Financial services group Nedbank reported an “overwhelmingly positive” market response on Tuesday to its pioneering listing of a renewable-energy bond on the Green Bond Segment of the JSE.

Nedbank became the first South African bank to list such an instrument on the bourse’s platform, which was itself launched in October 2017.

The proceeds will be used to provide financial support to solar and wind projects.

Nedbank CIB debt capital market origination head Bruce Stewart reported that the bond auction, which opened on April 24, “was significantly oversubscribed, demonstrating strong investor appetite for good-quality environmental, social and governance-focused assets".

​He added in a statement that the final pricing also exceeded initial expectations.

The bank received bids worth R5.5-billion,more than three times above the amount of R1.7-billion in bonds placed to fund renewables projects.

A diverse spread of investors subscribed for the bonds, including domestic asset managers and impact funds set up by foreign investors. At least 18 investors participated in the book, including the African Local Currency Bond Fund and the WWF fund.

The bond listing sought to build on the bank’s growing experience in the South African renewables sector, developed primarily through the funding of projects under government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Since 2011, 112 renewables projects with a combined investment value of R209.4-billion and a combined capacity of 6 422 MW have been procured through several REIPPPP bid windows.

To date, Nedbank has funded 42 of these transactions, worth a combined R40-billion.

The bond, Stewart said, allowed the bank to further extend support for the provision of clean energy in South Africa.

It also contributed towards the achievement of the United Nation’s Sustainable Development Goals, to which the bank had recently aligned its commercial activities.

Nedbank also recently confirmed that it would no longer participate in the funding of the Thabametsi and Khanyisa coal projects, named in 2016 as preferred bidders under South Africa’s coal procurement programme. The projects have yet to reach financial close.

The Nedbank Renewable Energy Bond was developed in line with International Capital Market Association Green Bond Principles and the Climate Bonds Standard. 

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T​he time is ripe for South African businesses to make applications for finance to develop renewable energy and energy-efficiency projects.

This is the view of the South African National Energy Development Institute (SANEDI) in the wake of load-shedding and energy price hikes.

SANEDI was established in 2011 under the National Energy Act, 2008. The Act provides for SANEDI to direct, monitor and conduct energy research and development, promote energy research and technology innovation, as well as undertake measures to promote energy-efficiency throughout the economy.

Financially-constrained Eskom, which supplies about 90% of SA's power, last month implemented stage four rotational load-shedding.

As the challenges at Eskom persist, SA has been making steady progress in incorporating renewables into the country's energy mix.

The South African government envisages that in 2030, the energy mix will consist of 34 000MW of coal, representing 46% of installed capacity; 11 930MW of gas, or 16% of installed capacity; 11 442MW of wind, or 15% of installed capacity; 7 958MW of photovoltaic (PV, or solar); and 4 696MW of hydropower, or 6% of installed capacity.

This was stipulated in the country's Integrated Resource Plan (IRP) 2018, a 20-year energy roadmap to meet SA's future power needs.

Electricity prices increased in SA from1 April. Last month, energy regulator Nersa said it had granted power utility Eskom the following tariff increases over the next three years: 9.41% or allowed revenue of R206.34 billion for 2019/2020; 8.10% or allowed revenue of R221.8 billion for 2020/2021, and 5.83% or allowed revenue of R233.1 billion for 2021/2022.

​SANEDI, which hosts SUNREF, an international lending programme that promotes green finance and energy innovation, has called on businesses to consider accessing SUNREF's green loans to develop renewable energy and energy-efficiency projects, in support of the country's efforts towards green transition.

SUNREF, developed by French Development Agency, is a programme relying on two pillars: a credit line to partner bank IDC, and a technical assistance facility hosted by SANEDI and funded by the State Secretariat for Economic Affairs in Switzerland.

The programme helps green projects become bankable and access financing from IDC. It is linked to a credit line with the IDC for around $60 million to fund projects that fit its mandate to promote energy-efficiency and renewable energy in SA.

