Energy - November 2023 Edition

NOVEMBER 2023

ACCELERATING SOUTH AFRICA’S AUTOMOTIVE INDUSTRY TOWARDS NET ZERO

AUDI ON TC H N O W WA

Inside: COASTAL WINDS AND CLEAN ENERGY | THE FUTURE OF OIL AND GAS | THE STATE OF SOLAR | DIGITALISATION OF THE GRID | AND MORE

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F ROM T HE EDI T OR

DARK DAYS AHEAD

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hen 6 September rolled in, there had been 19 974 gigawatt hours of load shedding in 2023 – more than 2015, 2018, 2019, 2020, 2021 and 2022 combined. That’s quite an achievement for the utility, despite the repetitive platitudes and assurances by government that we would soon see the back of regular power cuts. Sadly, we won’t.

What we might see the back – or at least the side – of in the future, however, is the oil and gas industry as the world shifts towards greener forms of energy generation. In this issue, we explore the complicated implications including the possibility that resource-rich nations extract as much as possible, as quickly as possible.

That shift will happen most notably in the transport sector, and South Africa needs to plan carefully to avoid being left behind.

A new partnership between the Council for Scientific and Industrial Research and the

Contents 6

FOSSIL FUELS What does the shift to green power mean for the oil and gas industries?

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WIND South Africa has abundant coastal winds, but can it exploit this resource for abundant clean energy?

14 AUTOMOTIVE Accelerating the industry to net zero.

18 FUNDING Innovative funding models for innovative energy projects.

19 INVESTMENT Unpacking the implications of South Africa’s renewable energy agreement with China.

23 SOLAR • Contemporary trends in solar energy.

• What to consider when choosing a business solar PV installation for a business.

• Growing solar panel installations are driving a thriving black market.

Automotive Industry Development Centre may help with this. Solar isn’t the only green energy possibility, with many touting our windy coastline as holding great potential for offshore wind development. But can we afford it? Of course, there’s no point in generating green kilowatts if the grid infrastructure can’t handle them, so modernisation and digitalisation of the grid is essential, as is supportive policy and legislation to enable a sustainable transition.

Despite these efforts, there’s no escaping load shedding, with new, terrifyingly numbered stages being published, with major implications for you and your business. There’s also a look at funding models, new and improved energy standards, solar panel security, foreign investment, the role of energy conferences and more. Just be sure to read it all before the lights go out again.

Anthony Sharpe Editor

28 LOAD SHEDDING Is the publication of extended load-shedding stages cause for alarm?

29 ENERGY TRANSITION Why collaboration is key.

30 GENERATION Do the projected costs for Eskom’s Koeberg refurbishment add up?

34 STANDARDS On a path to informed energy management.

35 DIGITALISATION In an evolving energy landscape, distribution via an optimised grid is key.

Read more about the rands and cents of sustainability in our Green mag.

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An uncertain future for oil and gas The sustainable energy industry is growing in leaps and bounds, but that doesn’t mean our oil and gas reserves will necessarily become worthless – or any less potentially damaging to the environment. ANTHONY SHARPE explores the role of these fossil fuels in a sustainable future

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lobal oil consumption has increased steadily for decades, driving the wheels of industry and the global economy. So much so that, as of 2022, we consumed 97.3 million barrels of the stuff daily (according to Statista). That’s 15.47 billion litres – or almost 2 litres for every person on earth, every day. It’s no surprise: more than 3 000 products can be made from oil. We use it to fuel vehicles, create electricity, heat homes, build roads, make plastics and much, much more.

Natural gas, though less versatile, has a broad array of applications, chief among which are cooking, heating and electricity generation.

The world used about 3.94 trillion cubic metres of gas in 2022, which equates to about 1.34 cubic metres of gas per person per day.

These fossil fuels are largely responsible for modern civilisation as we know it. However, as we also know, they’re responsible for a great deal of environmental damage, including what is widely regarded as irreversible and only worsening climate change. So, it’s a good thing

that we’re transitioning to an ever-evolving range of green energy sources, including solar, wind, hydropower and geothermal power.

However, those oil and gas resources aren’t going to vanish just because we’ve come up with less environmentally damaging alternatives.

BP’s 2019 Statistical Review of World Energy pegged the total proven reserve of oil on earth at 1.734 trillion barrels, which at current consumption levels should last about 48 years.

That doesn’t take into account undiscovered or underexplored reserves, unforeseen technological or infrastructural advances, or what the US Energy Information Administration refers to as “technically recoverable resources”, which can be extracted using current technology, but aren’t necessarily profitable.

As for natural gas, in 2020, there were around 205.5 trillion cubic metres left in the world, roughly enough to last for 52 years.

In other words, there are plenty of fossil fuels left – especially if demand declines, which it is expected to do by 2028, according to the

BP’S 2019 STATISTICAL REVIEW OF WORLD ENERGY PEGGED THE TOTAL PROVEN RESERVE OF OIL ON EARTH AT 1.734 TRILLION BARRELS, WHICH AT CURRENT CONSUMPTION LEVELS SHOULD LAST ABOUT 48 YEARS.

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Oil 2023 report by the International Energy Agency. This predicted decline will be driven largely by the advent of alternative vehicle fuels and improved vehicle efficiency.

So, what happens to all those fossil fuels when demand starts to shrink?

RUSH TO BURN It’s easy to see a decline in demand for oil and gas as a good thing, because it undoubtedly is.

However, that all these fossil fuels remain in the ground presents what is known as the “rush to burn” or the “green paradox”, explains Prof Kai Konrad, director at the Max Planck Institute for Tax Law and Public Finance. Essentially, if producers of fossil fuels expect future sales to decline, they will move to supply as much of their resource as possible in the short term. This jump in supply will cause prices to fall and consumption to rise, along with associated emissions, particularly in countries that aren’t Prof Kai Konrad subject to one of the many climate treaties being drawn up worldwide.

Prof Konrad says that thus far only two options for avoiding this undesirable scenario have been identified. One is where all

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consumers – in fact everyone with an interest in stopping climate change – pays those with oil and gas deposits not to exploit them. It’s a huge amount of money however you calculate it, and interest would have to be paid every year too to compensate them.

This works in principle, he says, but points out it would be outrageously, prohibitively expensive. And then there’s the obvious issue of consensus – if there are 100 countries interested in stopping climate change, how do you decide who pays what? Prof Konrad says this leads to the same common pool problem as with climate conventions: all countries want the others to reduce their consumption or pay for not doing so. And, as he points out, we have close to 30 climate conventions across the world, with few tangible results.

IMAGES: NEWANNYART/ISTOCKPHOTO.COM, RONFULLHD/ISTOCKPHOTO.COM, SUPPLIED

CREATING AN ALTERNATIVE MARKET The idealistic, altruistic route, then, seems unlikely to succeed. So, what is the alternative?

“We know that there are anticipation effects in the oil and gas markets,” explains Prof Konrad. “There is literature that empirically examines whether or not a market intervention that will occur some years down the road affects demand and supply today. If the market anticipates that these resources will be extremely valuable in 10 or 20 years, that will have an anticipation effect in terms of cutting down what suppliers want to sell at a low price in the short term.”

The way to do this, says Prof Konrad, is to create a market for climate-neutral or -friendly products derived from fossil fuels. Knowing that oil and gas will be valuable commodities – perhaps even more valuable – in a sustainable future world will most likely prompt resource owners to withhold their supplies today.

“People aren’t thinking in this direction at the moment, however,” he says. “They think oil is on its way out, so they aren’t innovating in this direction. Devising substitutes from

oil-derived plastics is, if you think about it in the context of breaking the rush to burn cycle, actually counterproductive.”

THE AFRICAN PICTURE Africa finds itself in a difficult position. According to the World Meteorological Organization, the continent’s contribution to global greenhouse gases is marginal, yet the impacts it suffers from climate change are disproportionately great.

At the same time, Africa’s rapidly rising energy needs – driven by industrialisation and surging populations – might exceed its supply. A 2022 McKinsey report, The future of African oil and gas: Positioning for the energy transition, estimates that the continent may require 30 per cent more energy by 2040, compared with a 10 per cent global increase in demand.

Oil and gas have a significant role in meeting these energy needs, as well as growing the economies of countries across the continent.

The economic impact is profound: the same report found that more than half of Africa’s oil- and gas-producing nations earn more than 50 per cent of their total export revenues through these commodities.

With African oil and gas resources 15–20 per cent most expensive to develop and 70–80 per cent more carbon intensive than their global counterparts, and oil companies under increasing financial and sustainability pressure, there could be a storm brewing for these resource-rich nations unless they focus on improving the sustainability and efficiency of their operations. Otherwise, the report notes, they risk finding their resources stranded. This will place government spending and development under pressure in these nations, of course, but also potentially leave them in a stronger position should a sustainable market for fossil fuel products materialise, as Prof Konrad hopes.

As ever, there are no simple solutions or easy answers, merely an uncertain future for oil and gas and the nations that rely on them.

South Africa is the second-largest consumer of oil in Africa, using 621 000 barrels a day. That’s significantly less than Egypt’s 878 000 barrels, but also a lot more than Algeria in third place, which uses 405 000 barrels.

Topping the list of oil producers (as of August 2023) is Libya, which cranks out 1.19 million barrels per day, followed by Nigeria (1.18 million) and Angola (1.12 million).

Source: Statista Trading Economics

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“IF THE MARKET ANTICIPATES THAT THESE RESOURCES WILL BE EXTREMELY VALUABLE IN 10 OR 20 YEARS, THAT WILL HAVE AN ANTICIPATION EFFECT IN TERMS OF CUTTING DOWN WHAT SUPPLIERS WANT TO SELL AT A LOW PRICE IN THE SHORT TERM.” – PROF KAI KONRAD ENERGY

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BLOWING IN FROM THE SEAS South Africa has abundant coastal winds, but can it exploit this resource for abundant clean energy? By JAMES FRANCIS

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he South African energy market is currently bursting with options as the country tries to reverse massive power cuts caused by years of state neglect and mismanagement. Though our backs are against the energy wall, the load shedding crisis also presents an opportunity to build new and modern power infrastructure.

