LEKELA
LEKELA
Turning Up the Focus
on African Renewable Energy PRODUCTION: Karl Pietersen
With six commercial wind farms soon to be fully operational across Africa, Lekela is demonstrating the potential of clean energy for both investors and local communities. “No longer are these things just about environmental well-being, they are now the economic choice,” says Lekela COO, Chris Ford.
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“Lekela’s vision is to be the go-to renewable energy company and investor and operator in Africa. But it goes beyond that to contributing to the development of Africa, value creation in Africa, and, of course, the economic and social development of our host countries,” says Chris Antonopoulos, CEO of Lekela. After its establishment in 2015, Lekela has taken firm and fast steps towards this vision and, without compromise, has delivered clean energy, value, and community
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upliftment. In just six short years, the company has carved out a reputation for offering best-in-class delivery of clean power in African countries. Developing renewable energy resources is no more an effort of the green community and undertaken with environmental protection as the foremost idea. Today, clean energy is a dream for investors. The technology is cheaper, the desire for clean energy is larger, the roll out has a proven blueprint, and – perhaps most importantly –
projects are now offering up significant return on investment. But the Covid pandemic has wreaked havoc across the energy sector, forcing sites to close, slowing projects, and reducing development. Every company has felt some impact. For Chris Ford, Lekela’s Chief Operating Officer, there have been challenges to navigate. “In February/March 2020, we had four wind farms under construction and that was the busiest period in our history as Lekela,” he remembers.
Noupoort Wind Farm
INDUSTRY FOCUS: ENERGY
“Facing an unknown risk like Covid was a challenge for the business but I think we rose to it very well. We managed to commission and get the two windfarms in South Africa online very successfully. We had a couple of months of delay because we were prevented from accessing the site because of the lockdown. It was the same in Senegal, and initial implications for us were about making sure our own employees and our communities were safe and not spreading the virus. “We put in place extremely strong protocols to ensure hygiene was maintained and we received a really rewarding response. We continued with construction activities in Egypt and the project is on track despite being in the middle of the worst period where components were still being manufactured in China and India with potential disruption in supply chains.” Of course, this disruption is unwelcomed in the energy business. Demand for power is unending and negative supply issues lead to more than just unhappy customers. The smaller grids powered by Lekela’s projects around Africa are vital for local communities and power hospitals, schools and other vital infrastructure. “It’s not as if we can just switch off the wind farms and wait for the pandemic to go away,” says Ford. “A big focus for us was ensuring the wind farms always continue to produce. Our teams did an excellent job and we didn’t have any slowdown at all on the operational sites.”
// RENEWABLE ENERGY IN AFRICA IS TAKING THE MAIN STAGE. IT’S NO LONGER A NICHE PRODUCT AND IS THE CHEAPEST SOURCE OF POWER // 4 / www.enterprise-africa.net
WIND POWERED MILESTONES In November 2020, Lekela announced that its Kangnas wind farm, located close to Springbok in South Africa’s Northern Cape, had achieved commercial operation following the end of construction activity in August. This important milestone also marked the completion of the five wind-farm portfolio that Lekela holds across SA. Along with Perdekraal East, Noupoort, Loeriesfontein and Khobab, Kangnas brings Lekela’s total capacity to more than 600MW – that is enough clean power to supply 485,000 SA homes for the next 20 years. Kangnas is home to 61 Siemens SWT-2.3-108 wind turbines, each reaching 168m into the sky, helping to eliminate 550,000 tonnes of carbon emissions each year. Currently, the South African government is busy introducing three new renewable energy procurement rounds which should total 6800MW in 2021. Lekela has the experience and know-how to contribute in a big way. The country’s Integrated Resource Plan aims to diversify the energy mix, which still relies heavily on coal. “South Africa