Companies in South Africa should consider investing in alternative energy solutions to minimise business interruptions while managing the cost of electricity, especially given the country’s challenges with load-shedding, which negatively impacts on businesses, FNB Business Alternative Energy Solutions head Kyle Durham tells Engineering News.
Durham says load-shedding, increasing energy costs and climate change are the three drivers behind South African businesses' pursuit of cost-effective, renewable energy solutions.
He mentions that FNB’s Alternative Energy Solutions division has seen demand for renewable energy solutions increasing steadily and significantly, with solar photovoltaic (PV) emerging as the most popular solution.
As at December 2020, the bank had funded about 20 MW of renewable energy infrastructure for its business customers, with about 5 MW of these in the agricultural sector.
Moreover, the bank is projecting a significant increase in alternative energy funded solutions by the end of the year, despite the economic impacts of the Covid-19 pandemic.
Durham says that, while the solution pursued would depend on the needs and specifications of the business in question, PV is a good fit for the country, owing to the amount of solar irradiation it gets.
As alluded to, the agricultural sector in particular has shown an increased appetite for alternative energy solutions this year.
Durham notes that the lack of certainty about constant power supply has had, and continues to have, a considerable impact on the agricultural sector and associated industries; and farming operations and seasonal planning have been disrupted by repeated outages.
Moreover, Durham says players in this space are looking to reduce their emissions, so that they can comply with customers’ requests for this when exporting produce.
Businesses as a whole are also facing rising energy costs, which is driving an uptake of alternative energy solutions, with the cost of electricity supply remaining high and set to increase further this year, notes Durham.
However, the Presidency this year announced that the Electricity Regulation Act would be amended to ease licensing requirements for embedded generation projects, which includes roof-top solar power systems.
A study by Meridian Economics has determined that up to 5 000 MW of additional power capacity could be built if the licensing-exemption threshold for embedded generation projects were to be increased to 50 MW.
While various industries have expressed their support for raising the threshold to 50 MW, from the current 1 MW, Mineral Resources and Energy Minister Gwede Mantashe has held firm that the threshold will not be increased above 10 MW.
Durham acclaims that pursuing renewable energy solutions could enable significant cost reductions for business, in terms of energy costs, as well as by reducing costs from lost productivity as a result of power interruptions.
Moreover, it would engender significant environmental benefits, posing an alternative to the current coal status quo.
Durham cautions, however, that this is still a relatively new market in the country. Therefore, business must have sound procurement processes to ensure they do not engage with risky suppliers.
Moreover, he emphasises that businesses must not fall foul of regulations.