While the powers that be cling to fossil fuels, the rest of the market is investing in renewable systems, with solar taking the lead. Wind power is also building its presence, and by 2021, South Africa had reached an overall wind power install base of 3 443MW. Yet, these are onshore installations, so what about offshore wind?

Offshore wind development is often overlooked because it is more expensive than its terra-bound cousins, yet it can offset those costs through much higher and consistent energy generation. Is this a viable concept for a country with some of the best coastal winds in the world?

THE CASE FOR OFFSHORE WIND South Africa has good wind conditions.

According to the South African Wind Energy Association (SAWEA), more than 80 per cent of the country’s land mass has wind conditions that

can drive high generation levels at 40 per cent less cost than generating power from Eskom’s newest coal-powered stations. Wind power also delivers water savings: each kilowatt hour of wind that displaces fossil fuels saves around 1.2 litres of water, which is crucial given South Africa’s water stresses.

Offshore wind’s performance seems even better. A 2020 paper, “Offshore wind energy – South Africa’s untapped resource”, estimates that the country can generate around 2 387 terawatt hours of energy annually. The World Bank is also enthusiastic about our offshore wind power potential, and a glance at the Global Wind Atlas shows the country has some of the best offshore wind conditions in the world.

“I believe wind should and will have a greater part in South Africa’s energy mix,” says renowned energy expert and lecturer Lungile Mashele. “In particular, I would like to see offshore wind play a role. There are limitations, such as transmission and cost, but the higher energy yields could make up for those.”

There is some appetite for developing offshore wind, says SAWEA CEO Niveshen Govender. “According to our market intelligence, there is interest in offshore wind farm development along the coastlines,

“THERE IS ROOM FOR BOTH ONSHORE AND OFFSHORE WIND DEVELOPMENT WITH UNIQUE BENEFITS TO BOTH THAT WILL POSITIVELY CONTRIBUTE TO SOUTH AFRICA’S ENERGY MIX.” – NIVESHEN GOVENDER 8

FAST FACT

Wind power represents five per cent of South Africa’s total installed power generation capacity – a total of 3 443MW in 2023.

Source: GlobalData, CleanTechnica

with particular interest on the east coast due to the availability of grid connection and environmentally suitable conditions. There is room for both onshore and offshore wind development with unique benefits to both that will positively contribute to South Africa’s energy mix.”

Offshore wind energy could be a boon for coastal cities and towns, and feasible sites have

Niveshen Govender

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OFFSHORE WIND ENERGY SITES Most of South Africa’s 2 800km coastline has wind speeds of over 7m per second – very appealing for offshore energy generation.

However, the relatively deep waters (more than 50m) are challenging.

A small region off Durban’s coast offers 50m depths and other suitable conditions to potentially generate 18GW. The coastline between Durban and Namibia varies in depth and can deliver a combined 567GW of energy, including spots near Richards Bay, KwaDukuza, Durban and Struis Bay. Source: World Bank, Journal of Energy in Southern Africa

been identified off the coasts of KwaZulu-Natal, and the Eastern, Western and Northern Capes.

Yet, while the case for offshore wind is great, so are the barriers.

IMAGES: RUSHAY BOOYSEN/ISTOCKPHOTO.COM, SUPPLIED

OVERCOMING THE CHALLENGES The foremost issue with offshore wind is its development cost, amplified by its scale. The Dutch government is currently constructing several offshore wind farms, dubbed the Kust Noord and West Alpha projects. These are gigantic, for example, the jacket (the steel structure that supports offshore rigs) for West Alpha’s substation uses nearly 2 000 tonnes of steel. Relatively speaking, that’s not even so large – a jacket installed at a site off the Scottish coast came to 5 100 tonnes. That’s a lot of steel, and those are just the supports.

The wind generators, which are larger than onshore models, and transmission cables are also demanding infrastructure projects, especially since such wind sites can sit around 200km offshore.

“South Africa has a significant coastline that stretches for almost 3 000 kilometres, with perhaps half of this being useful for wind generation,” says Mashele. “The current concerns with offshore wind are the costs, deep sea logistics, environmental impact, and skills, which will most likely be imported as we don’t have these.”

There are also concerns that the South African offshore environment might be too demanding. Specifically, the local ocean currents are among the strongest in the world and could make it difficult to manage

FAST FACT

Offshore wind farms produce, on average, more power than onshore wind. The generation units are bigger, offshore conditions provide consistent wind, and offshore turbines don’t have the tip height limits that apply to onshore wind generators.

Source: NationalGrid.com

floating platforms, while the relatively deep coastal waters would complicate installing permanent structures.

SHOULD SOUTH AFRICA ADD OFFSHORE TO THE MIX? Another notable objection is that the transmission grids in some cities are not ready for such an influx of power. Transmission infrastructure in the relevant regions would need upgrades and expansions to enable more energy development.

However, grid issues can be catalysts for improvement, says SAWEA chief communications officer Morongoa Ramaboa. “It is our understanding that the development and implementation of offshore wind

in these areas will support the balancing of the grid in providing inertia and stability. The development of offshore wind and providing grid connection points will also spur on the expansion and upgrading of grid infrastructure to be able to handle this influx of energy.”

These challenges are not deal-breakers, and South Africa’s offshore wind conditions are ideal for consistent, high-volume energy generation. Yet, offshore wind energy does not feature in the country’s energy plans and is not mentioned in the state’s Integrated Resource Plan (IRP). This omission may be the primary reason why there are no prospective offshore wind projects.

“Government would not want to participate outside of its power purchase agreements,” says Mashele. “I don’t think any bidder would consider it unless the IRP specified that they were looking at offshore projects as well.”

This is unfortunate since many energy experts support the prospect of offshore wind power generation in South Africa.

The local conditions are well-suited and could even help us become a major energy exporter in the region, planting the seeds for an offshore industry with local skills development.

Morongoa Ramaboa

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SETTING THE BAR FOR HIGH-END ELECTRIC VEHICLES AUDI discusses the top five progressive features of high-end luxury electric vehicles as embodied in the Audi e-tron

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he automotive industry is currently experiencing a remarkable transformation with the rise of electric vehicles (EVs). Last year alone, global electric car sales exceeded 10 million, up 55 per cent from sales in 2021. This shift towards sustainability is not just a win for the environment, but also a testament to the advancements in automotive technology.

High-end luxury electric vehicles are at the forefront of this revolution, integrating cutting-edge features that not only redefine driving, but also contribute to a greener future.

Enter Audi’s e-tron range of vehicles – prime examples of the breed. Boasting ample

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luxury-class comfort, an optimised drive concept, improved aerodynamics, and better charging performance and battery capacity, the e-tron model line-up is progressing the future of electric vehicles with the following five cutting-edge features (model dependent).

1. BATTERY MANAGEMENT SYSTEM: MASTERING ENERGY EFFICIENCY The battery is the heart of an electric vehicle, and its efficiency is paramount. Luxury EVs employ advanced battery management systems to ensure optimal performance and longevity. These systems regulate temperature, voltage and charging patterns,

maximising the battery’s efficiency and lifespan. With the ability to adapt to diverse climates globally, luxury EVs can thrive across different terrains and conditions.

In the case of the latest generation of the Audi e-tron, enhancements to cell technology and chemistry have yielded significant improvements. Leveraging stacking technology, this innovation achieves up to 20 per cent higher energy density within the same space.

The battery capacity available to customers has also been increased by updating the battery management system.

What’s noteworthy is the Audi e-tron’s distinctive charging curve, setting it apart from

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UNLIKE INTERNAL COMBUSTION ENGINES, ELECTRIC MOTORS OFFER INSTANT ACCELERATION AND HIGHER TORQUE, RESULTING IN A RESPONSIVE, EXHILARATING DRIVING EXPERIENCE.

competitors. This curve maintains a high level for an extended duration, allowing the battery to rapidly recharge and achieve long ranges.

This quality makes the Audi e-tron highly suitable for long-distance travel.

2. POWER ELECTRONICS: THE NERVOUS SYSTEM OF EVS Power electronics are the nerve centre of high-end luxury EVs. These intricate systems enable seamless communication between various components, optimising the operation of the electric motor and battery. Unlike traditional internal combustion engines, which rely on mechanical components, EVs are driven

by instantaneous electronic signals, resulting in rapid and precise responses. This technology is the backbone of the EV’s impressive performance and efficiency.

The electric drive system within the Audi e-tron admirably meets diverse demands, offering high-performance capabilities for a luxury SUV. This system ensures superior traction, even in challenging road conditions or critical situations, courtesy of its electric all-wheel drive. With an efficient powertrain, the Audi e-tron delivers dynamic driving performance. Notably, improvements across multiple drive components lead to consumption values standard within its class, coupled with an increased range.

Each electric motor in the e-tron operates under the control of its individual power electronics module. These modules gather data

from the drive control unit, which consolidates inputs from the accelerator pedal, brakes and electric all-wheel drive. By reading sensor data 10 000 times per second and providing current values for the electric motors, these modules optimise output utilisation, especially during dynamic vehicle operation.

Certain functions, including vibration damping and slip control, are seamlessly integrated into the power electronics. This integration facilitates interventions without deceleration, enhancing the vehicle’s ability to accelerate, particularly on icy roads. The power electronics convert battery-generated direct current into three-phase current for the drive system. During recuperation, the power electronics transform generated three-phase current back into direct current, replenishing the battery.

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A DV ER T ORI A L AUDI

ENHANCEMENTS TO CELL TECHNOLOGY AND CHEMISTRY HAVE YIELDED SIGNIFICANT IMPROVEMENTS.

3. ADVANCED DRIVER ASSISTANCE SYSTEM Luxury EVs now come standard with sophisticated Advanced Driver Assistance Systems (ADAS). These systems have begun to revolutionise the driving experience, offering varying levels of automation while enhancing convenience and safety on the road. From adaptive cruise control that recognises and adjusts to speed limits to automated parking, ADAS are a stepping-stone towards fully autonomous driving. As these technologies continue to evolve, they promise to reshape the very nature of transportation.

