Green Economy Journal Issue 51 by GreenEconomyMedia

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ISSUE 51 | 2022

PEROVSKITE SOLAR CELLS Cheaper, faster but are they better?

WIND

SOLAR

STORAGE

Your partner in building scale renewable energy generation and storage projects! Solar energy is now the cheapest electricity available, after utility scale wind. Battery energy storage installations provide access to solar energy daily when the sun is not shining, enabling users to bridge their primary energy needs through most load shedding events. The cost of a hybrid solar + battery storage solution can beat your current electricity costs, depending on a number of factors. Would you like to know if your home or business can achieve energy security at the same cost or less than what you are currently paying? Did you know that SARS allows for the accelerated depreciation of your power generation installation? See Section 12A&B of the Tax Act. Altum Energy has developed a sophisticated modelling tool to determine the point of feasibility for each electricity customer based on your unique set of input values.

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Solar and battery installation by

PUBLISHER’S NOTE Dear Reader, As we watch on in horror at the shenanigans of one Vladimir Putin as he destroys lives and infrastructure in the name of an abstract idea, nationalism and the expansion of influence, we struggle to regain the broader context of our usual endeavour, to find ways to raise living standards, while simultaneously lowering environmental impact, as contradictory as these may appear. We must be reminded of the good news we received recently in the form of greater policy clarity through SONA and subsequent speeches. We have also seen the advent of the City of Cape Town IPP RFP for 300MW of generation, along with significant go-forward within the private sector within the recent expansion of own generation licensing exemptions to 100MW. As we look ahead now in the hope that as talks begin that the situation in Eastern Europe will settle down and the risk of impending global catastrophe might again subside, and we are allowed to fixate once again on rolling out renewables as fast as possible. We might feel less frustrated, and perhaps more grateful for the small victories achieved of late. .. but maybe I’m getting ahead of myself. Peace!

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EDITOR: Alexis Knipe alexis@greeneconomy.media CO-PUBLISHERS: Gordon Brown gordon@greeneconomy.media Alexis Knipe alexis@greeneconomy.media Danielle Solomons danielle@greeneconomy.media LAYOUT AND DESIGN: OFFICE ADMINISTRATOR: WEB, DIGITAL AND SOCIAL MEDIA: SALES: GENERAL ENQUIRIES: ADVERTISING ENQUIRIES:

CDC Design Melanie Taylor Steven Mokopane Gerard Jeffcote Glenda Kulp Nadia Maritz Tanya Duthie Vania Reyneke info@greeneconomy.media danielle@greeneconomy.media

REG NUMBER:

2005/003854/07

VAT NUMBER:

4750243448

PUBLICATION DATE:

February 2022

Gordon Brown, Publisher

EDITOR’S NOTE Green Economy Journal congratulates Niveshen Govender and wishes him much success in his new position as the CEO of the South African Wind Energy Association. Please do not miss our exclusive interview with Govender on page 12. Solar power is set to see declining costs over the long term, resulting from technology advancements as well as a reduction in soft costs that are set to take place over the coming years. Our article on page 18, talks about the technological advancements that will lower solar power costs over the long term and delves into the historical cost declines for solar. In fact, the price of solar photovoltaic modules has reduced by 99.6% in real terms from 1976 to 2021. Do not miss The Solar PV Revolution in Numbers on page 17 for great insight into the price of solar (PV modules and utility scale), installed capacity as well as for solar plus storage. This issue of the Journal is jampacked with insight on battery technology (page 21), battery prices (page 22) and energy storage on page 24. In the past 20 years, electric vehicle start-ups have moved from obscurity into some of the world’s most valuable companies, most automakers have committed to an electric future and flying electric taxis have started to leave the pages of science fiction. On page 27, we look at six future trends for mobility. Onwards and upwards! Alexis Knipe, Editor

www.greeneconomy.media

Cover image: This image shows an artist’s representation of the inner workings of a perovskite solar cell. By Alex T. at Ella Maru Studio (University of Cambridge)

All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written permission of the Publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions. The Publisher does not endorse any claims made in the publication by or on behalf of any organisations or products. Please address any concerns in this regard to the Publisher.

COLLECTORS DESERVE A ROUND OF APPLAUSE. Recycling PET plastic bottles creates over 60 000 income opportunities every year in South Africa. Many of these are reclaimers, who helped divert upwards of 95 000 tonnes of PET plastic bottles from landfill in 2019. The used bottles they collect are recycled, ensuring that they become bottles yet again. This creates yet more jobs in the process, contributing positively to our country’s GDP while eliminating the chance that they end up harming the environment. Recycling ensures that a circular economy is established where the value of plastic bottles continues indefinitely.

55% POST-CONSUMER

Plastic bottles are not trash.

R278 MILLION

beverage PET bottles collected for recycling.

OVER 50 000

The market value of post-consumer PET bought by PET recyclers. * Reported in 2020

2106099_FP_E

active collectors invloved in PET Collection and recycling.

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8 10

NEWS AND SNIPPETS

ENVIRONMENT Building resilience is key to managing climate change risks

ENERGY Exclusive interview with Niveshen Govender, the new CEO of SAWEA

15 18 21

The solar PV revolution in numbers

Technology advancements to lower solar power costs over long term

STORAGE Battery technology primed for diversification

22 24 27 30 33

Battery prices Energy storage in 2022 TRANSPORT Six future mobility trends MINING Key focuses in new tailings standard

READ REPORT

TOURISM Sanbona Game Lodge: where nature takes centre stage

THOUGHT [ECO]NOMY

greeneconomy/report recycle

To access the full report in our Thought [ECO]nomy report boxes: Click on the READ REPORT wording or image in the box and you will gain access to the original report. Turn to the page numbers (example below) for key takeouts of the report

key takeouts of the report

NEWS & SNIPPETS

RUSSIA: IMPLICATIONS OF INVASION By Franklin Templeton Emerging Markets Equity team Investors’ worst fears about Russia’s intentions toward Ukraine have materialised following Russian President Vladimir Putin‘s announcement that he is sending troops into the country to “demilitarise” the nation. This follows his recognition of the Lugansk People’s Republic and the Donetsk People’s Republic as independent and sovereign states. There was a period when the crisis could have been resolved by negotiations and diplomacy, and possible limited penetration by Russia into rebel held territories in Ukraine. Our view on investments in Russian companies prior to this strife was constructive, with diversified exposure to the market, including in the energy and financial sector. The market is now more focused on the conflict than investment opportunities in the economy. Russia announced its intention to reach net zero by 2060 in the runup to COP 26 (the most recent United Nations Climate Change Conference). While not aligned to the Paris Agreement on climate change, it does signal a clear direction of travel. Engagement is the key to encourage Russia to bring its commitment forward to 2050 as well as setting out goals for 2030. Russia is one of the biggest oil and gas producers globally, it also has vast forests and generates 40% of its power from renewable sources including hydro, nuclear, solar and wind.1 The conflict in Ukraine does not detract from the need for engagement, which we believe is best achieved via ownership of companies that have shown a willingness to decarbonise, as opposed to divestment. Oil prices have spiked higher and gas prices are rising, which is inflationary in the short term and could result in stagflation if central banks raise interest rates too aggressively. Russia and Ukraine are major agricultural exporters of wheat and oil seeds. Russia and Belarus are the second and third largest producers of potash fertilizer. Belarusian potash exports are already sanctioned, which if combined with weaker supply of wheat from Ukraine, has global inflationary implications.

Suspension of Russian oil and gas imports could impact the near-term earnings power and ability to pay dividends in the energy sector. Higher domestic inflation could push up domestic interest rates, lowering the present value of future cash flows, putting downward pressure on stocks.

WHAT ARE THE RISKS?

All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Investments in foreign securities involve special risks including currency fluctuations, economic instability as well as political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets. To the extent a strategy focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a strategy that invests in a wider variety of countries, regions, industries, sectors or investments. Issued in the U.S. by Franklin Distributors, LLC, 1. Source: BP Statistical Review of World Energy 2021.