Rob Short from SUNREF explains who can apply for the green loans: "It can be any business, in any sector, that wants to look at energy-efficiency or renewable projects in terms of its own internal processes or within its supply chain. As well as companies that provide manufacturing services or goods for the renewable energy and energy-efficiency sectors."

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A growing number of banks are offering incentives for businesses and small companies to install  Solar Photovoltaic (solar PV)  panels, Jack Radmore, GreenCape’s energy programme manager, said. 

He said a typical solar panel installation, to power a small home between 4-7kWp, can cost anything between R60,000 and R105,000, excluding battery costs. 

This translates into roughly R1.30 per kWh for the next 15 years, he said. 

Commercial tariffs sit between 85c and R1.70 per kWh and residential tariffs can go as high as R2.20 per kWh. 

Read GreenCape's full financial brief here
Radmore said for a medium-sized commercial system, roughly the size of 250kWp, the price increase to roughly R3.2 million, excluding battery costs.

This translates into roughly R0.90 per kWh for the next 15 years.

“It is very important to highlight that these upfront costs are no longer a barrier in the South African decentralised energy market,” Radmore told Business Insider South Africa.

“A number of innovative financial mechanisms exist that require no upfront capital from the customer.”

For example, he said, a power purchase agreement allows consumers to buy electricity per unit as they do from Eskom at a set price for between 12 and 15 years. 

Also read: With the new power price, solar geysers are almost – but not quite – starting to make financial sense
Radmore gave Business Insider South Africa a break down of what each bank is offering for solar panel installations. 

It is important to note that solar panels are VAT deductible, and qualifies for a 12b tax benefit which can result in additional savings of 28% on cost. 

To ensure reliable power transmission, solar industry supplier Valsa is partnering with solar energy equipment suppliers A+Sun, SAT Control, Jinko Solar, Seraphim, Viasolis and electronics company Schweizer, as well as funding institutions, to provide funding for solar photovoltaic (PV) projects.

“The power sector is under pressure, considering its inability to supply sufficient power for end-users. The inadequate infrastructure, which does not sufficiently provide for businesses or the general public, is a contributing factor to this pressure,” says Valsa MD Svilen Voychev.

He avers that the ultimate solution is PV solar energy with battery storage directly linked to the grid, as a mini-grid or off-grid system where the infrastructure or network connections are poor or unstable. PV solar offers an alternative to having to build an expensive network infrastructure or decentralising the network, and will reach more people and businesses faster.

Voychev explains that PV solar, as an alternative power source, is more viable, particularly as it uses a cleaner alternative resource, solar energy, for power generation, compared with coal that contributes to environmental pollution and climate change.

Noting the technological advancements that have taken place in PV solar, he mentions that Valsa is in discussions with sister company Solar MD and has developed a new line of storage solutions with improved performance capability.

Moreover, the latest technological developments allow panels to follow the rotation of the sun, increasing the performance of the PV solar plant. These high-performance PV solar panels now ensure that the PV solar system is more sophisticated and makes power generation more effective.
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Renewable energy provides solutions for the challenges associated with power generation, as the price of photovoltaics and wind energy technologies have gone down owing to the increase in the efficiency of the technologies, says Stellenbosch University Centre for Renewable and Sustainable Energy Studies (CRSES) director Professor Sampson Mamphweli.

“South Africa has a lot of solar radiation that can be converted through solar photovoltaics and concentrated solar power technologies. The country also has a lot of biomass materials that can be used to provide bioenergy. Wind is also prominent around the coastal areas. There is also space for technology localisation, which will then result in job creation.”
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He further tells Engineering News that, with the cost for renewable energy having decreased, it has allowed for an increase in the number of installations by industry and households.

Moreover, he mentions that renewable energy is a viable option, especially with State-owned power utility Eskom facing a challenge in the mismanagement of its generation division, specifically regarding the maintenance of the fleet of coal-fired power stations, which are ageing and require maintenance regularly.

However, Mamphweli adds that the unbundling of Eskom into three separate divisions is a step in the right direction.

It is important that Eskom gets unbundled into generation, transmission and distribution, with generation being partially privatised but still regulated by the National Energy Regulator of South Africa. “This will ensure efficient running of the generation division,” he concludes.