was one of our first markets and it has been one of the biggest renewable markets on the continent. I was fortunate enough to be involved with the Round 1 projects when it first started but we are now through Round 4 and moving towards Round 5,” says Ford. “2020 was extremely busy, getting those two projects in South Africa finished and then embarking on the projects in Senegal and Egypt - the pandemic striking was not a brilliant time for us. “Lekela’s first project was a Round 3 project and it started with the Noupoort Wind Farm, an 80MW wind farm which is mid-size for South Africa. It’s connected to the grid and we contract directly with national energy entities, supplying bulk electricity to the grid.” Loeriesfontein came online in December 2017, alongside Khobab,
offering up 140MW each, from a single 6653-hectare site in the Northern Cape. During construction, the projects achieved more than two-million-man hours without a single lost-timeincident. 122 turbines across both of the sister wind farms power some 240,000 homes. “Last year, we added another two large projects,” details Ford. “Perdekraal East is 110MW and came online in October and then Kangnas is 140MW which came online in November. Those were really interesting projects and were under construction when the pandemic struck. At the same time, we were also building projects in Senegal and Egypt.” AFRICAN POWER The UK is expected to fuel its entire electricity demand by wind by 2030. Europe has made major commitments to increasing its use of wind, aiming for 50% of its total energy mix by 2050. The USA, under President Biden, is attempting to kickstart its wind energy sector, which lags behind Europe, by developing 30GW of offshore generating capacity by 2030 and reducing emissions to 50% below the levels of 2005. All the signs are indicating a global shift to the way our world is powered and Lekela is at the forefront in Africa, where uptake has been positive but slower – with a report from GWEC Market Intelligence suggesting the continent is tapping just 0.01% of its wind energy potential. Outside of South Africa, countries are missing opportunities to tap into this major renewable resource but Lekela is trying to make a difference. In Egypt, the West Bakr wind farm is under construction and in Senegal, the Parc Eolien Taiba N’Diaye (PETN) project is fully operational. “In Senegal, we have a 158MW project which is now operational after being completed in three phases. The final project which is under construction is the West Bakr project in Egypt
LEKELA
// FACING AN UNKNOWN RISK LIKE COVID WAS A CHALLENGE FOR THE BUSINESS BUT I THINK WE ROSE TO IT VERY WELL // which is a 250MW project in the Gulf of Suez, a very windy area. It’s due to reach commercial operation in September/ October this year,” says Ford. “In Senegal, the grid system is growing very rapidly and adding in the capacity of the PETN allows them to service customers and brings an economic source of clean power.”
These two projects are encouraging, and act as examples of what is possible at an affordable price, for governments and private investors all over Africa. “Renewable energy in Africa is taking the main stage,” emphasises Ford. “It’s no longer a niche product and is the cheapest source of power. We are competing against gas or coal but wind and solar are becoming cheaper and cheaper. It’s not only a socially good thing, it’s an economic imperative to get these things off the ground. We are having very different conversations to what we had 15 years ago when renewables were expensive. We can go to governments and say this is the cheapest source of power on the system and will save you buying liquid fuels or gas, and that is a real benefit.” This message is vital for decision
makers to understand. Recently, a study from the University of Oxford found that there are around 2500 planned power plants across Africa but only 10% of the capacity that is created will come from wind or solar. “There is still a place for thermal projects but there is so much appetite from investors for renewable projects that countries can get some really good, competitive, low cost production into their systems. “It’s gaining momentum in South Africa and the government has set out a road map to see the industry regrow. There has been a clear view provided for industry participants which allows for people to focus on developing projects and put money into activity. It’s an exciting market, there is plenty of space for renewable in South Africa, and around Africa,” says Ford.
