SolarQuarter - Africa Sep-Oct Issue 2022

JONATHAN

JONATHAN OBI

CEO, JFO ENERGY

SOLUTIONS

JFO Energy Solutions is a renewable energy company that is into the importation, distribution, and installation of tier 1 solar energy systems within Nigeria and across Africa.

KEY HIGHLIGHTS

We have built a niche in the Nigerian solar market and will keep progressing

Our products range from lithium-ion batteries to inverters, panels, and solar air conditioners

All our batteries are lithium Phosphateion; the best as far as safety and longevity are concerned

Please tell

We started 5 years ago in cape town South Africa and expanded into Nigeria early this year. So far, it’s been good We have built a niche in the Nigerian solar market and will keep progressing

For our batteries, we have partnered with the best battery-producing company in China- BSL BATTERY in other to achieve this top-notch quality All our batteries are lithium Phosphate - ion; the best as far as safety and longevity are concerned.

How has the year 2022 been for your company? Any key learnings?

2022 has been a good year for the company We have deployed 100s of solutions across homes and offices in Nigeria and we are looking forward to closing more deals before the end of the year The market is competitive but having the best solution will always separate you from the crowd

With the spike in prices of fuel and the many disadvantages to mention a few: inflammable nature, pollution, greenhouse gas emission, and poor maintenance of its sources, renewable energy will be in high demand, and we are taking steps to always meet these demands

The advantage of solar energy outweighs the famous high cost most people term it Yes! It’s a pricey investment but in the long run, it saves money i e , reduced electricity bill, is friendly to the environment, and low maintenance; solar components have lengthy warranties from 10 years up to 25 years so you can sleep easy knowing that your investment is secured for years to come.

We currently have our head office in Abuja at 25 Tennessee crescent, Maitama, the Lagos office is almost in shape, and we are looking at expanding to Port Har-court This office will service the eastern region Across Nigeria, we al d h li t i Ch d d ill b e

JFO Energy Solutions is a renewable energy company that is into the importation, distribution, and installation of tier 1 solar energy systems within Nigeria and across Africa Our products range from lithium-ion batteries to inverters, panels, and solar air conditioners

We deal with the best brands that have been tested and trusted within and beyond Brands such as BSL Battery, Deye, and Victron

All our batteries are lithium Phosphate - ion; the best as far as safety and longevity are concerned."

What is your outlook on the African solar market for the coming year?

What are some of your future growth and expansion plans?

We deal with the best brands that have been tested and trusted within and beyond."

LORENZO L. COLACICCHI

CEO ERGON SOLAIR & CO-FOUNDER/ ACTING PRESIDENT OF EAGF.DE

KEY HIGHLIGHTS

Governments need to formulate much clear process guidelines, long-term policies, and tariffs that guarantee returns fair for all the stakeholders, and these guidelines should be respected, and maintained, for the duration of development

The idea that Solar Tariffs should be driven to the ground, and Fossil Fuel Tariffs are always acceptable, should stop

With the support of Euro-African associates, partner organizations, and with strategic inputs from African Governments, we structured, proposed and obtained endorsement from three African Governments for 50 green EurAfrican Green & Grassroots new Deal projects for joint European African development

Any key developments in 2022?

On our part, the key developments have been essentially two, both very important for us

Kisumu Solar One, our 48MWp Kenyan flagship project controlled by Ergon Solair Africa Limited, that, due both to the pandemic and domestic Kenyan energy issues, had been on standstill since early 2020, picked up vigor and is now heading energetically in direction of its goal of COD in 2024 It will very likely be expanded to include also a 16 MWh storage system and, adjacent to it, a Sustainable Development R&D center

I think the market needs to mature to a higher level, exit the tentative pilot phase and enter a true solar boom To reach this, the most highly required improvements are essentially:

I would say 2022 has been a year that reenergized the sector, recreating momentum that had been somewhat subdued by the pandemic, and a stimulus to transition to new visions of green deal cooperation-based business models Naturally, it is difficult to speak of Africa as a whole, each country has its history, individual needs, and renewable energy resources, as well its own green energy learning curve and challenges.