During journeys, for instance, drivers need reliable information about remaining range for effective planning of charging stops during long-distance trips. The e-tron route planner offers comprehensive support, considering

factors such as driving style, comfort feature usage such as climate control, and external elements such as traffic congestion, route topography and outside temperatures. This information enables the route planner to strategise the integration of charging stops into the planned route.

Charging schedules can be managed from within the vehicle using the Audi Multi Media Interface (MMI). The system also incorporates driver-specific traits, such as sporty or economical driving tendencies, ensuring accurate calculations. It smoothens transient load increases, enhancing realism. Additionally, the route planner intelligently identifies charging stations along the route to minimise travel time while suggesting necessary stops based on route changes or consumption shifts.

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4. INTELLIGENT BRAKING: EFFICIENCY MEETS USER-FRIENDLY DRIVING Intelligent braking is a game-changer in the world of luxury EVs, enabling “single-pedal driving”. This feature not only simplifies driving, but also harnesses energy that would otherwise be wasted during braking. By converting kinetic energy back into usable electrical energy, which is then stored in the battery, intelligent regenerative braking increases the vehicle’s overall efficiency. As drivers incorporate this into their driving style, luxury EVs become not only more energy efficient, but also more user-friendly.

Remarkably, the Audi e-tron utilises its disc brakes in just 10 per cent of braking situations during normal conservative driving, thanks to its intelligent recuperation concept. Up to a deceleration of 0.3g, the system harnesses energy via the electric motors exclusively, circumventing conventional brake usage.

Instead, these brakes act as generators,

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INTELLIGENT BRAKING IS A GAME-CHANGER IN THE WORLD OF LUXURY EVS, ENABLING “SINGLE-PEDAL DRIVING”.

converting kinetic energy into electrical energy.

The internally ventilated 18-inch wheel brakes engage only when the driver applies the brake pedal for deceleration beyond 0.3g. The vehicle assesses each situation individually, deciding whether to decelerate through the electric motor, wheel brakes, or a combination of both, and does so for each axle.

The Audi e-tron offers adjustable regenerative braking via optional steering wheel paddles. At the lowest level, the vehicle glides without additional drag torque when the driver releases the accelerator, maximising energy utilisation. In stages 1 (balanced – low deceleration) and 2 (strong – high deceleration), the electric motors generate regenerative braking torque, producing electricity while notably reducing speed. Additionally, the driver can select automatic mode within the MMI, letting predictive efficiency assist in managing deceleration based on factors such as route and other vehicles.

CHARGING SCHEDULES CAN BE MANAGED FROM WITHIN THE VEHICLE USING THE AUDI MULTI MEDIA INTERFACE. Efficient recuperation in the Audi e-tron relies on its brake-by-wire braking system, decoupling the brake pedal from brake hydraulics. This pioneering electro-hydraulic integrated brake control system was introduced

by Audi in a mass-produced electric-drive vehicle, offering precise pressure build-up for wheel brakes, almost twice as swift as traditional systems.

5. ELECTRIC MOTOR: REDEFINING PERFORMANCE AND SUSTAINABILITY The electric motor propels the remarkable performance of luxury EVs. Unlike internal combustion engines, electric motors offer instant acceleration and higher torque, resulting in a responsive, exhilarating driving experience. With as few as 20 moving parts compared to over

2 000 in internal combustion engines, electric vehicle motors bring advantages such as reduced maintenance costs, quieter operation and zero emissions. The electric motor epitomises the shift toward sustainable performance, setting a new standard for driving pleasure.

The Audi e-tron boasts electric motors on both axles, functioning as asynchronous machines. The current flow in the stator windings generates a magnetic field around the rotor axis, propelling it. Notably, this approach yields high efficiency since motors produce no electrical drag losses when no current flows.

In the case of the Audi e-tron, the rear axle’s electric motor concept enhances its torque generation, resulting in increased efficiency, reduced consumption and extended range. It truly embodies progress you can feel.

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AU T OMO T I V E

Unpacking the first stop on the roadmap to decarbonisation,

by MANIE DE WAAL, CEO of Energy Partners

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hile the world races to net-zero emissions by 2050, the global automotive industry is at a crossroads, facing the unprecedented challenge of rethinking strategies, cultures and products as it navigates the complex landscape of decarbonisation.

Industry stalwarts, such as Mercedes-Benz, Volkswagen, BMW and Ford, have set ambitious targets to curtail Scope 1, 2 and 3 emissions, aligning with the need to decarbonise before 2030, when the European Union will cease to import internal combustion engines. South Africa’s robust automotive industry, a cornerstone of the nation’s economy, is no exception to this transformative shift and thus finds itself at a critical juncture.

The industry contributes 4.9 per cent to South Africa’s gross domestic product, accounts for 12.4 per cent of the country’s exports, and employs around 110 000 people, according to 2018 Manie de Waal figures. The sustainability challenge is no longer a peripheral concern, but a strategic and operational priority, and failing to address it will have profound implications for the economy, local jobs and the industry itself.

GOVERNMENT INITIATIVES AND INDUSTRY COMMITMENT Fortunately, strides are already being made to mitigate the looming paradigm shift. At the governmental level, Deputy Finance Minister David Masondo recently unveiled plans for fiscal support aimed at facilitating the industry’s

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transition toward producing electric vehicles.

The funding will be allocated in the October 2023 mid-term budget.

Meanwhile, the National Automotive Association of South Africa has revealed that 16 automotive component manufacturers have committed to investing R4.86-billion in the domestic economy up to December 2024.

The associated employment impact of the investments equals more than 10 000 new and maintained jobs.

Among these future-focused companies is Atlantis Foundries, which produces automotive castings for the commercial vehicle industry.

Atlantis Foundries’ power purchase agreement with Energy Partners for the Western Cape’s largest embedded generation solar project sets a promising precedent. The CO2 emissions savings from the project are expected to be the highest in the South African auto industry.

While these efforts are laudable and a step in the right direction, 2030 is around the corner, and actionable steps must be taken by more automotive manufacturers and suppliers to accelerate the journey to net zero.

THE EMBEDDED GENERATION ADVANTAGE Embedded generation has emerged as a compelling first step towards achieving decarbonisation targets. In addition to aligning with global sustainability goals, the South African manufacturers that embrace embedded generation bolster their competitiveness on multiple fronts, reducing their dependence on the national power

grid, earning favourable green benefits and positively impacting the bottom line.

The Atlantis Foundries project, which will comprise more than 20 000 ground-mounted solar panels with a total rated capacity of 13.5MW peak, will secure a reliable source of electricity worth more than R35-million per year at current average Eskom tariffs and could replace as much as a fifth of the company’s annual electricity consumption.

Furthermore, as any excess energy generated will be fed into the City of Cape Town’s network, this presents an opportunity to monetise that excess through renewable energy certificates, where for every 1MW hour generated, companies David Masondo can secure between R20 and R40.

Energy Partners’ similar partnerships with South African manufacturers of brake pads, safety belts, dashboard moulds, shock absorbers, filters and rubber indicate that embedded generation is a strategically sound option applicable across the supply chain.

As the 2030 deadline moves ever closer, the automotive industry cannot afford complacency. To achieve net-zero emissions and remain relevant in a rapidly evolving global automotive landscape, South Africa’s automotive industry must embrace embedded generation as an accelerator to a sustainable, competitive and viable future, not just for the sector, but for the country too.

SOUTH AFRICAN MANUFACTURERS THAT EMBRACE EMBEDDED GENERATION BOLSTER THEIR COMPETITIVENESS ON MULTIPLE FRONTS, REDUCING THEIR DEPENDENCE ON THE NATIONAL POWER GRID, EARNING FAVOURABLE GREEN BENEFITS AND POSITIVELY IMPACTING THE BOTTOM LINE.

IMAGES: KAPTNALI/ISTOCKPHOTO.COM, FAHRONI/ISTOCKPHOTO.COM, SUPPLIED

ACCELERATING SOUTH AFRICA’S AUTOMOTIVE INDUSTRY TOWARD NET ZERO

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A DV ER T ORI A L N AT ION A L ME T ROL OGY INS T I T U T E OF S OU T H A F RICA

ACCURACY IS THE CORNERSTONE FOR OPTIMAL OPERATION Accurate measurements are indispensable for reliable monitoring and sustainable control and maintenance of the national power grid, writes NIMSA

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outh Africa has been facing significant challenges with electricity supply for many years, which has resulted in frequent power outages and load shedding. Ageing infrastructure and the growing demand for electricity have exacerbated the problems. The need to implement load shedding to manage the electricity supply and demand imbalance is significantly impacting our households, businesses, and the economy.

The complete electricity value chain, from generation to transmission to distribution and to the customer, is dependent on accurate measurements to operate and function optimally.

If the measurements are inaccurate, the evaluation and control of the electrical energy system cannot be precise. Likewise, energy-efficiency initiatives are also informed and facilitated by accurate measurements. The study of measurement, measurement science, is called “metrology”.

ACCURACY ENSURES CONFIDENCE AND FAIR PLAY The National Metrology Institute of South Africa (NMISA) has technical expertise in electrical measurements to verify, validate, and ensure that electrical measuring equipment and related

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devices are accurate to the highest level, thereby supporting reliable operation and maintenance of electrical systems and fair energy trade/billing.

Accurate measurements are an indispensable link in the value chain, as monitoring and control of electrical systems are always informed and enabled through measurements.

In recent years, the field of electrical precision measurements has received more attention, mainly due to the advancement of science and technology as well as the evolving needs in the electrical industry. The importance of accurate measurements will be amplified in the electricity supply space in the very near future, considering that there will be bidirectional trade of energy where customers who are usually the consumers of energy will also sell back into the grid. As such, both seller and buyer of electrical energy will need to have confidence in the measurements of the energy meters. NMISA ensures that confidence in energy meters through its internationally comparable electrical measurement standards.

