take these countries’ utility provision into the future, surpassing countries who have had to go the traditional route, and possibly even pacing the way for a greener, cleaner Africa.

67


Going solar: What you need to know upfront By: Kevin Norris Consulting Solutions Architect: Renewable Energy, Jasco Intelligent Technologies

In the wake of looming energy price hikes many organisations are proactively considering solar solutions as an alternative. The time to go solar has never been better. However, solar solutions projects required to power an organisation can be complex, with a number of “hidden” costs and potential pitfalls that could jeopardise its success. Companies should be aware of the challenges before embarking on their solar project. Cost calculations In planning a solar solution, one of the most common errors made is the failure to properly calculate the true costs. Solar solutions comprise of more than just solar panels and inverters. According to the Solar Energy Industries Association, over sixty percent of the total cost of solar solutions in the US lie in the “soft” costs, with the actual panels and inverters making up less than forty percent. The same parameters are very likely to hold true for South Africa and the rest of the globe. Organisations should carefully scrutinise their solar provider quotes to ensure that all ancillary costs; labour, site surveys, engineering and design fees are factored in. Also, peripheral components such as mounting structures and/or assemblies and wire management costs should be included. It’s not always possible to accurately calculate all costs until implementation is complete, as the scope may change or difficulties may be experienced throughout the course of the project. This is especially true when obtaining budget quotes where no site surveys or assessments have been done.

68


CHAPTER 14 In planning a solar solution, one of the most common errors made is the failure to properly calculate the true costs In addition, it is critical to account for storage, transport and security of all delivered equipment, bearing in mind that components may lie in storage for some time while the project is under way. Solar equipment is a hot target for theft, therefore, twenty-four-hour security is imperative for the duration of the project. It takes a team A successful solar solution is the result of skills that extend beyond the installation phase of the project. Depending on the scope, scale and conditions of the solar solution, different people will be needed to contribute their expertise, and advise at various stages of the project. Solutions architects are needed to design and engineer the solution, based on a site survey which yields information on the requirement and site conditions. The is a lengthy process and many companies fail to comprehend the amount of work that goes into planning and designing a solution before a proper quotation can even be raised. This is one of the reasons why budget quotes are so unreliable. If the solution is mounted on high poles (for example with security camera power supply applications), car ports or at ground level, civil engineers will be needed to assess soil conditions and provide a solid, stable foundation. A weak or poorly factored foundation can result in the entire structure collapsing at the first sign of strong winds or excessive rainfall. If the solar solution is going atop a roof, structural engineers will be required to

assess structural stability and strength of the building, and make structural enhancements if necessary. The stringent regulations of The Occupational Health and Safety Act must be adhered to, as inspectors may investigate a solar solution at any time during implementation. Failure to comply can result in very costly fines, as well as a halt in production until compliance is met. A formal Health and Safety officer will ensure that the project is registered with the Department of Labour, and that all standards are adhered to. There are also many other professionals that may be required, from electricians to environmental impact assessors. It takes a team for a solar solution to be implemented in a sustainable and successful manner, and organisations should ensure their solar solution provider includes these associated personnel costs in their quote. Additional things to consider There are several additional, yet, important aspects that aren’t always considered when planning and implementing a solar solution, resulting in exceeded budgets, poor installation or even risk of fines. These include: • The impact of environmental factors such as wind, rain and proximity to the coast; • Logistics requirements - forklift and utility vehicle hire, and storage space required for the duration of the project; • Insurance - both during and after installation, to mitigate risk;

69


The stringent regulations of The Occupational Health and Safety Act must be adhered to, as inspectors may investigate a solar solution at any time during implementation • Using reputable suppliers - poor quality equipment, or civil work, will inevitably lead to having to do repairs and replacements before necessary; • Applications - depending on the scale and location of the solution, organisations need to lodge applications with various governing and regulatory bodies such as the National Energy Regulator of South Africa (NERSA), the Department of Energy, the local utility provider, the department of Health & Safety, etc.; • Time - a sizeable project can take several months or longer to complete, factoring in travel, accommodation and subsistence allowances for installation staff for the estimated duration of the project, etc.; • Solution maintenance - solar solutions are fairly self-sufficient once up and running, however they do need to be regularly maintained and monitored to ensure maximum efficiency and uptime. There are remote monitoring systems which proactively monitor for issues such as soiled solar PV modules, degradation, and wear and tear, sending an automatic alert when performance drops so that businesses respond accordingly and address the area of concern. This extends the longevity of the solution and can reduce the risk of downtime or system failure.

before they begin. The service provider needs to be invested in software and hardware solar knowledge, and must be able to identify possible areas of risk or concern so that they can be addressed at the initial phase - possibly even from quote stage.