EAP REGISTRATION DEADLINE EXTENDED By Kirsty Kilner, Partner, Tendai Bonga, Senior Associate and Nonhlanhla Payne, Trainee Attorney Webber Wentzel Environmental Assessment Practitioners have been granted an extension to 8 August 2022 to register with the Environmental Assessment Practitioners Association of South Africa. Unless they register, they cannot take primary responsibility for Environmental Impact Assessments. The deadline for the registration of Environmental Assessment Practitioners (EAPs) with the Environmental Assessment Practitioners Association of South Africa (EAPASA) was extended by a further six months on the eve of the 7 February deadline. This is the second extension granted in terms of the regulations for the registration of EAPs under section 24H of the National Environmental Management Act, 1998 in 2016 (Regulations). The Regulations aim to regulate a rapidly-growing profession of environmental practitioners in view of the growing demand for environmental assessments across various industry sectors. This is largely to be done through EAPASA, the designated registration authority in terms of the Regulations. EAPASA is responsible for ensuring the professionalism of EAPs and for

improving the quality of environmental assessment practice in South Africa. After 8 August 2022, unregistered EAPs will not be permitted to hold primary responsibility for the planning, management, co-ordination or review of environmental impact assessments (EIAs) and environmental management programmes. If, however, the Proposed Amendments to the Regulations are promulgated in final form as currently worded, then unregistered EAPs will also not be able to perform a range of additional tasks in connection with, among other things, section 24G rectification applications and appeals contemplated under section 43 of NEMA. Clients are advised to ensure that their appointed EAPs register within the extended time period, as the legitimacy of EIA processes (and potentially of a range of additional tasks) that are run by unregistered EAPs after 8 August 2022 could be called into question. Unregistered EAPs who continue to hold primary responsibility for EIA processes after this deadline could also be prosecuted under the Regulations.

NEWS & SNIPPETS

NEW HEAD OF THE PRESIDENTIAL CLIMATE FINANCE TASK TEAM

THE HYDROGEN SOCIETY ROADMAP

South Africa’s Hydrogen Society Roadmap was released by the Minister of Higher Education, Science and Innovation Dr Blade Nzimande in February. The roadmap, which was approved by Cabinet last September, provides the framework necessary to develop and integrate hydrogenrelated technologies across various sectors of the South African economy, in the process enabling the just transition away from coal and stimulating economic recovery. It was developed by the Department of Higher Education, Science and Innovation (DHSI) and Hydrogen South Africa (HySA), with contributions from more than 100 other industry stakeholders. The plan has been in the making since the department launched HySA in 2008 and mandated it to research the possibilities for a hydrogen economy in South Africa. The roadmap, which identifies and prioritises nine catalytic programmes for development, targets the development of a competitive hydrogen economy by 2050, says Dr Rebecca Maserumule, chief director for hydrogen and energy at the DHSI. READ MORE HERE

President Ramaphosa has appointed Daniel Mminele as head of the newly established Presidential Climate Finance Task Team. In this role, Mminele will lead South Africa’s efforts to mobilise finance for a just transition. Mminele has been non-executive director and chair-designate at Alexander Forbes Group Holdings since January 2022. He served as chief executive of Absa Group Limited until 30 April 2021. Prior to joining Absa in January 2020, he was a deputy governor of the South African Reserve bank since July 2009 where he served two five-year terms.

ELECTRICITY HAS RISEN BY 307% IN 13 YEARS

National Energy Regulator of SA (NERSA) announced on Eskom’s fifth multi-year pricing determination that the Eskom tariff increase will be 9.61%. The utility had originally requested for 20.5%. The price of electricity has risen by 307% over the past 13 years, far exceeding inflation, this is despite South Africans having experienced an unreliable electricity supply. The Eskom tariff increase will be in effect on the 1st of April 2022 for Eskom customers, including municipalities, and 01 July 2022 for municipal customers.

POST-PANDEMIC WASTE MANAGEMENT The World Health Organisation (WHO) has expressed its concern around the management of healthcare waste produced during the Covid-19 pandemic. The problem is however much wider than the millions of PPE and vaccine items that joined unsustainable waste management practices over the past two years. “We will soon shift from a period dominated by the effects of the Covid-19 pandemic to a period of focus on realising the concept of circular economy,” says Brendon Jewaskiewitz, President of the Institute of Waste Management of Southern Africa (IWMSA). “The sustainable use of natural resources and the protection of environmental health can’t remain on the bottom of the agenda any longer.” The circular economy concept reflects the patterns and systems of the indefinite reuse and recycling of products. It

challenges the existing linear “take-make-waste” model, and proposes a circular, more holistic approach to growth that works for both business and the environment. “In a circular economy, disposal is considered a last resort,” explains Jewaskiewitz. “Single-use items started as a convenience, then some became a symbol of luxury, and during the pandemic it became a necessity to protect human health.” “The reality is however one that very few want to face; we are running out of landfill space at a frightening rate, and alternative waste disposal solutions are simply not popular or affordable enough to compensate for the vast amounts of waste created every minute.” To speed up the adoption of a circular economy mindset and highlight the availability of responsible and sustainable waste management methods, the IWMSA will host WasteCon 2022 in October this year. The Institute invites waste management professionals and experienced participants in the circular economy to submit their proposal to present their work to WasteCon 2022 attendees. More information and instructions on how to apply to be a speaker at WasteCon 2022 are available at https://www.iwmsa. co.za/wastecon/index

ENVIRONMENT

Building resilience is key to managing

climate change risks Recent years have seen a step-change in how business understands climate change: more than just an environmental concern, climate change has now become an existential threat. BY SRK CONSULTING

“T

he focus on environmental risks, like those featured in the King reports many years ago, has evolved to include ESG issues and climate change,” says Philippa Burmeister, principal environmental scientist at SRK Consulting. “While policy and regulation have tended to drive progress in this field, climate change is now increasingly recognised as a strategic risk to business survival.” Many businesses are moving proactively to find solutions to climate change impacts, well ahead of regulators’ efforts to guide and enforce action. Burmeister argues that a constructive approach needs to prioritise business resilience to climaterelated trends. “Climate change has become a significant risk that must be managed,” she says. “The sustainability of businesses is becoming increasingly reliant on how well they succeed in doing this.” One of the challenges is that business is still discovering the sheer breadth of these impacts, and in what ways they affect operations, according to Ashleigh Maritz, principal environmental scientist at SRK. The process of identifying risks is still developing – whether these relate to the business itself or its upstream and downstream stakeholders. “A climate change impact assessment (CCIA) is therefore quite different from a traditional environmental and social impact

assessment (ESIA),” says Maritz. “An ESIA considers mainly the effect of a project on its immediate and broader environment; conversely, a CCIA is more about understanding the environment’s current and forecasted effects on the business and its stakeholders and formulating practical responses that will build resilience to risks identified.” She highlights that response strategies need to include the early stages of becoming resilient, the maintenance of that resilience in the medium term, and then sustaining that resilience through building a future proof approach – where a much-changed world awaits. Building business resilience rests strongly on adaptive management, which emphasises ongoing and in-depth monitoring of factors that have potential to destabilise operations. According to Lisl Pullinger, principal ESG consultant at SRK, heightened uncertainty makes such monitoring vital. “In the past, we could rely on historical rainfall records to provide predictions for the scaling of infrastructure, for instance,” explains Pullinger. “Now we must model future scenarios in real time, based on how conditions are changing.” She notes that it is not enough just to collect data; it must also be regularly analysed and interpreted to inform decision-making and decisive action at a strategic level.

WATCH VIDEO

ENVIRONMENT

Philippa Burmeister and Ashleigh Maritz, principal environmental scientists at SRK Consulting, in conversation with Gordon Brown, publisher of Green Economy Journal.

“To sustain resilience into the future, business needs to move beyond silo thinking – to ensure that company functions do not operate as stand-alone pillars,” she says. “Rather, climate change impacts will extend across traditional disciplines and departments, from community dynamics and employee wellness to optimising water and energy resources.” Effective resilience to climate change will mean integrating companies’ responses to the various impacts. The pinch is already being felt as businesses seek finance for their projects, as financiers have been among the first to recognise how climate change puts their investments at risk. “Many of these key stakeholders now ask clients to respond to climate change risks in their project planning and execution,” Pullinger concludes. “Finance therefore now comes with strings attached – which demand that borrowers essentially build their climate change resilience into project scoping and design.”

Climate change impacts will require collective action that will require traditional silo thinking to be broken down.

To sustain resilience into the future, business needs to move beyond silo thinking.

Predicting the impacts of climate change, like the increase in the prevalence of fires, is difficult given the uncertainties so building resilience and systems to manage disasters will be key.

ENERGY

THE WIND AT HIS BACK

The South African Wind Energy Association has appointed Niveshen Govender as CEO. Govender undertakes a leading role in driving the country’s transition to a greener economy and brings along a vision founded on procurement, localisation and policy. Green Economy Journal met up with him. Congratulations, Niveshen, on your recent appointment of CEO at SAWEA. Besides this major accomplishment, what are the defining highlights of your career? My career has been purposefully dynamic so I could experience the different views of promoting and achieving a green economy, including starting off my career in consulting, where I

managed to gain broad experience across a range of areas. Thereafter, I moved to implementation, focusing on how to successfully execute large-scale projects which impact across the green economy landscape. I approached national government to better understand the policy development objectives and focused on renewable energy policy creation.