THE DANGERS OF INACCURATE MEASUREMENTS NMISA is mandated under the Measurement Units and Measurement Standards Act, No 18 of 2006, to keep and maintain internationally recognised national measurement standards (NMS). NMS have proven traceability of calibration and measurement capabilities to the International System of Units (SI units) in their accredited laboratories. The SI base units include meter, second, mole, ampere, kelvin, candela, and kilogram. Many SI-derived units, for example, volt, watt, and joule, are obtained from the base units.

The NMS are disseminated to industry, for example, the electrical power industry, through calibration of related electrical measuring instruments and devices used in the electricity value chain. Calibration involves comparing (and transferring) the accuracy of a known NMS, which is the reference, to another device. The accuracy and correctness of the electrical measurements obtained through the NMS are essential to

ACCURATE MEASUREMENTS ARE AN INDISPENSABLE LINK IN THE VALUE CHAIN, AS MONITORING AND CONTROL OF ELECTRICAL SYSTEMS ARE ALWAYS INFORMED AND ENABLED THROUGH MEASUREMENTS.

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N AT ION A L ME T ROL OGY INS T I T U T E OF S OU T H A F RICA A DV ER T ORI A L

to standards and regulations cannot be verified. Thus, accurate measurements are the cornerstone of proper operations in the electrical power industry and, by extension, in every facet of our daily lives, such as health and safety, manufacturing, environmental protection, and energy security, among others.

CALIBRATION AND MEASUREMENT SERVICES

Images: Supplied

To this end, within the electrical industry, NMISA promotes and supports the accuracy of electrical measurements that satisfy the relevant technical specifications of the respective electrical measuring instruments and devices by performing internationally comparable calibrations. NMISA offers calibration and measurement services in a wide scope of electrical quantities for the electrical industry as depicted in Figure 1.

These services are provided through calibration with high-end NMS, equipment and systems that are regularly compared against international measurement standards.

all stakeholders, such as energy producers, transporters, distributors and consumers, as well as for the reliable operations of the electrical power systems.

There are several consequences of inaccuracy, for example: • If measurements are inaccurate (for example, in metering systems), then fair trade is inhibited since the billing is not trustworthy.

• If power quality measurements are inaccurate, dirty power can enter the grid and cause instabilities.

• If a sensing element in the electricity network is not operating accurately, important warning information on the state of a network structure may be missed.

• If boiler temperature is not accurately measured, then the control of the boiler flow temperature cannot be correct and energy efficiency can be compromised.

Ultimately, if measurements are not accurate, then monitoring and reliable control cannot happen, and proper maintenance or operation of systems can be compromised. If measurements are inaccurate, operation of instruments and systems within the allowable limits according

Figure 1. NMISA electrical quantities and traceability path to industry equipment

Some of the industries served by the NMISA electrical laboratories include energy meter manufacturers, power utilities, electrical component manufacturers, municipalities, and accredited laboratories.

The NMISA electrical laboratories perform calibrations and measurements that verify if electrical measuring instruments and devices operate within the relevant technical specifications, national and international

Power and energy measurement system.

regulations, and related codes of practice in the electricity industry. Furthermore, NMISA has technical experts who provide relevant measurement expertise and consultation relating to electrical measurements, calibrations, and test equipment.

RE

AD MORE

For more information: info@nmisa.org |

www.nmisa.org

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F UNDING

UNLOCK CLEAN ENERGY CAPITAL

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frica houses nearly a fifth of the world’s population, but attracts only two per cent of global clean energy investment.

This funding discrepancy not only hinders the continent’s potential for sustainable energy, but also leads to elevated capital and borrowing costs, driven by perceived economic and social risk.

The opportunity to innovate and think beyond traditional funding models to bridge this gap is significant. For example, by working with the right partners with deep renewable energy industry expertise, local and global corporations can direct budgets allocated for environmental, social and governance (ESG) efforts or corporate social investment (CSI) towards funding renewable energy for organisations and institutions that need reliable and affordable electricity.

Global independent power producers (IPPs) looking to expand their portfolios geographically present another undertapped opportunity for funding, which can be unlocked via the right Saul Wainwright on-the-ground partner.

LEVERAGING PARTNERS An example of this collaborative model is the solar-plus-battery storage plant powering High Technical School (HTS) Drostdy in Worcester.

The plant was funded by CVE, an international IPP, in partnership with Sun Exchange, a company that connects corporate funders with vetted, high-impact solar project opportunities and manages the development, installation and maintenance of the projects.

By funding HTS Drostdy’s solar project, CVE unlocks sustainable energy for education in South Africa while creating an alternative income stream for its business over the 20-year lifespan of the project.

The plant boasts 470kW of solar power and 700kW hours of battery storage. Valued at R20-million, it will supply half of the school’s power in the form of clean energy and provide essential backup energy, greatly reducing the

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ENERGY

impact of load shedding on teaching and learning for the school’s 60 teachers and 1 053 students.

By leveraging partners with the right local knowledge, experience and networks in renewable energy, corporations and IPPs, such as CVE, can tap into smaller, diversified, derisked projects that align with corporate ESG, CSI and investment objectives. Rather than concentrating capital in a single large project, corporations can own parts of projects across various verticals, thus spreading risk and ensuring a steady, long-term income stream from their solar assets.

MANAGING RISK AND IMPACT For this model to succeed and maximise impact, several important considerations around risk and bankability must be taken into account and carefully managed, especially considering that foreign corporations may be more risk-averse and sensitive to currency fluctuations.

• Risk management: funders seek projects with a strong risk profile across their portfolio, where the payment default rate is low.

While this can be a challenge, particularly in developing economies, it’s achievable with robust and transparent due diligence conducted with the right set of deep, on-the-ground expertise. A diversified portfolio of solar projects across sectors and geographic regions also mitigates risk.

• Quality of build and engineering: solar facilities must endure and operate optimally for at least two decades. A cautious approach that includes additional precautions and redundancy leads to robust construction and reduced risk. Only contractors with extensive experience should undertake these projects.

• Deal structures and tax implications: the 12B tax benefit is a major incentive for almost all South African companies, and therefore the right deal structure is essential to maximise tax benefits.

• Context and climate: real-world conditions such as load shedding and climate should be factored into economic models to determine how solar plant performance can be impacted over time.

• Measuring social and environmental impact: beyond financial returns, corporate investors are increasingly focused on the measurable social and environmental impacts of projects, especially when remotely solar powering schools, retirement homes and farms. For each project, direct and indirect impacts should be monitored, including carbon reductions, beneficiaries and monetary savings for the energy consumer.

INNOVATIVE FUNDING Innovative finance models that bring corporations and IPPs with capital together with bankable project pipelines and energy consumers can play a pivotal role in addressing South Africa’s substantial renewable energy funding gap and that of the entire continent.

Despite challenges, these models, unlike traditional financial instruments, provide a flexible and diversified approach to renewable energy funding, aligning with corporate objectives while advancing sustainability and economic growth.

Sufficient capital is available for a clean energy transition; what we need are innovative risk approaches to develop bankable models that deliver results.

Sun Exchange solar power at schools WATCH

CORPORATIONS CAN OWN PARTS OF PROJECTS ACROSS VARIOUS VERTICALS, THUS SPREADING RISK AND ENSURING A STEADY, LONG-TERM INCOME STREAM FROM THEIR SOLAR ASSETS.

IMAGES: APICHAT NOIPANG/ISTOCKPHOTO.COM, SUPPLIED

Corporate funds can go a long way towards financing important renewable projects in South Africa, writes SAUL WAINWRIGHT, CEO of Sun Exchange

IN V ES T MEN T

CHINA AND SA FORGE ENERGY DEVELOPMENT PARTNERSHIP As the country continues to buckle under the pressure of ongoing load shedding, a BRICS agreement offers the potential of light at the end of the tunnel. By RODNEY WEIDEMANN

THE EQUIPMENT Included in the equipment donated to be used to power major public facilities are: • Solar photovoltaic panels • Batteries • Inverters • Generators.

FUNDING, SKILLS AND OPPORTUNITY

Minister Kgosientsho Ramokgopa signs a Joint Memorandum of Co-operation with Chinese entities on behalf of the South African Government in Sandton City, Johannesburg.

IMAGES: GCIS, SUPPLIED

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POWER IS A NECESSITY

One cannot drive digital transformation and an inclusive economy without the energy necessary to keep it operational, says Vino Govender, head of strategy at Teserohub, which provides power infrastructure for mobile operations.

“Remember that, today, the cloud is touted as a key driver of economic inclusion, but without power to your data centre, the cloud cannot work,” says Govender. “This demonstrates how critical power is to everything else we hope to achieve as a nation.

“We should be excited by this news, as any possible opportunity to augment our energy capacity should be grabbed with both hands.”

Govender notes further that the donated equipment will be used to boost critical public services, providing backup power to clinics, schools and police stations.

This reiterates what Ramokgopa noted at the signing when he pointed out that the equipment will help relieve the load on the national grid because the facilities will use alternative energy sources, relieving the degree of load shedding.

“That we’re going to ensure that over 400 facilities have an uninterrupted supply of energy – receiving power from alternative sources of renewables – means there is less demand on the grid, and we’ll be able to redirect that power,” Ramokgopa said.

Power is critical to economic wellbeing, especially in developing a digital economy.

THE EQUIPMENT WILL HELP RELIEVE THE LOAD ON THE NATIONAL GRID BECAUSE THE FACILITIES WILL USE ALTERNATIVE ENERGY SOURCES, RELIEVING THE DEGREE OF LOAD SHEDDING.

he recent announcement by electricity minister Dr Kgosientsho Ramokgopa of a framework agreement on co-operation in green energy, signed with his Chinese counterpart at the recent BRICS meeting, offers hope to a nation reeling under load shedding.

Media reports indicate that the Chinese commitment to South Africa encompasses over R500-million worth of equipment and energy assistance. A donation of emergency power equipment worth around R167-million will be offered to alleviate our country’s electricity generation challenges. This is expected to be used to power major public facilities, such as hospitals, clinics and correctional services.

