JUWI RENEWABLE ENERGIES – Hybrid Systems the Future as Energy Opens Up

Innovation in South Africa’s sorry energy sector is a welcome sight for many across the country. The general public as well as the business sector have voiced their dissatisfaction with the performance of Eskom, not for the first time. No longer is it acceptable for one of Africa’s leading economies to experience load shedding. No more should people have to worry about whether they will have lights, phones, and connectivity in their home and workplace. An alternative solution is needed and, while the government has been making efforts to change the energy mix for many years, progress must be ramped up.

In February, Minister of Environment, Forestry and Fisheries, Barbara Creecy, announced that the country would not ignore its responsibilities as a global citizen regarding climate change. The energy production industry is a major contributor to CO₂ emissions globally and, while South Africa’s energy industry needs to improve, it will not be done at the cost of the natural environment – according to Creecy.

“It is essential that the nations of the world stand together in support of the Paris Agreement. We have a common moral responsibility to future generations to honour our mutual commitments and our differentiated responsibilities to fight the causes and consequences of climate change,” she said.

The government has previously committed to modernisation of the energy mix by introducing more renewable production and encouraging independent power producers (IPPs) who can install generating capacity from the likes of solar, wind, biogas and other renewable sources. While progress has been made, there is certainly more that can be done in this country of such abundance. Rebates, tax incentives and other motivations have been put in place by the Department of Trade and Industry to encourage the adoption by potential manufacturers and end-users of the various energy systems including PV or fuel cell systems. There is also huge potential for skills development and employment creation in the renewable space – something which the government is desperate to fast track.

Whether it’s for climate and environment reasons, job creation and skill development reasons, future proofing reasons, or broadening the energy mix, investment into renewable energy production is vital and is not only on the agenda in South Africa, but has proven hugely successful around the world.

INVESTING IN CHANGE

One company that is actively participating in the sector in South Africa is juwi Renewable Energies, the local arm of the global company, established in Germany in 1996. juwi officially opened its doors in South Africa in 2012 after realising the major potential for solar and wind energy across the region.

The company has proven itself in South Africa, building five utility scale solar plants, various wind farm projects, and a host of large embedded solar PV products. Under the government’s Renewable Energy Independent Power Producers Programme (REIPPP), juwi has installed 121 MW of solar power plant and is active in project development, Engineering, Procurement and Construction (EPC), and Operations and Maintenance (O&M) services alongside off-grid hybrid solar-diesel-storage energy solutions.

Now is an important time for IPPs in South Africa after President Ramaphosa stated in his 2020 State of the Nation Address (SONA) that municipalities would be given the option to purchase their own power from IPPs. Although we do not yet know when the official go ahead will be given, it will allow municipalities to choose the type of power they would want to purchase.

Also in the SONA, the President suggested that mining companies – some of the biggest users of energy in the country – would be allowed to produce their own power. This sentiment was welcomed by business and, as the largest gold mining nation in Africa and the largest platinum miner in the world, the industry has been desperate to produce its own power for years. Any excess could then be sold back to the grid.

For juwi, this news will be music to its ears. The company is already experienced in dealing with corporate clients and the perfect example comes from its partnership with Orion Minerals at the Prieska Zinc Copper Project in the Northern Cape.

NORTHERN CAPE SUCCESS

In March 2019, juwi entered into a collaboration agreement with Repli Trading, a division of Orion Minerals, to study the potential for renewable energy generation at the Prieska Zinc Copper Project.

The idea is to build a 35 MW integrated solar and wind plant that can supply clean energy directly to mining operations from a site just 20km away.

Initial ideas came from the juwi installation at the Degrussa/Sandfire project in Australia. Also a hybrid generating solution, this off-grid project has saved the mine several million litres of diesel fuel resulting in Project of the Year status for 2016, awarded by Energy and Mines Magazine at the World Congress in Toronto. juwi now boasts years of operational data and an impressive 100% uptime which is attractive for miners and industries in rural areas. The plant has the potential to also supply power to the local community, something which the government is keen on.

Greg Austin, Managing Director at juwi said: “We are pleased to have this opportunity to work with Orion Minerals and to advance the use of renewable power in the mining industry. Hybrid systems are at the forefront of transforming the remote power generation sector and the resource industry into one with a sustainable future as they offer emission-free low-cost energy.”