ENERGY My experience and exposure across the green energy sector has enabled me to take roles in the solar PV and now wind power industry associations, as I am able to translate policy into building an inclusive sector. What are your personal aspirations while at the helm of the wind industry? I believe that our industry needs to harness, accelerate and maximise localisation to move toward industrialising renewable energy in South Africa. Transformation goes hand-in-hand with this vision, so it is foremost and top of my mind. I am personally passionate about information sharing and skills development, so that we harness our collective talents and knowledge, which spreads naturally and helps to accelerate transformation. The SAWEA CEO is tasked with pursuing SAWEA’s vision and business plan as well as driving the successful implementation of the association’s strategy. Where do you start? Taking stock – my first 30 days will be spent taking stock of what we have achieved, the resources we have access to and developing a strategy on how I could best achieve my mandate.

I believe that our industry needs to harness, accelerate and maximise localisation to move toward industrialising renewable energy in South Africa. The DMRE has just announced that a request for proposals for 2 600MW from renewable energy, Bid Window 6, will be issued at the end of March this year, and that additional bid windows, including Bid Window 7, will follow at six-month intervals. What are the greatest challenges for the industry in relation to the REIPPP programme? While we continue to face an energy crisis, it is essential that our country remains geared to bring on more new generation capacity as quickly as possible, which points to renewable energy as the fastest and most cost-effective option. To achieve this, we need to consider the latest procurement rules, as there is currently a misalignment between the bid window procurement requirements and the sector capabilities. This will require additional dialogue with the relevant stakeholders, so that we can reduce the gap and make the necessary adjustments. Our industry is challenged by the transmission infrastructure restraints, particularly the grid capacity challenges in the Northern Cape as well as the Eastern Cape Province, which house the country’s best wind resources. The government has amended and gazetted the Electricity Regulation Act and the Electricity Pricing Policy for public comment. The sector has highlighted that the updated forecasting requirements also impact the power pricing tariffs. Please talk to us about the identifiable gaps and inadequacies in the penalties for deviation and how to overcome them. The challenge is not so much in the forecasting requirement but more based on the methodology used to calculate the forecast. I believe that there is a misalignment on understanding this and together we can develop solutions – this needs workshopping and working together. Should this not be considered now, the penalties will have an enormous impact on the operating IPPs.

While we continue to face an energy crisis, it is essential that our country remains geared to bring on more new generation capacity as quickly as possible. Please expand on the challenges that the industry is currently experiencing to execute unlicensed 100MW renewable energy projects as well as other independent power projects. While the 100MW licence exemption notice has sent positive signals, there are finer details which require attention, namely: • The NERSA registration process still poses challenges • The distributor connection agreements need streamlining • There is no national wheeling framework in place • Wheeling tariffs need to be developed Regarding private power purchase agreements, unclear policy for the 100MW reform needs to be clarified. The municipal energy procurement process also needs to be streamlined. Please advise on these two issues and expand on the benefits of your solution. I believe that we are already seeing the policy reform we have been calling for, including: • The changes and direction of those changes speak volumes • As a sector, we are happy with the step-change that is happening • We will continue to seek clarity in the details to ensure an open transparent market The next step is for us to work on the impact, namely how we create benefit to meet the country’s social imperatives. These include access to affordable electricity for all, addressing unemployment, inequality and poverty. These aspects need to be incorporated into the business-as-usual plan. What impact do grid capacity limitations cause? Will improved grid access make any difference to the transition? a. Grid capacity limitations stall the roll out of renewable energy projects in key areas. b. Improved access allows for us to deliver the much-needed new generation capacity. c. It is only with the new capacity that we will be able to transition.

CAREER BIOGRAPHY 2012-2015: Specialist: green economy | The Innovation Hub 2015-2016: Project manager | Department of Energy 2016-2021: Programme manager | South African Photovoltaic Industry Association (SAPVIA) 2019-2022: Chief Operating Officer | SAPVIA February 2022: Chief Executive Officer | SAWEA Niveshen Govender, with 12 years in the green economy environment, has ample experience to lead the wind industry. His vast knowledge and depth of experience ranges from carbon management and climate change to flagship energy project implementation as well as formulating and applying energy policy. His most recent position as COO at SAPVIA represents his passion for renewable energy and showcases his tireless dedication to advocating on behalf of members through engagement with government on various levels.

ENERGY

The Solar PV Revolution in Numbers Solar photovoltaic technology has advanced at an astonishing pace over the past 15 years, even against a 21st century background of rapid technological progress. BY POWEROPTIMAL COO, DR SEAN MOOLMAN THE PRICE OF SOLAR PV MODULES

The price of solar photovoltaic (PV) modules has reduced by 99.6% in real terms from 1976 to 2021, from US$106.10/W (about R1600/W) to $0.33/W (about R5.10/W).[1, 2] In January 2022, spot prices for polycrystalline solar PV modules on the international market were at $0.21/W (about R3.26/W).[3]

Solar PV Module Prices (2021 $/W).

ENERGY THE PRICE OF SOLAR (UTILITY SCALE)

The world record for the cheapest unsubsidised solar PV energy (at utility scale) in 2020 was for a project in Portugal at 1.316 US cents/kWh or about R0.20/kWh.[4] This is the price at which a private consortium is selling electricity to the Portuguese grid at a profit. The fact that Portugal has lower solar irradiation than South Africa makes it more impressive. In 2021, a new world record was again set for the cheapest unsubsidised solar PV energy, this time for a project in Saudi Arabia, where a bid for a 600MW project was awarded at 1.04 US cents/kWh or about R0.16/kWh.[5] In comparison, South African consumers in the four biggest metropolitan municipalities paid over R2.70/kWh on average for electricity in 2021/22 (read more here). The cost to Eskom for electricity from its new Medupi coal-fired power station in 2019 was R1.64/kWh, with the hope that it would decrease to R1.32/kWh by 2022.[6] In fact, just the raw material cost of coal in South Africa for producing 1kWh of electricity, was an average of R0.42/kWh as of November 2021.[7] This is before adding operating expenses and capital cost of a coal-fired power plant. Compare this to the best bid prices in South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 5 in 2021, which were R0.375/kWh for solar and R0.344/kWh for wind.[8] Thus, the cost of electricity from solar PV and wind in South Africa (to Eskom) is about four times lower than the cost of electricity from Eskom’s most modern coal-fired power station (Medupi) and is already lower than the raw material (input) cost of coal.

INSTALLED CAPACITY

With such a dramatic reduction in price, it is no surprise that the global installed solar PV capacity has been growing exponentially, reaching an estimated 900GW by 2021.[9, 10] For perspective, this is about 15 times South Africa’s total installed capacity of 58GW.[11, 12]

Global Solar PV Cumulative Capacity.

It is well known that there is a virtuous cycle where increased adoption leads to improvements in manufacturing and economies of scale, which leads to reduced pricing, which in turn leads to increased adoption. This is called the learning rate – for solar PV it is about 20%. This means that, for every doubling in global solar PV production capacity, the price decreases by about 20%.[13]

RISING EFFICIENCY

The cost of electricity from coal vs. solar PV (R/kWh).

While prices have been decreasing, efficiency has been steadily increasing. 16

The good news does not stop there. While prices have been decreasing, efficiency has been steadily increasing. (Efficiency for solar PV refers to the percentage of energy contained in the sun’s rays that is converted into electricity.) Better efficiency means a smaller roof space is required for the same power output (or you can get more energy from the same roof space). Higher efficiency PV modules also save in installation materials and labour cost (due to fewer modules needed). The theoretical efficiency limit for solar cells made of silicon (the current main base material used for solar PV modules) and which has a single junction is approximately 32%. This is called the Shockley-Queisser limit.[14, 15] However, by using multi-junction cells or other emerging technologies, this limit can be overcome. The theoretical limit for an infinite junction cell in normal sunlight is 68.7% and in concentrated sunlight 86.8%.[15] The current world record solar PV research cell efficiency (in other words, efficiency achieved for a single solar PV cell in the lab) is 47.1%, set in 2019.[16] Compare that to the best photosynthetic efficiency achieved by plants, which is about 4.3%.[17] This means we have already managed to improve on the best of more than three-billion years of organic evolution by a factor of 10!

ENERGY

World-record colar PV cell efficiencies achieved in the research lab.