Before embarking on a solar solution, businesses should make sure they use a reputable solar solution specialist provider who fully understands the requirement

Site surveys are often seen as unnecessary spending, however, UPS and generator power systems can be exorbitantly expensive, and the costs of site surveys are

70

Selecting the best UPS (Uninterruptible power supply) Selecting the best UPS to meet your requirements isn’t as simple as choosing one from a catalogue or going with the solution that works best for another company. Your business has unique requirements and there are a lot of factors that go into planning the right solution. These include calculating the exact power load and ensuring that there are not external problems which could impact the functionality of the system. Incorrect planning could result in a system that is unequal to the task. You could end up overspending on a system that overcaters for your requirements. Price has no impact on the suitability of a solution. Your chosen solution in fact, could end up costing more in the long run due to damages caused by incompatibility or additional components required later. For these reasons, it is essential to ensure a proper site survey is carried out before investing in a UPS or generator solution.


CHAPTER 14 often negligible when weighted against the overall solution. The benefits of conducting a proper site survey extend beyond saving money on your solution. -They can help identify inefficiencies in your business’s power environment, the correction of which could save you even more money. Proper site surveys are more than simply visiting a site and quickly assessing what equipment requires power backup before proposing a solution. Quick surveys may be able to determine what the electrical load is, but will not be able to detect underlying power problems, invisible to the naked eye. Nor can they assess any events which may impact power delivery. For example, an industrial machine may cause a large power drain when it is switched on, and such activities need to be catered for in the event of a power outage. Typically, a quality site survey should include monitoring your business’s electrical environment for at least seven days, factoring in the parameters relevant to the equipment being catered for (which should be confirmed before starting). This will give an overview of factors such as poor power factor (inductive) loads, voltage fluctuations, harmonics, transience and any patterns which may impact a backup power system. A good power service provider will be able to provide you with a UPS solution that can operate easily and efficiently within the existing parameters of your organisation’s existing electrical environment and confine its output to fit within the tolerances of the equipment it supports.

The surveyor should also inspect the electrical distribution within your site premises, tracing from the source of power to the load in order to check for any obvious flaws. These should be corrected before installing a UPS or taken into account with the proposed solution. Something as seemingly inconsequential as a bad power terminal can cause inefficiencies in the delivery of power to your entire organisation. It can also put unnecessary pressure on a UPS system. Over and above examining the existing electrical environment, the survey should also inspect the proposed area where the UPS is to be installed. Improper housing without the necessary cooling and filters can negatively impact the lifespan of a UPS system, and may well cause the system to fail before it even starts. Once the seven day (minimum) evaluation is completed, and the parameters of both the existing and proposed environments are confirmed, the service provider should be able to produce a report on the power status of your business. This report should detail the requirements as well as suggest any recommended corrections to be done before a UPS is installed. A site survey will also equip the service provider with all the information needed to specify the perfect solution options to meet your requirement. In so doing, you will be protected, knowing that your chosen solution will work, and that accountability for an incorrectly specified solution rests with the service provider. It’s a win-win.

Before embarking on a solar solution, businesses should make sure they use a reputable solar solution specialist provider who fully understands the requirement before they begin

71


INDEX OF ADVERTISERS

COMPANY

PAGE

Biotherm

13

Geogroup

18

Geyserwise

11

Innomatic Solar Investec

9 IFC; 17

NCPC

IBC; OBC; 52-55

Nersa

3

Sika Shared Energy Services

56

14-15 61


energy Energy


Profile for Green Economy Media

Sustainable Energy Resource Handbook v9  

Sustainable Energy Resource Handbook v9  

Advertisement