In addition, China has pledged approximately R500-million in energy development assistance.

South Africa’s biggest trading partner has also agreed to help the country improve its ageing coal-fired electricity generation units and expand its transmission lines.

Vino Govender

Govender believes that as long as the funding received is well directed, it will be of enormous value to the public service. “Tight control measures and thorough transparency around the disbursement of these funds are needed. Ideally, we want a full audit trail for the money’s use and the deployment of the funded infrastructure, along with continuous monitoring to ensure it remains effective and operational.”

It is important to ensure that full value is extracted from these implementations, says Govender. “By that, I mean governance needs to be strong, as there must be no overpayment for services or price gouging by providers.

The tender process must be transparent and defined by market-related ranges within which such projects normally happen.”

Asked about concerns around China bringing its own people in to work on this, thereby impacting job creation, Govender explains that – especially in the renewables sector – South Africa has critical skills shortfalls. Eskom has admitted to shortages of skilled engineers, so there should be no problem with bringing in foreign expertise, provided skills transfer forms a part of the contract. “I don’t view this as a threat, but rather an opportunity to boost our local skills and competencies in this field.”

Govender acknowledges that, undoubtedly, our current power challenges create uncertainty.

“And it is very tough to run a business based on uncertainty. On the other hand, if you can ensure power access, you can always run your business more effectively. This alliance is vital, as it will reduce uncertainty, which may otherwise cause ripple effects throughout the entire energy ecosystem, from the supply chain to the end customer. It is my view that any initiative to speedily augment and deliver energy capacity has to be viewed from the perspective of opportunity, rather than as a threat,” he concludes.

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THE STATE OF SOLAR Amid continued load shedding and electricity price hikes, DR RETHABILE MELAMU, CEO, and DE WET TALJAARD, technical specialist at the South African Photovoltaic Industry Association, explore contemporary trends in solar energy

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IMAGES: NEWSAETIEW/ISTOCKPHOTO.COM, SUPPLIED

he South African Photovoltaic Industry Association (SAPVIA) estimates that the installed solar photovoltaic (PV) capacity exceeded 1GW for the first time in 2022.

In addition, there has been substantial growth in private-sector projects registered with the National Energy Regulator of South Africa, with approximately 3GW of private projects across all technologies registered since 2018.

Solar PV dominates these projects, with a 78 per cent share, and the highest concentration of solar projects is in the Northern Cape, Free State and the Northwest.

Growth in the last year has been notable. In just the first two months of 2023, the number of registered projects increased by 56 per cent, from 1 897MW to 2 970MW – an increase of 1 073MW, equivalent to one stage of load shedding.

The first projects above the 100MW threshold were registered in February. Three of these were solar PV, with Dr Rethabile Melamu a combined capacity of 552MW. This was enabled by the removal of the generation licencing threshold, announced late last year.

We expect sustained growth, especially in the private sector, where investment in utility-scale renewable energy projects both for direct consumption, in other words, behind the meter or embedded generation, and for wheeling, where generation and consumption are at two different sites. For instance, Sasol

recently announced the development of 220MW of large-scale wind energy generated in the Eastern Cape and wheeled to Sasol in Secunda, in an effort to decarbonise its operations.

REACHING MATURITY Solar PV technology has reached some level of technical maturity in the last couple of years.

As such, recent innovations have focused on reducing reliance on rare earth and scarce elements (especially silver) in the production process and on the efficiency and power output gains of solar PV modules.

Power ratings of commercial solar PV panels have essentially doubled in the past three to four years, with a footprint of approximately 2.2m2 now yielding around 700W. This can be attributed to innovations in both the solar cell configurations and the materials used in the module construction. The two main areas of innovation involve heterojunction cell configurations and TOPCon (tunnel oxide passivated contact) cell technology.

Bifacial solar panel technology has seen innovation in recent years, as evidenced by the increased ratio of new-build utility-scale plants employing the technology. Bifacial panels allow energy production to take place from sunlight hitting both the front and rear of the panel, resulting in an efficiency and power gain of approximately 10 per cent.

The largest innovation in solar energy, however, is currently happening in the area

of energy storage. Given that renewables are weather-dependent by nature and thus intermittent, the ability to store energy at scale has always limited the extent of their adoption.

The emergence of cost-competitive grid-scale storage, such as vanadium redox flow batteries (VRFB) and lithium-ion phosphate batteries, has made renewables competitive compared with traditional and carbon-intensive “base load” technologies.

We’ve also observed innovative application of solar PV technology for mixed use in the last couple of years, from building-integrated solar PV panels to agri-voltaics – the combination of large-scale agriculture and solar PV installations.

The symbiotic relationship between solar PV and agriculture is receiving increasing attention among international researchers and has been shown to decrease water consumption by approximately 20 per cent.

LOCAL INNOVATIONS The local energy-storage industry is at the cutting edge of global innovation, specifically regarding VRFBs. Local entity De Wet Taljaard Bushveld Minerals is at the forefront of VRFB innovation.

Fortunately, South Africa is blessed with local vanadium deposits to exploit for local use and potentially for export.

Local innovation is also taking place in the funding models of solar PV systems, with myriad options available to end users of residential and commercial systems. Residential users can take advantage of traditional finance options in the form of loans, access bonds and solar-specific finance products, while nontraditional options, including rent-to-own and solar-as-a-service, are increasingly making solar energy accessible to a larger portion of the South African population.

Unfortunately, these funding models have not yet found a way to serve low-income households.

The personal tax incentive announced in the 2023 budget speech and feed-in tariffs for excess energy produced and fed back into the grid could further improve the adoption of residential solar PV. However, these incentives still leave a huge segment of low-income South African residents energy insecure.

BIFACIAL SOLAR PANEL TECHNOLOGY HAS SEEN INNOVATION IN RECENT YEARS, AS EVIDENCED

BY THE INCREASED RATIO OF NEW-BUILD UTILITY-SCALE PLANTS EMPLOYING THE TECHNOLOGY. ENERGY

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CHOOSING THE RIGHT SOLAR SUPPLIER Going solar is rapidly becoming a business imperative and an increasingly affordable one, writes JACO BURGER, head of corporate venturing at Standard Bank

potentially causing damage to such equipment at both ends of that spectrum.

HYBRID SOLUTIONS The most common solar PV installation in the commercial and industrial sectors is a hybrid system, which uses PV panels to generate electricity to power a building or plant, with or without battery storage. The system intelligently switches between solar power, battery storage and grid power, depending on levels and availability, to supplement energy requirements.

When grid power is available, the inverter connects the business to the grid. The PV panels charge the batteries when sufficient sunlight is available, so when the grid isn’t supplying electricity, the inverter switches to battery storage until grid power is restored.

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ith power stations continuing to break down or being decommissioned and supply from Eskom remaining on a downward trajectory, load shedding is here to stay. The Eskom fleet’s energy availability factor declined from 65 per cent in 2020 to 58.1 per cent in 2022, according to the Council for Scientific and Industrial Research.

Then, load shedding hours in 2023 surpassed the 2022 total (our greatest ever up to that point) in its first quarter.

Since most areas in South Africa average around 2 500 hours of sunshine annually, we can generate tremendous amounts of sustainable energy by implementing a long-term solution based on this freely available resource.

Many businesses would prefer to manage their energy security without relying on the grid, but cost remains a challenge, despite solar photovoltaic (PV) power being the most cost-efficient power generation option in the world.

POWER OF THE SUN A study of Eskom’s figures by Professor Anton Eberhard, who runs the advisory board of the Power Futures Lab at the University of Cape Town’s Graduate School of Business, estimated that the country’s installed solar rooftop PV

capacity grew from 983MW in March 2022 to 4 412MW in June 2023 – an increase of 349 per cent in just over a year. To put this into perspective, Eskom’s generation division has 15 coal-fired power stations with an installed capacity of 44 01MW when operating at 100 per cent capacity – so the amount of installed rooftop PV as of June is equivalent to nearly 10 per cent of Eskom’s maximum output.

We also don’t have to rely solely on solar PV, as South Africa has immense opportunities in the green hydrogen space. The Northern Cape, in particular, has abundant resources for generating green hydrogen in large quantities: great solar and wind resources, plenty of land, and eagerness from national and provincial government to make moves.

Solar is definitively cheaper than buying electricity from Eskom or a municipality, or producing it via a diesel generator. The value of continuity – being able to continue running critical components of a business under battery power when grid power isn’t available – is quantifiable. A solar PV installation delivers a quality of power that the grid can’t, which is particularly important when operating sensitive equipment. Eskom and municipal supply fluctuates between 160 and 260 volts,

A SOLAR PV INSTALLATION DELIVERS A QUALITY OF POWER THAT THE GRID CAN’T, WHICH IS PARTICULARLY IMPORTANT WHEN OPERATING SENSITIVE EQUIPMENT. 24

When considering a solar PV installation for a business, there are many critical factors to consider, from scale, scope and use case to roof structure. The complexity of the decision-making process and the pressure on South African businesses to reduce their dependence on an unstable national grid led Standard Bank to develop a digital solution for solar projects.

PowerPulse offers expert industry analysis and personal concierge support, from needs analysis to installation, at no cost, enabling a business to engage with accredited energy solution providers to deliver cost-saving and sustainable energy solutions.

The platform generates a feasibility report in response to some basic inputs and connects businesses with three accredited, vetted industrial solar PV solution providers who will perform a site inspection and provide an energy solution. A comparison report outlines the three proposals across standardised fields to help compare options, line by line.

Once the business has approved the business case and decides to proceed, businesses can access finance from Standard Bank to help them complete the installation and secure their energy requirements.

Solar installations aren’t a silver bullet for energy autonomy, but they do significantly decrease unit costs and allow businesses to hedge against steep increases in Eskom-generation tariffs over their projected 25-year lifespan – which should make them immensely appealing to any business.