Commercially available solar PV modules tend to be quite far behind the best lab efficiencies, due to manufacturing cost. The best commercially available solar PV module efficiency at the start of 2022 was 22.8%.[18]

SOLAR-PLUS-STORAGE

It’s not just solar that has seen dramatic progress in the past decade or two. Storage, mainly lithium-ion battery storage, has also been improving at a rapid pace. The price of lithium-ion batteries has fallen by 97% over the past 30 years, with prices falling at an average of 19% for every doubling of capacity (the learning rate).[19] There is a concept called “grid parity”, where the cost of renewables becomes cheaper than the cost of electricity from the grid. While this has already been achieved for solar PV in most countries, the problem is the intermittency of solar PV. This brings us to the related concept of “solar-plus-storage grid parity”, which is where the combined cost of solar PV plus (typically lithium-ion battery) storage becomes cheaper than the cost of electricity from the grid. At this point, it makes financial sense to go completely off-grid for a household’s or business’ electricity requirements. Grid parity for solar-plus-storage has already been reached in some European countries[20] and is projected to be reached for most countries before 2030, including countries like South Africa and India.[21, 22, 23] According to an analysis by Nedbank, already since 2021 a financed solar-plus-storage system of R150 000 in South Africa would yield a net monthly saving (in other words, the reduction in the electricity bill is larger than the instalment on the loan to finance the solar-plus-storage system).[24] This analysis was not for a fully off-grid system, however it does confirm that grid parity is fast approaching. With a plethora of promising battery technologies under development (see for example here, here and here), the momentum seems unstoppable. Are we nearing the plateauing of improvements in solar PV technology? It seems not – in recent years, once-exotic technologies such as half-cells and passivated emitter and rear contact (PERC) have become mainstream. With a long list of promising technologies appearing on the horizon, the future looks rosy. Perovskite and multi-junction cells could potentially take us past the Shockley-Queisser limit for commercial modules, as can quantum dots, which entails adding a quantum dot-containing film to a standard silicon solar PV module to boost efficiency to about 35%. Since adding such a film is an easy addition to the manufacturing process, it should be scalable and cost-efficient.

Then there is the fascinating concept of Super Power coined by RethinkX – the idea that it would make financial sense to install three to five times more solar PV generation capacity than is required at peak time. This would make for the lowest overall grid cost due to much less battery storage being necessary and would in turn make for a huge surplus of near-zero marginal cost energy, that would create new growth opportunities and new ways of doing things. MORE INFO HERE REFERENCES 1 Our World in Data. Solar PV module prices. 2 Gifford J. 2022. Higher PV module prices may point to stable demand and more sustainable pricing trends. 3 PVInsights. 4 Tsagas I. 2021. The weekend read: The recent evolution of solar PV energy costs. 5 Saudi Arabia achieves two new world record solar tariffs. 6 Mallinson C. 2020. Coal or renewables? The answer is in the numbers. 7 Cohen T. 2021. Renewable energy: “Reipppping’ the whirlwind of green power projects in South Africa. 8 Planting S. 2021. Best plan to keep the lights on: Solar and wind power officially cheaper than coal. 9 Our World in Data. Solar PV Cumulative Capacity. 10 Rai-Roche S. 2021. Global solar installations to hit 191GW in 2021 – BNEF. 11 USAid. South Africa Power Africa Fact Sheet. 12 Booysen MJ & Rix A. 2021. South Africa’s power grid is under pressure: the how and the why. 13 Roser M. 2020. Why did renewables become so cheap so fast? 14 The Shockley-Queisser limit. 15 Wikipedia. Shockley-Queisser limit. 16 NREL. Best Research-Cell Efficiency Chart. 17 Wikipedia. Photosynthetic efficiency. 18 Lane C. 2022. Solar panel efficiency: how much it matters, top brands & more. 19 Ritchie H. 2021. The price of batteries has declined by 97% in the past 3 decades. 20 Martin JR. 2019. Solar-plus-storage grid parity sweeps through top EU markets. 21 Niclas. Grid Parity: definition of the holy grail in solar energy. 22 Pandarum A. “Price Parity” of Solar PV with Storage? 23 Gupta U. 2021. Financial feasibility of behind-the-meter solar-plus-storage in India. 24 Ching’andu B. 2021. Business Case for Residential PV. SAPVIA Webinar 29 July 2021.

ENERGY

Technology Advancements to Lower

SOLAR POWER

Costs Over Long Term Solar power may continue to see declining costs over the long term, resulting from technology advancements as well as a reduction in soft costs that are set to take place over the coming years. BY FITCH SOLUTIONS

he cost of solar power has declined significantly over the past decade, with the levelised cost of energy (LCOE) for solar falling from a weighted average of USD248/MWh in 2010 to USD68.4/MWh in 2019. According to financial advisory and asset management firm Lazard, the LCOE for utility-scale solar power reached USD36/MWh in 2021. The steep decline is the result of several factors including a rapid decline in module costs, increased competition and economies of scale from significant growth globally. Notably, soft costs, which include customer acquisition, permitting, financing and installation costs, continue to account for a significant portion of overall project costs. Increasing cost-competitiveness plays a key role in our upbeat long-term solar growth outlook, in which we forecast global solar capacity will increase 144% from 716GW in year-end 2020 to 1 747.5GW in 2030.

Ongoing improvements in solar cell technologies, particularly perovskite solar cells, present the potential for additional significant improvements in conversion efficiencies and sizeable cost declines by the middle to end of the coming decade.

Matt Klug

Key View

Above: Atomic scale view of the perovskite crystal structure forming (self-assembling). The potassium ions (in red) are decorating the surfaces of the structures to heal defects and immobilise the excess halides. Below: Global: Solar capacity, MW and generation, TWh (2020-2030).

LONG-TERM GROWTH OUTLOOK

IRENA, Fitch Solutions

Improvements to the technology of solar project components will reduce project costs and improve the overall efficiency of solar power projects. Anticipated technology advancements are: More powerful and efficient modules. Solar module manufacturers will continue to make technological advancements towards more powerful and more highly efficient models. The increase in power modules also coincides with improvements in overall proficiency, with manufacturers working towards efficiencies upwards of 23-25%. This in turn will reduce costs throughout the solar project value chain, as using fewer modules will reduce the amount of racking, tracking and balance of system

e/f = Fitch Solutions estimate/forecast.

ENERGY

in 2020, according to the National Renewable Energy Laboratory. That said, advancements in solar PV module, racking, tracking, and inverter components will reduce installation and labour costs. Furthermore, it is anticipated that governments around the world will continue to work towards streamlining permitting and financing processes and improving policy to encourage both solar and wind power investments as they work towards net-zero and renewables targets. For example, the Dominican Republic’s National Energy Commission has been working with ProDominicana, the country’s export and investment centre, to create a new streamlined platform that foreign investors can use to invest in the market’s non-hydro renewables sector.

(BOS) components, labour hours, shipping and in some cases even the amount of land required for the project. Improved tracking technologies. Single-axis and dual-axis solar tracking systems boost project yields by up to 40%. As such, while tracking systems lead to higher capital costs, they are increasingly being adopted by solar developers. Tracking manufacturers are now progressively focusing on creating products which expand the suitability range and ease of installation for solar PV projects on traditionally difficult and highcost terrains, including steep slopes, landfills or hilly landscapes. In addition, Fitch Solutions anticipates that manufacturers will continue to work towards improving their tracking system designs to reduce assembly, installation, and operation and maintenance costs further shrinking the cost difference between fixed-tilt and tracker systems. These advancements in tracking technology, as well as cost declines due to their increasing adoption, will expand the suitability of solar onto difficult terrain and further reduce costs throughout the lifespan of solar power projects. Digitisation in solar power projects. Advancing data analytics and digitisation within the solar industry will help developers cut development costs as well as operation and maintenance (O&M) costs. For example, using Artificial Intelligence and machine learning software can efficiently determine the ideal placement and design of solar power systems. Automated software can also speed up the process of project permitting, which remains a costly barrier both in terms of time and money, particularly in the US. For example, in July 2021, the US Department of Energy (DOE) launched the Solar Automated Permit Processing Plus (SolarAPP+) tool, a free platform that allows local governments to automate and significantly expedite the permitting process for residential solar projects. Finally, the increasing use of digital twins – digital replicas of real solar facilities that can analyse function and working conditions – can be used to both reduce costs and boost the performance and output of solar power plants. For example, companies can use digital twinning to predict the timing of when certain equipment will break, reducing O&M costs.

Schematic representation of two different configurations used perovskite solar cells.

Structure of perovskite solar cells (PSC): (a) HTL-free PSC and (b) ETL-free PSC.

IRENA, Fitch Solutions

HISTORICAL COST DECLINES

Soft costs will also continue to decline over the coming decade in markets across the world, both because of the technology improvements as well as increasing government support for the sector. According to IRENA, soft costs’ share of total utilitiy-scale solar PV costs range from 29% in German to 57% in Russia. Within the US where the permitting process is costly both in time and money, soft costs accounted for a respective 35%, 55%, and 64% of the cost of utility-scale, commercial and residential solar projects

Global: total installed solar capacity, MW and solar power LCOE, USD/MWh.

ENERGY

IRENA, Fitch Solutions

Select markets: share of utility-scale solar PV total costs by category, 2019.

Alex T. at Ella Maru Studio (University of Cambridge)

SOFT COSTS

In the last decade, perovskite materials have emerged as promising alternatives to silicon. This image shows an artist's representation of the inner workings of a perovskite solar cell.