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The Council for Scientific and Industrial Research (CSIR) has found that renewable energy helped combat load-shedding in the first quarter of 2019.

The CSIR said that variable renewable energy (VRE) helped to relieve pressure on the South African power grid and was a major factor in avoiding further load-shedding.

Causes of load-shedding during 2019 have been cited as unplanned plant failures combined with the loss of imported power from Mozambique.

This resulted in the most intensive load-shedding ever experienced in the country, with 595GWh shed in March alone.

The CSIR noted that renewable energy contributed 2,975GWh (5.3%) to the South African power system in the first quarter of 2019, proving instrumental in combating the severity of load-shedding.

“Without the variable renewable energy fleet, load-shedding stage 5 and 6 could have been invoked,” the CSIR said.

The graph below details the effect of renewable energy on the load-shedding crisis in South Africa in Q1 2019.
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Lingering policy uncertainty and regulatory delays are continuing to impede the development of hundreds of small-scale embedded generation (SSEG) projects, which are seen at the quickest and cheapest way for South Africa to address its current electricity supply deficit.

The South African Independent Power Producer Association (SAIPPA) estimates that between 2 500 MW to 3 500 MW of capacity is being constrained as a result of the problem and that 30 MW to 50 MW could be added monthly once coherent processes are instituted.

The prevailing policy framework and regulatory processes remain deeply problematic and are affecting both small plants below a capacity threshold of 1 MW, as well as larger SSEG projects.

In fact, the South African Photovoltaic Industry Association (SAPVIA) has identified just over 280 MW from projects under 1 MW and about 600 MW from projects between 1 MW and 10 MW that are currently built, but not operating, as a result of regulatory gridlock.

Although sub-1 MW plants have been exempted from the theoretical burden of licensing, they are currently tied up in red tape arising from a November 2017 Licensing Exemption and Registration Notice published in terms of the Electricity Regulation Act (ERA). Issued by the Department of Energy (DoE), with the National Energy Regulator of South Africa’s (Nersa’s) concurrence, the notice amended Schedule 2 of the ERA.

Both the DoE and Nersa acknowledge the notice is “flawed” and the DoE sent an updated notice to Nersa for its concurrence in late 2018.

The updated notice exempts projects below 100 kW from any form of registration and instead directs municipal distributors to keep a register of such facilities. Plants between 100 kW and 1 MW in size are required to register with Nersa and pay a R200 registration fee.

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Another huge fuel price hike, another pending electricity price jump. Just another day in sunny South Africa. The trouble with energy prices is that when they go up, the price of everything else goes up, but when they go down, other prices don’t.

The energy situation in South Africa is unsustainable and it is not just the poor and working class who are suffering, the entire economy is feeling the pain. It is just a matter of time before it reaches the verge of collapse, unless we do something urgently.

Fortunately, there is hope on the horizon or, more accurately, in the sky.

In my previous article I wrote about breakthroughs in solar power technology. A few months ago, I wrote about electric cars and their amazing capabilities.
These two technologies are potentially world-changing and in a few years they will transform the world’s economies in unimaginable ways.

Consider an average household of the future: all the power needed to run a house will be generated via solar power. But this power will not come from the national grid, it will be generated by the house itself. The average home of the future will be off-grid. In fact, in many places this is already a reality.

American company Tesla has developed a range of roof tiles that look like plain old concrete roof tiles, but are highly efficient solar panels capable of generating electricity for domestic use.

Made with tempered glass, Tesla claims its solar roof tiles are more than three times stronger than standard roofing tiles. Its website says: “Glass solar tiles are so durable they are guaranteed for the lifetime of your house, or infinity, whichever comes first.”

Although domestic solar panels have been around for some time, the trouble with them, as with solar power in general, is that there isn’t a way to store the generated electricity.

Excess electricity is wasted, and when the sun goes down, no electricity is generated at all.

As a result, power grids have to resort to “traditional” power sources such as coal and nuclear power stations.

But that is about to change.