IMAGE: ANTONIO SUAREZ VEGA/ISTOCKPHOTO.COM

SOLAR PV FOR BUSINESS

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S OL A R

wheelie bins out overnight. There are also locks one can install on solar panels to make them more difficult to remove. Microdots and small transmitters can be installed on panels to aid in tracking, but this sadly doesn’t prevent them from being stolen in the first place.

CHECK YOUR INSURANCE

SECURING

YOUR SOLAR PANELS Increasing demand for solar panels is driving a growing black market, writes ANTHONY SHARPE

IMAGE: SUNAN WONGSA-NGA/ISTOCKPHOTO.COM

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merican engineer, inventor and businessman Charles Kettering once said: “There exist limitless opportunities in every industry. Where there is an open mind, there will always be a frontier.” South Africans have certainly had to keep an open mind when it comes to living with load shedding, which is in no danger of receding soon.

We safeguard our appliances with surge protectors, keep our internet connections going with uninterrupted power supplies, screw in rechargeable lightbulbs and, if we can afford to, bedeck our rooftops with solar panels to harvest the sun’s rays. Given how abundantly those rays fall on South Africa and how significantly the prices of the components have fallen, it’s perhaps unsurprising that imports have skyrocketed.

Unfortunately, criminals in South Africa have an equally open mind when it comes to the opportunities that the burgeoning solar panel industry presents, so it’s perhaps equally unsurprising that solar panel theft is also on the rise to feed a growing black market. Marius Steyn, personal lines underwriting manager at Santam, says the insurer has seen a notable uptick in claims for stolen solar panels from home and business owners.

Ironically, the very problem that these panels are intended to address makes it easier for

FAST FACT

South Africa imported R12-billion worth of solar panels in the first half of 2023, more than double the total imports for 2022 (R5.6-billion).

Source: Gaylor Montmasson-Clair

them to be stolen, with criminals targeting empty houses in dark neighbourhoods, using simple tools to remove the panels from the roof.

There have even been reports of syndicates dressed as maintenance or installation crews operating during daylight hours too.

PREVENTATIVE MEASURES South African criminals are industrious, so you have to be particularly vigilant in preventing them from stealing your solar equipment.

Fidelity Services Group advises keeping your property as well-lit as possible, cutting away excess shrubs and hedges that might conceal thieves, locking away garden equipment and other tools, keeping alarms on and not leaving

As much as prices have dropped, comprehensive solar installations remain expensive and need to be insured as part of your household. “Solar power systems are fixed to a property – they form part of a homeowner’s building insurance cover,” advises Steyn. “South Africans who have upgraded their properties with a solar system are advised to contact their insurer and increase their insured building insurance sum to cover the cost of the installed solar assets. If the building’s insured value doesn’t match the replacement value, the owner might find themselves underinsured and their claim may not be fully paid out.”

Steyn says presently, no additional premium is attached to solar installations. However, he adds, with them being such an attractive target for criminals, this could be expected in the future.

THE RIGHT PEOPLE FOR THE JOB The growing theft associated with solar panels has given rise to suspicions that some of the crews installing them may be stealing them back. To mitigate such a risk, Steyn advises that property owners look for credentials such as references of previous work and how long the business has been operational. “A trustworthy installer should give you a detailed estimate that explains exactly what they will do, what materials they will use and, most importantly, what support and guarantees they’ll provide after the installation is complete.”

An installer should also warn you about any possible problems that could affect the installation and performance of the solar power system before they start, adds Steyn. If your building is damaged as a result of installation, the installer’s all-risk insurance policy should take care of it.

A responsible contractor will inspect the roof and rafters of your building before installing the solar panels to ensure they are structurally sound.

To register your solar system with the municipality, Steyn advises that you need a certificate of compliance, which a reputable installer will provide upon installation.

“Solar power systems are fixed to a property – they form part of a homeowner’s building insurance cover.” – Marius Steyn ENERGY

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L OA D SHEDDING

FAIL TO PREPARE, PREPARE TO FAIL No business can afford to not prepare for the consequences of escalated load shedding or grid collapse, writes TREVOR CRIGHTON

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Eskom protects the system from collapse by implementing load shedding when the grid is threatened, but an unanticipated breakdown of multiple generation units or widescale transmission faults could overwhelm the system and cause it to shut down entirely.

Recovering from a total blackout would take anywhere between days and weeks, as each of Eskom’s power stations would have to be started up individually and synchronised with the running stations, balancing their supply to the grid before the next unit is introduced. If the grid were to become imbalanced, it would likely fail again and the process would have to be restarted. Many days of economic activity could be lost before full electricity supply is recovered.

skom’s latest load-shedding code of practice, approved by the National Energy Regulator of South Africa and published in September, includes up to 16 stages of load shedding – the highest involving 24 hours of power cuts in a 32-hour cycle. The motivation for adding more stages is to establish a clearly defined code of practice should more power plant units fail.

Load shedding aims to prevent the grid from being overwhelmed and failing, causing a complete regional or national blackout.

Nevertheless, this eventuality is something for which business needs to be prepared.

Any responsible organisation operating in South Africa needs to plan to manage communication around these critical events to ensure the safety of the business, its people and its customers.

collapse, but understands that it can be difficult to plan for an event where no one is sure what the state of play will be. “If the grid collapses – for the record, I don’t think it will – a business can stockpile diesel for generators, but will they need two days, two weeks or two months’ worth? If that runs out, how long will it take for service to be restored so that you can purchase more?”

He says one thing that isn’t well understood is that if there’s a widespread grid failure for three to five days, everything will be affected.

No power means no traffic signals, no fuel for transport, no payment mechanisms outside of cash and no communication for starters.

“Even if your organisation has plans for business-as-usual, that ‘usual’ ends outside the doors to your building, and there are many variables that will cause challenges – and potentially risk the country’s stability.”

CONCERN, NOT ALARM

WHAT CAN YOU DO?

Prof Wikus van Niekerk, dean of engineering at Stellenbosch University, says that the publication of the extended stages of load shedding needn’t cause additional concern because the plan puts in place guidelines to deal with further failures in supply. “Very few people properly understand Eskom’s supply challenges, mainly because the situation isn’t well defined and it’s also fluid.”

Prof van Niekerk believes that organisations need to be prepared for extended stages of load shedding (which may be sustained) and even grid

The success of any plan for extended, sustained load shedding or grid collapse has reputational and operational impacts.

Should load shedding escalate rapidly, time will be of the essence, and communicating clearly with internal teams and clients will be a challenge, so the best way to communicate is by having

Source: Prof Wikus van Niekerk

pre-prepared plans and pre-populated messages and knowing which platforms to use to distribute them. Cellphone tower batteries generally last about three hours during an outage, so texts or emails will have to go out quickly and with the hope that recipients have charged their devices or have access to backup power.

A clear chain of command and standard operating procedure is also required.

“After communicating plans to staff and customers, the next concern for any business is safeguarding their people and securing their premises and infrastructure,” says Prof van Prof Wikus van Niekerk Niekerk. “Tell your teams to get home as quickly as possible or stay where they are until it’s safe because July 2021-type anarchy shouldn’t be ruled out.

COVID-19 lockdowns may have prepared us for having key staff on site while the rest work remotely to sustain a business – but during that period, there was electricity.”

“IF THERE’S A WIDESPREAD GRID FAILURE FOR THREE TO FIVE DAYS, EVERYTHING WILL BE AFFECTED.” – PROF WIKUS VAN NIEKERK

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ENERGY T R A NSI T ION

POWERING SOUTH AFRICA’S ENERGY TRANSITION A successful just energy transition depends heavily on public-private sector and collaboration and sound policy, writes PIERRE HERBEN, group head of carbon neutrality and innovation at Anglo American

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enewable energy access is fundamental to supporting inclusive growth, livelihoods and better health outcomes in the future. Moreover, it must be harnessed now if the country is to escape the grips of the current energy crisis.

Last year’s introduction of an “unrestricted” licensing threshold for energy projects was a welcome intervention. Equally, plans to update the Integrated Resource Plan and review existing limits on local embedded generation procurement will unlock the potential for rapid expansion of power generation capacity, while policies to enable the energy transition are being addressed by the National Energy Crisis Committee.

However, the wheels of government must now turn faster – beyond the energy crisis and towards an energy transition that provides security for growth and prosperity in the long term.

According to an Economist Impact report, Powering Progress: Policy shifts and economic frameworks to enable South Africa’s energy transition, only well-co-ordinated, progressive and fundamental changes to the country’s energy mix will provide the best route to a prosperous, low-carbon and energy-secure future.

A critical area needing urgent focus remains grid development, access and connectivity.

This is a crippling issue, as some 6.3GW of renewable energy capacity procured by government through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) could not find grid

access, and a further 7.4GW of renewable energy procured from the private sector could not be allocated (under REIPPPP Bid Window 6) due to unavailable grid access. According to research commissioned by the National Business Institute, at least 190GW of renewable energy is needed by 2050 to decarbonise the power sector and realise South Africa’s low-carbon ambitions.

There has never been a more important time for developing public-private partnerships between the government and business, marrying private-sector financing and technical expertise with efficient and simplified government processes to develop much-needed grid connection capacity. This is especially true in areas such as the Northern, Eastern and Western Cape, which stand to enable the delivery of world-class, utility-scale renewable energy resources.

This decentralisation of energy resources across the country will have several advantages. It will enable access to affordable electricity, build more resilient and energy-secure communities, enable physical and digital infrastructure improvements to meaningfully reduce inequality, and contribute to a business operating environment suitable for attracting investment and economic growth across the country.

LEAVE NO ONE BEHIND

Achieving this level of energy transition will entail transformational and systemic change, which no individual, company or entity can deliver alone. Given South Africa’s dependence on fossil fuels, shifting to a low-carbon future presents opportunities and risks for those reliant on carbon-intensive industries.

PARTNERING FOR CHANGE For this reason, a pathway The mining industry has already to a successful energy started doing its part to answer transition must ensure that the call for clean energy with people and communities a pipeline of over 6.5GW of dependent on these industries sustainable energy projects. are not left behind.