Errol Smart, Managing Director and CEO at Orion agreed, saying: “The agreement is in line with our strategy to make best use of our geographic advantages. The region has the highest irradiance levels in the country and is very well-situated for wind farms. It is already a well-established renewable energy generation region with 190 MW of solar power plants in operation and 240 MW of wind power under construction adjacent to our Prieska Project. The opportunity can only improve our power supply security, whilst lessening the burden on the national electricity grid and reducing our carbon and water footprint.”

HOT PARTNERSHIPS

In June 2019, juwi struck a deal with Reatile Renewables where the black-owned investment company would take a 20% stake in juwi’s EPC company. The EPC company is responsible for building solar PV plants in South Africa and is working on Round Four REIPP projects which will be connected to the grid. 

Reatile is a serial investor in renewable energy initiatives and juwi is happy to bring on board a BBBEE partner. After changes to round four renewable IPP projects system, where the Department of Energy required active shareholding and activity from project owners and contractors, juwi took steps to stop delays and move forwards.

“juwi subsequently engaged with the lead equity on three projects, Old Mutual, and we have given them the commitment that we will be at least 40% black owned and at least 50% of that ownership will be through an active black industrialist shareholder. I am really delighted not only because our agreement with Reatile Renewables fulfils that objective, but also because there is a clear, broader strategic fit for the two companies,” said Austin.

juwi is also ready to engage with Reatile regarding shareholding in its O&M business.

“We are really at the stage of taking the first steps on a much longer and deeper relationship journey that we will be exploring, in terms of Reatile’s participation in our projects in South Africa and on the continent, as it relates to our hybrid power projects focusing on mines,” he said.

Simphiwe Mehlomakulu, Chairman of Reatile Group, was clear about his company’s ambitions for the future of the energy space.

“The Reatile Group is interested in investing in megawatts throughout the continent,” he said. “Our vision is to diversify our energy mix away from fossil fuel and replace (or combine) it with renewables. We believe that renewables, as a clean energy, is the energy of the future. We want to make sure that for every rand we make in fossil fuel; we make the same rand in renewables – so that when I die and leave this world, we have a neutral carbon footprint.

“juwi has projects in South Africa and in Africa where they would want to have investors like Reatile Group to take equity investment in those projects, because we are interested in ownership of megawatts, the actual power that we sell,” he added. “The combination of investing in juwi, being the originator of the project as well as looking for an investor in some of its projects throughout Africa, it makes a very symbiotic relationship with Reatile Group that fits very well together.”

Mehlomakulu went on to highlight the strength of the juwi business in South Africa and globally. “They are strong in Germany and other parts of Europe. I visited the juwi head office in Germany last year, I was astounded by the technology and the support to the technology I saw. They are a well-capitalised company and are developing projects all over Africa and in South Africa,” he said.

In September, the two signed agreements where Reatile took a 43% shareholding in juwi’s solar PV O&M business. This subsidiary covers technical, commercial and remote monitoring aspects, planning, controlling, supply of inspections, maintenance and repairs, as well as back office support containing specialists in the areas of PV technology, safety, health and environment, networks and SCADA, grid design and compliance.

“We are pleased that Reatile has taken up a substantial stake in our O&M subsidiary which, during 2020, will increase its South African market share significantly,” said Austin.

This strength of the juwi brand was recognised in September 2019 when the company was labelled as the fourth on a list of the world’s top utility scale solar constructors, compiled by Wiki-solar.org. Ranking was based on cumulative capacity and saw many global companies listed but juwi managing to maintain status.

In South Africa, the company’s influence will surely now boom following the announcement in February from Energy Minister Gwede Mantashe who said that NERSA had approved license for 75 entities to participate in energy production, totalling 42 MW. The majority of applicants are mining houses and industrial companies, and this will be extremely helpful for taking demand from the Eskom grid.

In February, the World Bank said that off-grid solar systems were helping to bring electricity to people who really need it, especially in sub-Saharan Africa and Asia.

“The off-grid solar sector has grown rapidly over the past decade and is now a $1.75 billion annual market serving 420 million users, with further growth predicted,” its report stated.

For juwi, in South Africa and globally, there is major potential. Already proven by its work in Prieska and its recognition as a global industry leader, this is a business that will have an important role to play going forward as South Africa’s energy market changes dramatically.