​Towards the end of 2016, areas in South Australia faced wide-scale blackouts and load shedding after extremely violent storms knocked out power transmission towers. Since the area is remote, there weren’t sufficient alternative lines to re-route the power, and the problem persisted, affecting thousands of homes and businesses.

Elon Musk, Tesla’s chief executive, became aware of this and tweeted a solution: build the world’s biggest lithium-ion battery.

He claimed the battery would be able to supply the entire region with backup power whenever the grid went out. He further claimed he could build it in 100 days.

The Aussies took Musk up on his offer. Despite vehement opposition from some of Australia’s senior politicians, such as Prime Minister Scott Morrison, the 100MWh/129MWh Hornsdale Power Reserve was officially commissioned on December 1, 2017. The battery would be owned and operated by French renewable energy provider Neoen.

The “Big Battery”, as it is called, cost nearly A$100m (R1.06billion) to build, but by the end of last year, the Australian energy market operator reported that it had saved almost A$40million in grid costs.

Big Battery catapulted South Australia into a world leader in power storage and, due to its success, Tesla has received a number of orders for similar installations. All that from a single tweet.

Tesla is also the leader in the domestic power storage industry. Its Powerwall unit is a large battery especially designed for homes and is powerful enough to run a home with all its appliances, including air conditioners. Unlike most battery backup systems, the Powerwall connects to the power mains, not to a limited number of lights.

Although the Powerwall can operate on its own as a backup system, it ideally pairs with the roof tile solar panels to operate as a complete power solution. It provides about 7kWh, which means an average family of four will require just two batteries for normal overnight usage.

For many American families, the solar roof tiles and Powerwalls are not just powering their homes, but their electric cars, too.

The obvious benefit is a huge monthly saving in electricity and fuel costs, but the wider ramifications are mind-bending to consider.

Traditional power stations will become a thing of the past, while the entire crude oil industry will collapse, with all the nastiness that goes with it, such as the cartels, middlemen, price-fixing, oil wars and, of course, environmental hazard. Petrol stations will be replaced by charging stations.

All our energy will come from the most natural, abundant and renewable source: the sun, and for the first time in more than a 100 years, energy production will be truly democratised and out of the hands of a greedy few.

* Bilal Kathrada is an educational technologist, speaker, author, newspaper columnist and entrepreneur. He is the founder of CompuKids, a start-up that teaches children Computer Science skills. Bilal blogs at www.bilalkat.com.

** The views expressed here are not necessarily those of Independent Media.

Cape Argus

The decade-long trend of strong growth in renewable energy capacity continued in 2018 with global additions of 171 GW, according to data released by the International Renewable Energy Agency (Irena) this week.
The year-on-year increase of 7.9% was bolstered by new additions from solar and wind energy, which accounted for 84% of the growth.
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A third of global power capacity is now based on renewable energy, the agency said.

Irena’s yearly ‘Renewable Capacity Statistics’ report for 2019 showed that while Asia accounted for 61% of the total new renewable energy installations – having grown its installed renewables capacity by 11.4% – growth was the fastest in Oceania, which achieved a 17.7% rise in installations in 2018.
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Africa’s renewable energy capacity expanded by 8.4% year-on-year.

“Through its compelling business case, renewable energy has established itself as the technology of choice for new power generation capacity,” Irena director-general Adnan Amin noted.

He highlighted that the strong growth in 2018 continues the “remarkable trend” of the last five years, which he said reflects an ongoing shift towards renewable power as the driver of global energy transformation.

“Renewable energy deployment needs to grow even faster, however, to ensure that we can achieve the global climate objectives and Sustainable Development Goals. Countries taking full advantage of their renewables potential will benefit from a host of socioeconomic benefits in addition to decarbonising their economies.”

Irena’s analysis also compared the growth in generation capacity of renewables to changes in generating capacity in nonrenewable energy, mainly fossil fuels and nuclear.

The analysis found that while nonrenewable generation capacity has decreased in Europe, North America and Oceania by about 85 GW since 2010, it has increased in both Asia and the Middle East over the same period.

Since 2000, nonrenewable generation capacity has expanded by about 115 GW yearly, on average, with no discernible trend upwards or downwards. 

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