Ongoing advancements in solar cell technologies, particularly perovskite solar cells, are creating the potential for additional significant improvements in conversion efficiencies and sizeable cost declines by the middle to end of the coming decade. Perovskites are materials that have the same specific crystal structure as perovskite crystals. Research into the use of perovskites in solar cells has progressed rapidly, with the conversion efficiencies for standalone perovskite solar cells improving from 3% in 2006 to a high of 25.8% as of December 2021. Layering perovskite material on top of silicon yields an even higher power-conversion efficiency with a potential limit of nearly 40%. For comparison, a typical silicon solar panel currently has an efficiency of around 20%. In addition, methods to produce perovskite cells are both cheaper and faster than silicon cells. For example, in 2020 researchers at Stanford University announced the invention of a manufacturing method for perovskite modules which costs USD2.70 per sq. metre, while a typical silicon module costs roughly USD27 per sq. metre. That said, several barriers to large-scale commercialisation still need to be addressed for perovskite solar cells, including the need to improve durability and reduce the risks of lead-toxicity. In December 2021, it was reported that the development of a tapelike film which can capture leaked lead in the event of cell damage could help alleviate the concerns surrounding lead-toxicity.

This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 (‘FSG’). FSG is an affiliate of Fitch Ratings Inc. (‘Fitch Ratings’). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

BUDGET SPEECH 2022 | COMMENT ON THE CARBON TAX

“While it’s understandable that the state is increasing the carbon tax as it looks to achieve its climate goals, it's missing a bigger opportunity to reduce emissions,” says Hohm Energy’s Ryan Steytler. “Eskom is one of the country’s largest polluters. By incentivising rooftop solar, especially at the residential home level, South Africa could dramatically reduce its dependency on dirty power and build a greener, stronger economy. Carbon tax will be used to financially disincentivise consumers from using carbon intensive energy sources, starting first with businesses.” He adds: “Implementing solar systems will reduce consumers’ reliance on carbon-based energy sources, reducing the imminent and future impact of the carbon tax.”

STORAGE

BATTERY TECHNOLOGY Primed for Diversification

To date, lithium-ion batteries have been the go-to technology for vehicle electrification and new stationary energy storage systems. However, the supply chain for lithium-ion production is under scrutiny. BY IDTechEx RESEARCH*

IDTechEx

hough sodium-ion may be suitable for the electric vehicle (EV) market, the deployment of alternative battery chemistries will be particularly prominent outside the EV and battery electric car segments. Therefore, IDTechEx forecasts the market for non-lithium battery chemistries in stationary storage to grow at a compound annual growth rate (CAGR) of 61% between 2022 and 2032. Over the past five to six years, lithium-ion (Li-ion) has been the dominant (non-pumped hydro) storage technology for longer-duration energy storage. Cheaper systems are required to provide storage economically without needing to access shorterduration, higher-value revenue streams, such as from frequency regulation or peak shaving. This has led to the development of battery chemistries using zinc, sodium and iron as well as flow battery designs that are more easily scaled. By 2025, IDTechEx predicts that non-lithium chemistries [including sodium-sulphur, redox flow batteries (RFB), secondary zinc-based (Zn-based) chemistries and sodium-ion (Na-ion)] to

n Li-ion n Non-lithium battery Share of stationary battery storage deployment (by GWh) in 2025.

account for over 10% of the stationary storage market by GWh (excluding pumped-hydro). However, it is not only alternatives to lithium that will see a diversification of technology, but Li-ion technology itself. At the anode, developments to silicon and lithium-metal could finally shift demand away from graphite. Difficulties in maintaining longevity are being overcome and the promise of noteworthy improvements to energy density has spurred interest in using these materials as Li-ion anodes. This is evident when looking at the large number of start-ups working on the commercialising of silicon and lithium-metal technology (often in conjunction with solid-state electrolytes). It is estimated that demand for silicon anode material will grow at a CAGR of 45.2% from 2022 to 2032. While anode development is largely driven by performance and energy density; cost and supply risk mitigation play a key role in motivating cathode development. The desire to shift away from cobalt, and even nickel, stems from anticipated supply bottlenecks to these critical materials. Lithium ferro phosphate (LFP) is therefore expected to recapture market share and expand into new territories, while the commercialisation of lithium manganese iron phosphate (LMFP) and lithium nickel manganese oxide (LNMO) will further diversify the materials used in Li-ion cells. Beyond materials and metal percentages, companies such as Nano One and 6K Energy are developing cathode synthesis processes that will help improve throughput and reduce energy consumption and waste – areas that will be critical in continuing the cost decline of Li-ion and in optimising their environmental credentials.

IDTechEx

* Report by Dr Alex Holland, senior technology analyst, IDTechEx

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STORAGE

BATTERY PRICES

Higher Metals Costs to Negatively Impact Margins for OEMs and Global EV Adoption Electric vehicle battery prices will remain high in 2022 as a result of elevated battery metals prices due to increased demand amid the race to electrify the global vehicle fleet. BY FITCH SOLUTIONS

Fitch Solutions

s battery metals remain one of the largest contributors to the cost of battery manufacturing, higher prices in 2022 will squeeze the profit margins of battery manufacturers and automakers alike as more electric vehicle (EV) models are deployed. Fitch Solutions therefore expects higher input costs to result in upside risks for battery prices in 2022 as long-term agreements with mining firms for the supply of key metals are entered into at substantially higher prices compared to 2020. Over the longer term, developments in the increase of battery recycling will lead to a more favourable battery metals supply outlook as a “closed-loop” metals supply environment offers better pricing mechanisms amid more metals being reused in newer EVs going forward. Fitch currently forecasts global EV sales to rise by 40.3% in 2022 as demand remains elevated amid the need to decarbonise the global vehicle fleet. Asia, Europe and North America will remain dominant markets for EVs over the 2021 to 2030 forecast period (see chart on right). These markets offer a large market to tap into while developing countries continue to lag with the possibility of higher EV prices stunting growth in these markets.

Global: electric vehicle sales, units and EV penetration rate.

STORAGE In the meantime, the shift towards more cost-effective lithium iron phosphate (LFP) battery chemistries is expected to tame the rising costs associated with more nickel-rich chemistries. Fitch Solutions currently forecasts the global share of EVs that use LFP battery chemistries to rise from 21.1% in 2021 to 30.3% by 2025. Higher costs of nickel-rich battery chemistries, such as the nickel manganese cobalt (NMC) and the nickel cobalt aluminium (NCA) chemistries, will necessitate the shift towards the more cost-effective LFP chemistry. The demand for battery grade nickel will far outstrip supply as automakers ramp up EV production. As a result, we expect NMC market share to decline from 51.1% in 2021 to 45.3% by 2025 (see chart below). Going forward metals retrieved from recycling operations will result in the NMC chemistry gaining a foothold once again from 2026 (with a market share of 45.9% rising to 51.4% by 2030) as this chemistry option offers higher energy density levels offering better range capabilities for EVs. Fitch Solutions

Global: EV sales by battery chemistry type, %. (e/f = Fitch Solutions estimate/forecast)

We have already seen automakers in China making the shift towards more cost-effective LFP chemistries while the likes of Tesla have indicated that it will offer the more affordable chemistry type for its entry-level EV models globally. More automakers are expected to make the shift as higher battery costs stunt the growth of nickel-rich batteries.

Moreover, the move towards cell-to-pack battery structures that remove the need for battery modules will also be more broadly implemented by automakers to ensure that rising costs are limited to the battery cell level and ensure automakers can deploy more EVs amid heightened demand globally. Some of these developments have already gained traction as Ford recently announced that it will utilise cell-to-pack designs as well as LFP battery chemistries to further reduce costs. While automakers will look to keep prices of fully built EVs constant to raise EV adoption globally, countries without any meaningful consumer-focused incentives will be vulnerable to higher battery costs going forward. Countries in the developing world with lower EV penetration rates (EV sales as % of total vehicles sold) will be affected should OEMs pass on higher prices when compared to more developed EV markets such as China, Europe and North America. This is due to relatively higher incomes in these latter markets and the prevalence of incentives to cut down the initial purchase prices of EVs. Countries that have little to no support will be vulnerable to further increases in already higher purchase costs of EVs relative to internal combustion engine (ICE) powered vehicles. It is expected that automakers will deploy mild and plug-in hybrid models for lower income markets as a way to cushion consumers from higher EV prices due to high battery costs.