At Anglo American, together According to the Economist with our partners at EDFR, we Pierre Herben Impact report, as many as a have created Envusa Energy, million jobs could be generated which is set to deliver a 3–5GW through renewable energy projects by 2050, renewable energy ecosystem across South more than three times the number of jobs Africa. This ecosystem will not only meet Anglo possibly at risk in the transition.

American’s decarbonisation needs, but also Realising this will require unprecedented help support economic development within levels of engagement and collaboration South Africa’s renewable energy sector, driving between government, communities, civil the country’s broader just energy transition. society, labour and business. Working together, Across many other industries, companies are a just transition can be reached by building up on the same path, signalling a commitment to people’s resilience through progressive skills making the energy transition real and inclusive. To development and job opportunities created by support this future growth, greater grid availability access to affordable, decentralised and diverse will be critical to delivering renewable energy renewable energy – especially in secondary and projects for public and private investments. tertiary industries.

By moving decisively to address gaps across the country’s energy landscape, South Africa can begin laying the foundation for a sustainable and inclusive energy future.

A JUST TRANSITION CAN BE REACHED BY BUILDING UP PEOPLE’S RESILIENCE THROUGH PROGRESSIVE SKILLS DEVELOPMENT AND JOB OPPORTUNITIES CREATED BY ACCESS TO AFFORDABLE, DECENTRALISED AND DIVERSE RENEWABLE ENERGY.

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Aerial view of the Koeberg plant, 26kms north of Cape Town city.

THE KOEBERG CONUNDRUM The costs of refurbishing Eskom’s ageing Koeberg power plant may be vastly underestimated, posing a threat to the economy, writes energy activist PETER BECKER

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s refurbishing Koeberg worth it? This seemingly simple question requires considering some complex issues, not least of which is what the work is actually going to cost at the end of the day. Eskom is clinging to its claim that the project cost is R20-billion, as was estimated in 2010. However, it is becoming more apparent how unlikely this is to be true.

Koeberg is a two-reactor plant that was designed to last 40 years and first produced electricity in 1984. The second unit came online in 1985. The plant operates under a licence from the National Nuclear Regulator (NNR), which expires in July 2024, but Eskom has requested that the NNR alter the licence to allow unit two to operate under the current licence for 40 years from 1985, in other words until 2025.

Eskom, the Department of Mineral Resources and Energy (DMRE) and Minister Gwede Mantashe have long declared their intention to extend the life of the plant, and Mantashe’s

2019 performance agreement with President Ramaphosa even included this life extension as a key performance indicator. This has led to an interesting conflict of interest, but that is beyond the scope of this article.

Eskom has applied to the NNR for permission to operate the plant for an additional 20 years, but this has not been granted so far. Extending the life of a plant constructed in the 1970s using a 1960s design is a complex challenge, and a long list of components will need to be replaced before the NNR will grant a life extension.

Among these are the six steam generators (three per unit), which fall under the Steam Generator Replacement (SGR) project. There is frequent confusion in the media, along with obfuscation from Eskom, that conflates the SGR project with the full-life extension project.

This allows Eskom to quote the cost of the SGR, leading the public to interpret that as the cost of the full-life extension project, thereby hiding the rest under operational costs in the form of maintenance.

EXTENDING THE LIFE OF A PLANT CONSTRUCTED IN THE 1970S USING A 1960S DESIGN IS A COMPLEX CHALLENGE, AND A LONG LIST OF COMPONENTS WILL NEED TO BE REPLACED BEFORE THE NNR WILL grant A LIFE EXTENSION. 30

TALLYING THE TRUE COST So what is the actual cost of the life extension?

This is a difficult question to answer, given the lack of transparency from Eskom on the subject. Despite 13 years having passed since the R20-billion estimate, the utility alternates between insisting that costing is still valid and begrudgingly admitting at a 2022 presentation to parliament: “The original cost estimate of R20-billion was done in the 2010 parameter [sic]. If reassessed in today’s values, it would be significantly different”.

Obviously, a R20-billion job in 2010 cannot cost R20-billion in 2023. Inflation alone would have brought that figure up to approximately R39-billion. Moreover, if the original costing was in dollars at an exchange rate of R7.50 in 2010, that would be R71-billion in 2023 rands with today’s exchange rate of R19 to the dollar, including inflation Peter Becker in the United States.

There is more. Eskom originally announced that five months of work would be needed on each unit for the life extension. Currently, the estimate from Eskom is 18 months per unit, and that is constantly being adjusted upwards. If a five-month job takes 18 months, logic dictates

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that the labour and management costs must have increased by about three-and-a-half times the original estimate.

UNDER DISPUTE

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There have also been some widely published claims against Eskom by contractors and sub-contractors working at Koeberg. In one case, due to the aborted first attempt at the life extension work on unit two, Framatome claimed R1.1-billion and later settled for R950-million.

What is less widely known is that there are currently over 200 outstanding disputes about claims, but no publicly available information about the totals of these claims. Such contractual claims provide a rich opportunity for co-operation between the various layers of contractors, including “coaching” on how to frame such claims to maximise the contractors’ financial advantage and milk Eskom for as much as possible.

Finally, large Eskom projects are renowned for overruns, and it is not unusual for a complex project to end up costing three times the original estimate, even without a 12-year delay before the commencement of work.

Adding all these escalations together means that the actual cost of the attempt at extending the life of Koeberg could come in at R160-billion.

This is, of course, a guess, but the best estimate we have, given the lack of clarity on the matter.

Even the new electricity minister, Dr Kgosientsho Ramokgopa, said he was “none the wiser” after visiting the plant and attending a long presentation on the reasons for the escalations.

What could have been achieved in South Africa with whatever the total cost turns out to be?

Strengthening the grid, a much-needed step to cater for new planned generation capacity, is the first thing that comes to mind.

Aerial image from 2018 showing rust and spalling of the unit 2 containment dome.

A dummy fuel assembly in the visitors’ centre at Koeberg.

IMPACT OF MAINTENANCE OUTAGES Quite apart from the costs to Eskom, which will ultimately be recovered from electricity consumers, there is the issue of damage caused to the economy by load shedding. The root cause of load shedding is obviously a lack of planning by government and, in particular, by the DMRE. However, given the fact that there has been, and will be, constant load shedding while the Koeberg units are taken offline for the life extension work, when one of the 920-megawatt units is unavailable this directly causes one extra stage of load shedding. The Council for Scientific and Industrial Research has calculated that each kilowatt of electricity not supplied costs the economy R87. A simple arithmetical calculation shows that 18 months of outages for each unit of Koeberg will result in a staggering total of an extra R1.8-trillion damage to the economy.

But Koeberg is needed because of the electricity crisis, isn’t it? That is an overly simplistic question that needs to be unpacked. It is not a question of if; it is a question of when. The two units could have been left running till mid-2024 and mid-2025 respectively, then shut down as planned. Instead, Eskom chose to take each unit offline for long outages while attempts were made at refurbishing them in the hope that the NNR would grant a life extension.

At the same time, a massive amount of new capacity is planned to come online over the next few years as government has gradually been accepting that fixing the coal fleet to get it up to 75 per cent energy availability factor is an impractical plan. The presidency projects that collectively, new projects and demand management will add over 20GW by 2025 and, from ministerial determinations alone, 28GW is planned to be online by 2030. If this capacity

materialises, the paltry 2GW that Koeberg could provide will rapidly fade into insignificance.

Now, at the height of the load shedding crisis, we need every megawatt we can get. Yet Eskom decided to take the Koeberg units offline when they were most needed to try to have them available when they will not be needed at all.

South Africa is now on the brink of facing the consequences of another decision at Koeberg.

Eskom has announced the intention to take unit two offline in early November for another outage of at least 200 days. Given that load shedding will be a reality over that entire period, going ahead with this will add one extra stage of load shedding at an additional cost to the economy of around R350-billion. This economic damage to South Africa far outweighs the engineering costs to Eskom. Now more than ever, it is time for decisive political leadership to override the narrow thinking within the parastatal, and make a decision about Koeberg that aligns with the interests of the country as a whole.

For further detailed analysis, see the Koeberg Alert Alliance website at koebergalert.org.

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MDA AT T ORNE YS A DV ER T ORI A L

INTERFACE AGREEMENTS IN IPP PROJECTS Be wary of employer indemnities, writes NATALIE REYNEKE, director, MDA Attorneys

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contractor pays these costs – subject to the liability cap in the contract. This appears to be a similar concept to the indemnity provided in the EPC contract.

It is easy to see why employers and financiers would prefer to place risk in the laps of each of the contractors. Contractors can limit their exposure by creating a new liability cap in respect of additional costs. If this would be accepted by the employer and/or financiers remains to be determined. That is the beauty of negotiation!.

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DESIGN AND CONSTRUCTION CONTRACTS REQUIRE CO-OPERATION WITH OTHER PARTIES.

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As specialists in construction law, MDA Attorneys scrutinised several sample contracts: the EPC contract (a bespoke contract loosely based on the FIDIC EPC contract), the FIDIC contract and the NEC3 contract.

Construction contracts contain a limitation of liability, which caps the contractor’s overall liability under the contract. The exclusions from the cap are usually indemnities given by the

Natalie Reyneke

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INTERFACE AGREEMENTS CHANGE A CONTRACTOR’S RISK PROFILE

contractor to the employer in respect of claims for bodily injury, death, property damage, breach of intellectual property rights, breach of laws and, in the case of fraud, deliberate default or reckless misconduct by a defaulting party. The remaining liability of the contractor is capped at an agreed percentage of the contract price.

The EPC contract sought to claim additional costs (reasonable and proven direct costs) from the contractor, including variations or payments to other contractors, if these costs arose due to the contractor’s failure to meet certain co-operation or interface obligations, evidenced by a failure to achieve certain milestone dates.

The requirement was a full indemnity given by the contractor to the employer regarding these additional costs and costs incurred in mitigation of adverse impact caused by the contractor’s failures. These additional costs were payable in addition to delay damages. Unlike the usual instance where liability under the indemnities is uncapped, in the EPC contract we scrutinised, this particular indemnity was included in the liability cap. As a result, additional costs payable by the contractor (which are akin to consequential losses) are subject to the liability cap. Therein lies the rub – the liability cap may be 100 per cent of the contract price.