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INDUSTRY FOCUS: ENERGY
© Lekela
COMMUNITY POWER Lekela’s impact on the communities in which it builds has been extensive. From empowering youth, funding literacy programmes, assisting with healthcare rollout and investing in IT for schools through to assisting local businesses and non-profit organisations, the company is actively seeking opportunities to be involved in a sustainable and long-term way. Initial job creation is significant, with often more than 500 people involved in construction of a wind farm, but as the operational phase is reached long-term jobs are limited, usually around 15 to 20. “Because we are active with these projects for the long-term, a key success factor for us is the work we do with the local communities and in South Africa there is a well-defined programme around how you work with local communities and what sort of investments you can make,” details Ford. “In Senegal, we have extensive investment programmes with communities because we want to be a good neighbour and see those communities thrive. Our role is not just to supply electricity to a single
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community but to the country as a whole, so it’s important that when we invest in an area, the community benefits too so that they buy into the project. Our approach on that side has been to embed that process upfront and take those communities with us. Making partners of them is critical to the success of any project. “We’ve put a lot of money and effort into these projects, and we focus on three key areas - education, environment and enterprise development. We also invest in improvements in local healthcare and we responded strongly to the Covid-19 pandemic as we were worried about the resilience of healthcare in these communities.” In 2020, Lekela spent around $2 million on local communities and Ford confirms that next year will likely be more, suggesting that, with the project in Egypt coming online, the figures will probably reach $3 million. “That is a continued investment and we don’t just hand over some cash at the start of a project – we do it every year, so over 20 years there is a significant amount of money going into these communities,” he confirms.
CARBON NEUTRAL Proving its commitment to developing a cleaner, better system, Lekela was labelled as a carbon neutral company in accordance with the Carbon Neutral Protocol. The company’s wind farms help to avoid 1.7 million tonnes of CO2e being added to the atmosphere each year and Lekela has partnered with Natural Capital Partners through which a programme will be established to offset carbon emissions. “We constantly extol the virtues of clean, reliable and cheap energy for Africa in the form of wind power. It’s only right therefore that we behave the same way internally and act the way we want others to on climate change,” says Chris Antonopoulos. In the future, Lekela will be active in the industry beyond just wind farms. The company will attempt the solve a key problem associate with renewable power production – storage. How do you save excess energy produced during high output, ready for us in a time of high demand? Batteries are yet to follow turbines and become cheap and highly efficient. So Lekela is investigating.
LEKELA
// NO LONGER ARE THESE THINGS JUST ABOUT ENVIRONMENTAL WELL-BEING, THEY ARE NOW THE ECONOMIC CHOICE // In September 2020, the US Trade and Development Agency (USTDA) awarded Lekela a grant in partnership with the National Electricity Company of Senegal (Senelec) for a feasibility study into Senegal’s first grid-scale battery electric storage system. Located at the PETN, the 10-month project will, if successful, pave the way for future development of renewable resources in Senegal and further afield. “This is the logical next step to
utilise wind and solar and bring clean, cheap power to Senegal’s citizens… It’s fantastic to be involved in furthering this progress through this project and we are grateful to Senelec for their support and collaboration in making this project happen,” says Antonopoulos. With this innovative type of work being done in, and for, the communities that Lekela now calls home, alongside the obvious financial and environmental benefits that go with wind energy, Lekela’s vision seems to be coming true. “It has been a very busy five years. Quickly adding project after project has been quite exciting. We oversee construction activity and we hold the project through operations where the team is responsible for the performance of the plants through the life. “The industry trends are that turbines, panels and batteries are getting cheaper all the time. We are developing the battery project in Senegal and the economics are
extremely favourable right now. A few years ago, batteries were an expensive product but they are getting cheaper and cheaper. No longer are these things just about environmental wellbeing, they are now the economic choice. Wind turbines are getting bigger and bigger and that means sites that were not suitable are becoming economically viable as you can get large turbines which can capture so much energy, even in low wind conditions,” smiles Ford. With Lekela operating in Africa, new things now seem possible; clean energy at an affordable rate has been proven; long-term community upliftment has been achieved. This is an example to follow and a drive that must be encouraged.
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“I joined Lekela in 2016 and prior to that I was working in the African market where I spent 10 years living in Tanzania running a gas power project. I looked after some of the first wind and solar power projects in South Africa. I was also involved in projects in Ivory Coast and Cameroon. “I switched into the renewables industry but wanted to stay in Africa and enjoy the continent. I Joined Lekela because it’s focussed on Africa and renewables – that’s all we do. One of the main issues of the pandemic for me has been not being able to get out there – I’m travelling twice a month normally, checking out the assets in country, but with the restrictions in place, that has been dramatically reduced unfortunately.”
CHRIS FORD, LEKELA CHIEF OPERATING OFFICER www.enterprise-africa.net / 7
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May 2021
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MAY 2021