STORAGE

ENERGY STORAGE IN 2022 Challenges and Opportunities

Energy storage technologies are undergoing a challenging transformation, vital in an emerging climate that necessitates renewable energies and recyclable hardware. BY IDTechEx RESEARCH

LITHIUM-ION AND MATERIAL DEMAND

LITHIUM-ION RECYCLING

Recycling offers a partial solution to both the sustainability and supply chain issues faced by the Li-ion industry by providing a degree of circularity – materials from waste and end-of-life batteries can be extracted and refined to be re-used in cell and battery manufacturing. This can have several beneficial impacts. It can diversify material supplies, helping to reduce reliance on any single country or region. Environmentally, Li-ion recycling, especially via hydrometallurgical or direct recycling routes, is expected to reduce the total energy requirements of producing a cell, compared to using virgin materials. Other emissions, including suphur oxides (SOx), nitrogen oxides (NOx) and particulates, in addition to carbon dioxide (CO2), are also expected

IDTechEx

Demand for lithium-ion (Li-ion) batteries is forecast to undergo rapid growth over the next 10 years, driven primarily by the electrification of transport. This will involve growth in demand for battery-electric cars, but also for a wide spectrum of vehicle types and segments, and it is these non-car segments that many pack manufacturers will be targeting. While lithium-ion will continue to remain the dominant technology in electric vehicles, the fears of potential bottlenecks to the supply of certain critical materials, such as lithium, nickel or graphite, may ultimately limit the rate of EV uptake. Concerns also exist over the environmental impact and sustainability of Li-ion production.

Mine Refinery Battery manufacturer Recycler Landfill (various locations) Without recycling, valuable critical metals will go to landfill creating both waste and safety hazards.

STORAGE to be lower by using recycled material over primary extraction. Local recycling and refining capabilities, as are beginning to be built up in Europe and the US, can also reduce the distance travelled by materials further reducing the emissions profile of Li-ion batteries. However, even if enough recycling capacity was built up to deal with the entire volume of waste Li-ion batteries by 2030, recycled material could only contribute a fraction of the material demand. To help alleviate possible supply chain constraints, several alternative battery and energy storage technologies are under development that may be able to replace Li-ion batteries in applications where energy density is not such a critical parameter. The applications for these technologies could include small, citydwelling electric cars, e-buses, hybrid electric vehicles, fuel-cell trucks or autonomous guided vehicles. But the array of energy storage technologies available and underdevelopment is most obvious in the stationary energy storage sector. This is true because energy density becomes a less critical factor in stationary energy storage, allowing a range of technologies to be utilised.

SOLID-STATE BATTERIES

SODIUM-ION BATTERIES Sodium-ion (Na-ion) has seen renewed interest after CATL’s announcement of their development of Na-ion. Similar in many ways to Li-ion batteries, Na-ion batteries utilise sodium (Na) as the working element instead of lithium (Li), as the name would suggest. Na-ion batteries are generally characterised by having slightly higher powers and cycle lives than lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP) Li-ion cells, but with slightly lower gravimetric energy densities. While Na-ion will of course reduce reliance on lithium, their cathodes can still make use of cobalt and nickel, and so whether they can be utilised to reduce reliance on these materials depends entirely on the specific cathode chemistries that will be used.

REDOX FLOW BATTERIES Redox flow batteries (RFBs) differ from intercalation batteries such as Li-ion and Na-ion, by storing energy in the electrolyte, separate to the electrochemical cell, thus allowing the de-coupling of energy power. This key aspect makes RFBs well suited to stationary storage applications, especially long-duration applications. Vanadium is by far the most widely deployed chemistry, with 15-20 companies commercialising vanadium systems. However, the high cost of vanadium leads to high capital costs that may be prohibitive to widespread use, though schemes such as

IDTechEx Research

With Solid Power and QuantumScape going public, solid-state batteries are attracting tremendous attention, especially for electric vehicle applications. Electric vehicles are the major motivation for the development of solid-state batteries, and many automotive original equipment manufacturers (OEMs) have announcements for the year ahead. There have been improvements in every section of solidstate battery technology: polymer, oxide and sulphide. Of these improvements, a notable one is that a lithium metal anode is essential to get higher energy density, upping the performance of solid-state batteries to make them more competitive. Moving from material/cell development to pilot and mass production is also an important trend. It is quite common to find solid-state battery players partner with automotive OEMs for further development.

THIN, FLEXIBLE AND PRINTED BATTERIES Thin, flexible and printed batteries have been spoken about for a while, with many of them having found niche applications. Lots of the batteries have mature technology but finding proper applications with large demand is the key to growing this technology. There are quite a lot of companies in the market working in this area, which means that competition is growing all the time. The company that identifies the most relevant applications – those which require the special features of thin flexible and printed batteries – will be the one to succeed and corner this market.

Location overview of major solid-state battery companies.

STORAGE

The use of hydrogen for energy consumption, where there are alternative solutions, may not be the optimal choice.

IDTechEx

electrolyte leasing are being explored to try and reduce the initial capital expenditure. Nevertheless, the high cost of vanadium has led to the development of alternative RFB chemistries that utilise low-cost active materials, such as the all-iron-based chemistry being developed by ESS Inc or even flow batteries that can utilise low-cost, widely available organic compounds as the electrolyte active material.

Growth expected in demand for electrolysers.

Flow batteries can independently scale energy and power.

ALTERNATIVES AND HYDROGEN

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Non-electrochemical technologies such as gravitational storage or cryogenic air storage are also being explored, but they are at an early stage of development and may not be suitable for economic storage over longer timeframes. Balancing of supply and demand for grids utilising high percentages of variable renewables will require a combination of energy storage, overcapacity, interconnection, and other solutions like vehicle-to-grid capability and demand-side response. A variety of non-electrochemical storage technologies, from supercapacitors to compressed air energy storage is being explored for stationary applications. Green hydrogen is also discussed as a potential solution for longduration energy storage and continues to receive government support. Electrolysers, whether polymer electrolyte (PEM), alkaline or solid-oxide type, can be used to produce hydrogen from water to be stored for use later. Whether long-term storage of hydrogen will become feasible remains to be seen. Storage in gas cylinders may be too costly, while underground storage in

THOUGHT [ECO]NOMY

aquifers or salt caverns for example has geographic constraints and remains relatively untested. An alternative hydrogen (H2) storage method being explored consists of injecting H2 into existing natural gas pipelines where there is an inherent energy storage capacity, though there will be limits to the amount of hydrogen that can enter current gas networks. Beyond this, electrolytic hydrogen will be necessary to green various industries such as ammonia, steel or chemicals production. The use of hydrogen for energy consumption, where there are alternative solutions, may not be the optimal choice. Instead, it is demand from industrial sectors which IDTechEx expect to drive demand for electrolysers and green hydrogen.

Storage projects in Varel, Lower Saxony, Germany using NaS (sodiumsuphur) batteries. For more information on NaS batteries in South Africa, please email Lloyd Macfarlane, Altum Energy at lloyd@altum.energy.

MIDDLE EAST AND AFRICA INFRASTRUCTURE INSIGHT | Global Lithium Outlook | Fitch Solutions [July 2021]

greeneconomy/report recycle

Read more on: - Lithium supply. Investment hot spots, scale of the upcoming lithium supply, project pipeline and potential; recycling. - Geopolitics and government interventions in the lithium sector. - Lithium demand. Hydrogen versus batteries, lithium hydroxide

versus concentrate, risks of a return of lithium oversupply. - Battery supply chain, auto manufacturers’ strategies: battery type trends, battery supply chain trends and automakers’ strategy on raw materials.

TRANSPORT

Six Future MOBILITY TRENDS In the past 20 years, electric vehicle start-ups have moved from obscurity into some of the world’s most valuable companies, most automakers have committed to an electric future and flying electric taxis have started to leave the pages of science fiction. BY LUKE GEAR*

he rapid pace of change has been enabled by technological leaps in the underlying componentry and materials, from lithium (Li-ion) batteries to light detection and ranging (LiDAR). But there is still a long way to go as the industry strives to close the performance gap with internal combustion engines, increase safety, lower costs and overcome regulatory barriers.

Electrification is global and is happening in all sectors. A decade ago, IDTechEx’s 2011 report “bullishly” predicted 1.5-million battery-electric car sales by 2021 – this turned out to be an underestimate by over half, as China, the US and Europe all grew their markets last year. The sheer volumes and successes of electric vehicles in the automotive market are driving down costs, creating opportunities for many other mobility sectors.

On the waterways, electric ferry deliveries have boomed to ~80MWh yearly as battery pack costs fell below $600 per kWh, energy densities improved and thermal management innovations vastly increased safety. Similar drivers are pushing forward investment into electric air-taxis, with American Airlines, Virgin Atlantic, United Airlines, UPS and Avolon having all placed pre-orders. Electrification is not so much unstoppable as inevitable and will continue to play a dominant role in the decarbonisation of mobility.

Autonomous vehicles will transform the automotive industry – again. Just as the industry grapples with massive changes in powertrain technology, IDTechEx expects commercial autonomous cars, or robotaxis, to be market-ready and match

TRANSPORT or exceed human safety by as early as 2024. Projecting forward current safety data, the implication is autonomous cars will be capable of fulfilling the world’s mobility needs without a single collision before 2050. As a result, autonomy will have a profound impact on the travel habits of consumers: having removed the highest cost of current popular ride-hailing services – the driver – robotaxis will enable affordable mobility services, driving the market to grow rapidly at 30% compound annual growth rate. Private car ownership will become a relic of the past for new generations, and since one autonomous car has the capability to serve multiple people a day, fundamental demand for new cars is expected to fall even as global passenger-miles increase.