If delays caused by the contractor lead to delay damages subject to their own cap of say 10 per cent of the contract price, the inclusion of the additional costs payable in addition to the delay damages means that the contractor is at risk of performing works for free. While unlikely, it is not impossible, given that the contractor cannot be aware of what the “costs” of other contractors may be before the project is underway. These costs are not specified or pre-determined.

In comparison, the FIDIC contract does not provide for the employer to claim additional costs. The NEC3 contract, however, includes the concept of key dates. If the work does not meet the condition for a key date, resulting in additional cost incurred by the employer, the

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ontractors in the energy space are increasingly asked to sign agreements with other contractors involved in a project. Called interface agreements, contractors worry about the ramifications for stakeholders. Even where a direct interface agreement is not signed, indemnities are drafted into each of the contracts, which would have a similar effect.

Whether for the main contract works or the balance of plant infrastructure, the norm is for contractors to sign a design and construction contract. The contractor’s liability is based on the execution of these works and remedying any defects. Each contract spells out the indemnities and limitations of liability. In short, the contractor is clear about the risks assumed by signing the agreement.

Design and construction contracts require co-operation with other parties, including the employer, its representatives and other contractors appointed to the project. If the project is financed, this often extends to the lender and the lender’s technical representative.

The scope of works sets out the parameters of the project to ensure that the contractor has allowed for the required co-operation in terms of both the price and programme.

Should additional co-operation be required during the project, the contractor may be able to claim for additional time and money. If the works are completed late, the contractor is liable for delay damages. These delay damages are capped.

For more information: 011 648 9500 info@mdalaw.co.za www.mdalaw.co.za

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S TA NDA RD S

Adhering to improved standards can set organisations on a path to informed energy management. By GARETH SWART, senior process engineer at ISO specialist WWISE

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ith energy constraints becoming increasingly pressing, finding efficient and sustainable ways to manage energy consumption is a must for businesses. South Africa’s recent energy challenges have highlighted the urgency of addressing these concerns.

There’s hope on the horizon in the form of ISO 50001:2018, an international standard that provides organisations with a systematic approach to energy management.

This standard empowers organisations to gain deep insights into their energy consumption patterns, prioritise resources effectively and make well-informed decisions to enhance energy efficiency.

At the core of ISO 50001 is a commitment to data-driven decision-making. By closely monitoring and analysing energy performance data, organisations can uncover usage trends, identify inefficiencies and recognise opportunities for improvement. This enables them to optimise energy consumption and facilitates the allocation of resources towards the most impactful energy-saving initiatives.

and informative materials that break down the significance of ISO 50001 and energy management. When employees understand the “why” behind these standards, they’re more likely to embrace them wholeheartedly.

Clear communication from leadership is essential. When executives demonstrate a genuine commitment to energy efficiency, it sends a powerful message throughout the organisation. Leadership should transparently share goals, progress and success stories related to ISO 50001. This fosters trust and encourages employees to align their efforts with the larger mission.

Incentivisation also plays a crucial role in driving engagement. Recognising and celebrating employees who actively contribute to energy-saving initiatives creates a sense of accomplishment and community, transforming energy management into a collective effort.

From small acknowledgements to rewards, recognising employees’ contributions reinforces the idea that everyone has a role in creating a greener, more efficient future.

ENERGY AWARENESS

As organisations delve into ISO 50001, they find its benefits extend beyond energy efficiency.

The standard can streamline operations, reduce costs and position businesses as responsible stewards of the environment. ISO 50001 doesn’t merely optimise energy consumption; it optimises the organisation itself.

In a landscape where every kilowatt saved matters, ISO 50001 emerges as a beacon of hope for organisations striving to navigate energy challenges. By empowering businesses with insights, fostering a culture of energy awareness and engaging employees, the standard paves

However, ISO 50001 isn’t just about crunching numbers; it also fosters a culture of energy awareness that permeates an organisation’s DNA. Engaging employees in this endeavour is crucial as staff are a company’s greatest asset in driving change. By involving them in energy-management initiatives, organisations tap into their collective knowledge and enthusiasm. This sparks a sense of ownership, where employees become proactive stakeholders in the journey toward energy efficiency.

So, how can organisations successfully instil this culture of energy awareness? A multifaceted approach is key. Education is a powerful tool and employers can empower staff by offering workshops, training sessions,

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BEYOND EFFICIENCY

In a landscape where every kilowatt saved matters, ISO 50001 emerges as a beacon of hope for organisations striving to navigate energy challenges.

the way for a brighter, more sustainable future – where organisations not only survive, but also thrive in the face of energy constraints.

Implementing ISO 50001 begins with crafting a robust energy policy that sets the tone for energy-conscious practices. This policy serves as a guidepost for defining roles, responsibilities and targets for energy performance improvement.

Another critical aspect is the energy review, an evaluation of significant energy uses and consumption patterns, which informs the establishment of energy performance indicators and the setting of targets to boost efficiency and reduce consumption. By creating a baseline of energy consumption and performance, organisations gain a reference point to measure progress and celebrate accomplishments.

ISO 50001 encourages the implementation of best practices and advanced technologies to enhance energy performance. This encompasses a wide array of measures, from process optimisation and equipment upgrades to the adoption of energy-efficient technologies.

MEASUREMENT AND MONITORING The standard’s effectiveness is amplified by continuous measurement and monitoring of energy consumption and performance data. This dynamic process identifies areas for improvement, assesses the efficacy of energy-saving initiatives and guides evidence-based decision-making.

Regular management reviews provide a holistic view, identifying opportunities for refinement and strategic resource allocation.

In a world increasingly conscious of its ecological footprint, ISO 50001 sets the stage for organisations to become leaders in responsible energy management. Its implementation may vary in duration, ranging from six months to two years, depending on organisational complexity and maturity.

Nonetheless, one constant remains: effective leadership is the cornerstone.

ISO 50001 ENCOURAGES THE IMPLEMENTATION OF BEST PRACTICES AND ADVANCED TECHNOLOGIES TO ENHANCE ENERGY PERFORMANCE.

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Empowering organisations with ISO 50001

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Through digitalisation, operators benefit from a consolidated view of the various energy resources feeding into the grid, ensuring that it is managed and distributed methodically based on real-world demand and supply.

Conversely, receiving energy from various DERs without proper management could potentially lead to an overloaded infrastructure and compromised power quality.

CHANGE REQUIRES FLEXIBILITY

A CHANGING GRID REQUIRES FLEXIBILITY In an evolving energy landscape, distribution via an optimised grid that can accommodate variable energy sources is needed, writes DWIBIN THOMAS, cluster automation leader at Schneider Electric

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inston Churchill said: “To improve is to change; to be perfect is to change often.” It is a sentiment that can be applied in almost all industries, including power generation. As the landscape changes, so should energy production and distribution readily adapt, ensuring that we establish a flexible, optimised grid of the future.

Traditionally, grid flexibility involved utilities enrolling large industrial energy consumers in load curtailment and demand response programmes to help adjust the balance between supply and demand. These intensive electricity users would reduce or shift their energy use during peak periods.

However, today grid flexibility has become far more complex. Increasing investment in renewables means that energy flow is bidirectional, with decentralised energy coming from multiple distributed energy resources (DERs).

Furthermore, as organisations and even individual households start moving over to generating their own electricity, we now have a growing landscape of prosumers that produce and consume energy, further amplifying the need for grid flexibility.

Traditional demand response shows its limitations in balancing an evolving grid.

It represents a critical paradigm shift for utilities, and given the pace of innovation, it is challenging to plan for a future that includes rapidly growing DERs. Another fundamental challenge is upgrading a decades-old grid, which takes time and represents large capital expenditure.

Grid-connected prosumers, an increase in electrification, and climate uncertainty also mean energy demand will continue to be variable and uncertain.

DIGITALISATION LEADS TO FLEXIBILITY A digitalised grid – one that adapts to these variable energy sources and responds to dynamic challenges – is needed to identify, enrol and aggregate distributed energy resources. Such a grid can help realise sustainability as it can incorporate DERs in a more flexible and optimised manner to bolster grid resilience. It adapts faster and is more responsive to weather crises, is more sustainable and reliable, and can reduce operational costs with predictive maintenance strategies.

A DIGITALISED GRID – ONE THAT ADAPTS TO THESE VARIABLE ENERGY SOURCES AND RESPONDS TO DYNAMIC CHALLENGES – IS NEEDED TO IDENTIFY, ENROL AND AGGREGATE DISTRIBUTED ENERGY RESOURCES.

Establishing a more flexible grid requires keeping pace with an evolving landscape.

Firstly, at the prosumer level, we’re seeing a hybrid future taking shape, with more internet of things-connected assets (buildings, houses, electric vehicles, and so forth) online, ready to be dispatched and aggregated. These assets are looking for the right flexing compromise between efficiency through more automation and freedom of choice enabled by customer engagement platforms.

Second is the grid management, where utilities must optimise each hybrid prosumer and other suppliers of DERs by incorporating the necessary technology (directly or via service vendors) to become more agile and flexible.

At the distribution system operator level, DER management software solutions tailored to enable the efficient planning, design, and operation of today’s flexible, dynamic grid are available.

These solutions maximise the connection of renewables by leveraging DER flexibility at every level. This approach supports small proof-of-concept projects through to full-scale deployment roll-outs that require direct device monitoring, control and integration with third-party aggregators.

DER management solutions provide energy suppliers and distributors with smarter, more efficient ways to manage the integration of various energy sources into their grid. At Schneider Electric, for example, our DER management software options incorporate artificial intelligence and machine learning algorithms that not only analyse historical data, but also consider weather patterns and forecasts to give utilities additional insight into the renewable energy supply. It’s all part of building a smarter, more flexible and resilient grid ecosystem.

Dwibin Thomas

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