Lithium-based batteries will continue to be the great enabler for electrification. Without the popularisation of the Li-ion battery by Sony in the 1990s, electric vehicles (EVs) would still be the horse that lost the race to the internal combustion engine. Battery technologies are evolving rapidly and there are many important market developments taking place. As battery costs level, the key focus for the industry will be increasing sustainability of raw materials and supply chains while ensuring there is still enough supply to meet the huge demand. Later in the decade, a move beyond Li-ion towards the holy grail of solid-state and lithium-metal batteries is critical for a stepchange in safety and performance, and to open the door to new applications such as electric long-haul aircraft.

Advanced motors and power electronics are key to lowering cost and increasing range. Improving the efficiency of power electronics and electric traction motors is key to either increasing range or downsizing batteries (reducing costs). Two important trends in these areas are market convergence on permanent magnet motors and a transition towards wide bandgap semiconductor devices. Due to their high performance and superior efficiency, permanent magnet motors are the default technology for traction applications and their market has naturally grown with the runaway success of electric cars. However, magnets make end-oflife recycling difficult, and raise concerns regarding price volatility and sustainable mining practices, with most material mined and sourced in China. Long-term reliance solely on permanent magnet machines is looking increasingly unsustainable, with warning signs starting to show in high neodymium prices – the primary ingredient of rare earth magnets. Magnet-free and even copper-free motor solutions are gaining interest and momentum. While motors are not as materially diverse as batteries, in a similar way we expect automakers to diversify their strategies to adopt several technologies to balance performance, sustainability, market demand and cost. Meanwhile, a switch to wide bandgap power electronics is well underway, predominantly with silicon carbide metal-oxidesemiconductor field-effect transistor (MOSFET) devices. By 2030 roughly half the electric car market will have switched to these

Electrification is not so much unstoppable as inevitable and will continue to play a dominant role in the decarbonisation of mobility. * Luke Gear is principal analyst at IDTechEx Research

efficient devices, enabling efficient high voltage powertrains. Early in 2022, Mercedes showcased the Vision EQXX concept capable of 1000km. While there is a lot of technology behind this concept, including solar bodywork, design (drag factor), silicon anode batteries and axial flux motors, a key enabler is the 900V platform – something only practical with silicon carbide.

Private car ownership will become a relic of the past for new generations.

Powertrain safety via thermal management will be critical as the market matures. As original equipment manufacturers (OEMs) scramble towards electrification, battery safety is sometimes missed or not fully realised. This was publicly highlighted in a big way during 2020-2021 thanks to the safety-related recall of GM’s Bolt costing approximately $1.9-billion and they aren’t the only automaker that had EV recalls relating to potential fire risks. The way in which batteries are designed is evolving at both a cell and pack level. Battery chemistry is evolving with higher nickel cathodes being adopted, lithium iron phosphate (LFP) batteries making a resurgence and more attention being paid to solid-state batteries. These changes have a profound impact on the requirements around thermal management and materials in EV batteries. Outside the cell, we see OEMs transitioning towards cell-topack designs with announcements from Tesla, Stellantis, BYD, VW and more. This fundamental change in battery pack structure leads to changes in how thermal strategies and materials are incorporated, including thermal interface materials, coolant channels and fire protection. While much attention is focused on the battery, electric motors and power electronics are literally the driving force behind EVs and present their own thermal management and materials challenges. Permanent magnet motors require a specific operating temperature to avoid damage. Additionally, allowing the copper coils in a motor to get too hot can lead to reduced efficiency or damage to the winding insulation. The silicon carbide transition in power electronics is also presenting a host of package-level thermal challenges to deal with the increased junction temperatures including wire bonding, die-attach, and substrate technologies.

Hydrogen fuel cells are the last piece of the puzzle to decarbonise land transport. While the race is being led by battery electric vehicles, battery solutions can’t always deliver for use cases that require significant range, high loads, brief downtime and high operational flexibility. For example, long-haul trucking and high-mileage city bus operations. In addition, while demand is high and outstrips supply, batteries will be prioritised into lightduty sectors where they are most profitable. All this is creating opportunities for fuel cells, and giants like Toyota, Hyundai, GM and Daimler are continuing to pump millions into improving fuel cell system technology and wider hydrogen infrastructure. Fuel cells have many weaknesses compared with batteries but should not be discarded in heavy-duty segments to help meet climate goals.

TRANSPORT

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THOUGHT [ECO]NOMY

GREEN TRANSPORT STRATEGY FOR SOUTH AFRICA [2018 – 2050] | Department of Transport

To address the significant contribution of transport to national greenhouse gas emissions (GHG) emissions, government through the Department of Transport has developed a Green Transport Strategy (GTS), which aims to minimise the adverse impact of transport on the environment, while addressing current and future transport demands. The strategy will promote green mobility to greeneconomy/report recycle ensure that the transport sector supports the achievement of green economic growth targets and the protection of the environment. South Africa faces challenges in reorienting to a low-carbon economy. Transport activity levels are strongly related to socio-economic drivers, in particular growth in population and GDP. Effective and accessible transport is a vital enabling factor for economic growth. Transport is also a critical factor in urban spatial planning. The spatial footprint of the private car is many times greater than that of public or non-motorised transport. As a result, scarce urban space is allocated inefficiently. The sector has also had to confront the legacy of apartheid spatial planning which has resulted in fragmented and inefficient transport systems. These travel patterns impact substantially on air quality and climate change. Interventions to transform the transport sector should therefore include lessening the movement of goods and people, shifting to low-carbon modes of transport and improving energy and fuel efficiency. Sustainable transport is essentially the capacity to support the mobility needs of people, freight and information in a manner that is least damaging to the environment. Sustainable development applied to transport systems requires the promotion of linkages between environmental protection, economic efficiency and social progress. Under the environmental dimension, the objective consists of understanding the reciprocal influences of the physical environment and the practices of the industry and all aspects of the transport industry to address those environmental issues. Under the economic dimension, the objective consists of orienting progress in the sense of economic efficiency. Transport must be costeffective and capable of adapting to changing demands. Under the social dimension, the objective consists of upgrading standards of living and quality of life. Transport systems form the backbone of South Africa’s socio-economic activities through enabling the movement of people and products. Apartheid planning and marginalisation of some communities has left a legacy of transport networks that are poorly integrated, resulting in most citizens living far from work, and with inadequate transport infrastructure. Notwithstanding growing demand for transport, the sector has a critical role to play in achieving South Africa’s GHG reduction targets and the Department of Transport will need to focus all resources available to meet these ambitious targets.

Taxation and fiscal policy

36 43 Cleaner fuels

Transport adaptation and mitigation

Enablers and barriers for green transport

Options for financing green transport

MINING

Key Focuses in

New Tailings Standard Mines have for decades had to comply with the prevailing legislated environmental regulations, however the revised Global Industry Standard on Tailings Management has shifted the ground. BY SRK CONSULTING*

esponding to a new world of expectations, the standard demands a more systematic integration of environmental monitoring into the tailings management system. This means that technical reporting on (TSFs) must now include an environmental component to improve the way that tailings storage risks are managed. While the stability and integrity of the structure are key to tailings storage facilities safety concerns, risks like seepage and contamination plumes are also highly relevant to both safety and environmental sustainability. Although environmental reporting in TSF quarterly reports is improving, the Global Industry Standard on Tailings Management (GISTM) demands that action plans are developed, and that these are proactively implemented in an integrated way. The GISTM calls for environmental – along with social and local economic – impacts to be assessed on an ongoing basis, so that any material changes can be addressed using best practices in adaptive management. Effective monitoring is therefore vital, including a regular review of the effectiveness of monitoring efforts. This way, mines can continuously assess whether their monitoring equipment – including its location and application – and their associated sampling programme are providing data that is valuable to decision-making. To remain cost-effective, monitoring requires the judicious allocation of resources based on scientifically valid analysis of results.

The GISTM highlights the need for mines to maintain an interdisciplinary knowledge base. The monitoring focus needs to be on areas of potential risk, which the data can help to identify over time. These efforts can assist in both highlighting risks and in mitigating them. Seepage points around a TSF, for instance, might be picked up by inspections or sensors, that will inform further investigation to determine whether there are any associated risks or impacts. Similarly, potential contaminants might be identified which need to be contextualised against baseline studies; this baseline data, often augmented over many years, is a valuable resource that needs to be well managed as part of every mine’s knowledge base. The GISTM highlights the need for mines to maintain an interdisciplinary knowledge base. Monitoring of environmental risks requires disciplines like geochemistry, hydrogeology,

MINING hydrology, hydropedology and porous media hydraulics. While these focus on risk mitigation, there are still further disciplines involved in relation to TSF failure, such as disaster management and engineering response and recovery. Specialised expertise is also required to identify and monetise biophysical and ecological resources that provide valuable ecosystem services to local communities and broader society. These assessments are relevant to livelihood resilience, economic risk, resettlement costs and ongoing community engagement. Closer collaboration between engineering, environmental and social disciplines is required, with channels of communications that allow information to be shared, including the data from these disciplines’ respective monitoring efforts. Ideally, a tailings management system must incorporate relevant environmental data, preferably in real time.

One underlying concern that is key to TSF-related social engagement is the potential for, and implications of, catastrophic failure. The GISTM also firmly links environmental threats with socio-economic risks – which are often managed by separate departments within a mine’s management structure. If these departments operate in silos, it will be challenging to achieve the integrated approach that the standard requires. *Written by Franciska Lake, Jacky Burke, Justin Walls, Matthew Law from SRK Consulting

Click on the GISTM link

Social Engagement Prioritised in New Tailings Standard It’s probably not by chance that the first principle of the Global Industry Standard on Tailings Management (GISTM) is to “respect the rights of project-affected people” and to “meaningfully engage them at all phases of the tailings facility lifecycle”. This social focus reflects not only the potential vulnerability of communities close to tailings storage facilities (TSFs), but also aligns with the broader trend to integrate ESG factors into tailings management. While social engagement with project-affected people is a well-established practice in various permitting, licensing and authorisation processes, the GISTM requires engagement that endures for the operational life of the tailings facility and into closure – which in turn implies the need for a social engagement plan for the lifetime of the mine and beyond. Such engagement should extend to all stakeholders, including regulators, local government, traditional authorities, landowners, communitybased organisations, local communities and the broader public. This engagement should form part of the mine’s Environmental and Social Management System (ESMS), which the GISTM in turn requires to be incorporated into – or to at least inform – the Tailings Management System (TMS). This presents one of the initial transitions that mining operations will have to make to comply with the GISTM and to ensure that on-site responsibilities are aligned, collaboration is fostered and the two sub-systems of an ESMS – the social and the environmental – are integrated with engineering aspects on site.

The effective integration of engineering, socio-economic and environmental aspects will require a coalescence of data and skills sharing between these spheres. And so in this way, engineers will be better equipped to understand and anticipate socio-economic risks, and to disseminate relevant information in a stakeholderfriendly format, which will build trust and respect between mine operations and stakeholders. One underlying concern that is key to TSF-related social engagement is the potential for, and implications of, catastrophic failure. It is thus critical for mining operations to understand community dynamics in order to prepare effective emergency response and recovery plans for these eventualities. This is just one example which social engagement can help to address. Others include the identification of risk factors, planning for spatial or economic displacement, social vulnerability, resettlement and compensation as well as livelihood restoration. Aligning with GISTM requirements will include ongoing surveillance programmes that identify changes in social systems and valuable ecosystem services to communities. As part of impact identification and mitigation, there is also a need to establish direct mechanisms for stakeholders to share their unique knowledge and understanding of the area. Social engagement related to TSF management needs to build trust and stakeholder capacity, demonstrating a respect for human rights that informs management decisions throughout the TSF lifecycle. *By Vassie Maharaj, Franciska Lake, Matthew Law

TOURISM

WHERE NATURE TAKES CENTRE STAGE In 2002, 500km² of agricultural land in the Little Karoo along the world-famous Route 62, was earmarked for the creation of a 58 000-hectare reserve. The vision was to conserve the heritage, ecosystems and landscapes, while creating employment opportunities in one of South Africa’s most dire rural areas. This dream was a big one.

he significance of a nature reserve dedicated to conservation in a region where the natural vegetation has been, and continues to be, transformed by agriculture, cannot be understated. Rehabilitated to a more “natural” state, it allows the reintroduction of animal species with the focus on those that, now rare and endangered, had been historically eradicated. 20 years later, Sanbona Wildlife Reserve is one of South Africa’s largest privately-owned nature reserves, stretching across miles of rich protected ecosystems within two globally recognised biodiversity hotspots. The reserve’s conservation model has been honed over decades to identify key projects that establish resilient ecosystems, landscapes and communities. These aspects are all essential to success and are practiced and managed by a stellar conservation team. Sanbona aims to create balance where critically important ecosystems, endangered wildlife and flora can prosper for the benefit of future generations. The reserve embodies an authentic and contrasting natural space, whose commitment to conservation is imparted and intricately woven into our guest experiences. The reserve’s convenient location along Route 62, a mere 3.5 hours from Cape Town, extends 58 000 hectares of big, Karoo sky country with breath-taking sceneries that will transport you to a place where time stands still and nature takes centre stage. It’s remarkable how one only needs to travel only 270km outside the hustle and bustle of the Mother City to reach this place of tranquillity. It’s a holistic environment.

Sanbona Wildlife Reserve appeals to anyone with a love of travel, an interest in wildlife and a passion for learning more about their local surroundings.

The development and progress of the reserve were so impressive, that it piqued the interest of the CALEO Foundation which acquired Sanbona Wildlife Reserve in 2015. The reserve entered a new phase of its vision. For many years Sanbona was run as a hospitality business for profit, today, Sanbona is a flagship example of private conservation in the Western Cape province. The CALEO Foundation transformed it into a non-profit company

(NPC) to fulfill their philosophy of the long-term protection and conservation of Sanbona as a thriving wilderness area. Sanbona Wildlife Reserve appeals to anyone with a love of travel, an interest in wildlife and a passion for learning more about their local surroundings. The reserve takes a “safari stay” one step further by offering an educational experience where our guests are introduced to a unique and arid landscape that they may not necessarily be used to. One can indulge in the pleasure of viewing big game like elephant and cheetah, smaller game species like brown hyena, steenbok and klipspringer, to insightful information on the regional endemic flora. Sanbona offers a selection of three luxury lodges, each with their own distinct personality and appeal, and a seasonal Explorer Camp for the more adventurous at heart. Dwyka Tented Lodge is opulent, positioned under some nesting Verreaux’s eagles in the bend of a dry riverbed. Nine luxury suites, each one-part tent, part cabana, look out over the riverbed to the towering rock face scarred with ancient caves and crags. Its identity is rooted in the style of an African safari encampment synonymous with adventurous expeditions into unknown Africa. Tilney Manor was designed in true Cape Georgian style, it is perfect for guests in need of an exclusive Karoo experience. This refined and elegant lodge offers an intimate space with only six suites and a bespoke heritage lounge. Gondwana Family Lodge is the perfect family retreat in its configuration with inter-connecting suites and sleeper couches, all complimented with a tailored Kids on Safari programme to inspire the eco-warriors of the future. Seasonal Explorer Camp allows intrepid guests to stay in a canvas tent in a shaded riverbed, inviting them to experience the life of a pioneer in an area of the reserve that’s as remote as it is pristine and untouched. And if health and wellbeing are a concern, each lodge provides relaxation retreats offering a range of therapeutic treatments. On game viewing safaris, guides introduce guests to the story of the reserve’s flora and fauna, to its geology and ecosystems, its conservation and its management systems, its recent history and the story of its distant past. There are guided nature walks on which guests are able to discover the smaller creatures, smell the plants and see spoor at first-hand, and have a conversation about a little-known natural world that’s richly presented in the Klein Karoo. Bird watching, rock art and star gazing complete an exciting safari option very close to Cape Town. This holistic haven is a place where you can truly leave behind the city confines and find peace for your mind.

Jordan Davidson

A Q U I E T M I R AC L E I N T H E L I T T L E K A R O O Reconnect with the magic of simply being in nature. Conserving an ancient heritage while preserving threatened ecosystems and sensitive landscapes, Sanbona offers a sustainable eco-tourism safari to explore 58 000 hectares of unbroken Little Karoo country just 3 hours outside of Cape Town, along Route 62. Sharing the regions unique and rich biodiversity, the reserve takes a holistic approach to offer a complete nature and wildlife experience. Malaria-free and more than just a Big Five wilderness reserve, disconnect at one of three intimate Lodges where time stands still and nature takes centre stage.

T +27 (0) 21 010 0028

E reservations@sanbona.com

www.sanbona.com

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Green Economy Journal Issue 51

Articles inside

TRANSPORT Six future mobility trends

TOURISM Sanbona Game Lodge: where nature takes centre stage

MINING Key focuses in new tailings standard

Battery prices

The solar PV revolution in numbers

NEWS AND SNIPPETS

Technology advancements to lower solar power costs over long term

Energy storage in 2022

STORAGE Battery technology primed for diversification

ENVIRONMENT Building resilience is key to managing climate change risks

ENERGY Exclusive interview with Niveshen Govender the new CEO of SAWEA