Jointly, with the support of Euro-African associates, partner organizations, and with strategic inputs from African Governments, we structured, proposed and obtained endorsement from three African Governments (Kenya, Uganda and Malawi) 50 green EurAfrican Green & Grassroots new Deal projects for joint European African development (listed on the www.eagf.de website). Collectively they have an estimated Capex of over €700 Million, soon expected to reach €1.5 Billion These Projects all follow a principle I have been working on for many years, solar energy not only as a pure energy source, but used also as a means to stimulate green transition in a wider sense, empowering sustainable development, but also inclusiveness, social welfare and gender equal opportunity, in fact, many are not pure solar energy projects, rather they all include solar, such as agro-solar, solar water, solar-powered health clinics, solar powered e-ambulances, solar powered Student Housing, and much more The development of these projects will be managed by EurAfrica Green Future (www.eagf.de) in partnership with the multiple stakeholders involved EAGF will be headquartered in Cologne (Germany), it is currently being structured, and will be formally operating from the second half of January

Developers and investors need clear pathways from day one of development to COD A developer must be able to estimate its risk and evaluate it against the potential gains, that is only possible if the risks and gains can be credibly assessed and assumed, making it difficult for developers to assess risks results in the latter assuming them at the highest levels, which then translates into excessively high requirements of returns, which then drive tariffs more upwards than truly necessary, to compensate the assumed risks

Governments need to formulate much clear process guidelines, long-term policies, and tariffs that guarantee returns fair for all the stakeholders, and these guidelines should be respected, and maintained, for the duration of development

Much too often, still today, and not only in Africa, Governments treat solar energy as a Luxury and Fossil Fuels as a necessity The reality is quite the opposite Fossil fuels are not affordable anymore, neither economically nor environmentally The idea that Solar Tariffs should be driven to the ground, and Fossil Fuel Tariffs are always acceptable, should stop One MWh of Solar is worth much more than one MWh of Fossil Fuel generation because Solar carries very few external costs, whereas Fossil Fuels have very high external costs (environmental and wars), we are at a point now where this should be common knowledge and be reflected much more clearly in energy cost planning

I see in Africa very good technical skills, I have met many very qualified engineers, many of which young women, and I have confidence that their energy will drive the African markets quickly to the highest levels.

How has the year 2022 been for your organization overall?

What do you have to say about the present situation of the African solar market? What improvement can be done and how?

The African green energy markets, like all global solar markets, have their solar energy learning curve, which entails both success stories as well as failures too. No solar market in the world has ever been exempted from this rule, all have their baggage Where I see problems still in Africa is in the maturity of the markets which is evidenced by there not being often a clear understanding of how solar integrates into commercial & industrial energy markets I see many too many commercial systems developed without a clear understanding on the part of the stakeholders of what are reasonable expectations This often translates into many commercial systems sold at terms non-viable either for the customer or for the system integrator They must work in alliance, but often it's not so In the long run, this slows the growth of the solar sector. European solar markets went through this same phase some 15 years ago, Africa is there now, and needs to overcome this, just like all other solar markets did

I see in Africa very good technical skills, I have met many very qualified engineers many of which young women, and I have confidence that their energy will drive the African markets quickly to the highest levels

Considering your vast experience and long journey in the RE field, how do you see your journey becoming stronger in the next few years?

I have decided to focus almost entirely on what I define as “Green Deal Cooperation”, “let's do it together” is my policy Currently, I am focused on EU Africa green deal cooperation This represents both an enormous opportunity for green business development and humanly rewarding activities, which is also important These opportunities offer the chance to do good business, doing good to the planet, and to its inhabitants (humans included), a double big win Green Energy cooperation and its spin-off activities can offer opportunities to cement greater North-South synergies which in turn also creates a more environmentally, and humanly, friendly planet, as well as offering solutions needed, by both Africa and Europe

What is your outlook on the African solar market for 2023?

From what I have seen, the prospect is vertical growth, if African markets can overcome the phase they have been in, and jump to full speed Solar Markets I have confidence they will, solar is cool tech, driven by the creative energy of youth, and Africa is very rich in youth!

What is the novelty that African solar markets need today? Own their solutions, and Community Solar, commercial and utility-scale, is the answer

Green Energy cooperation and its spin-off activities can offer opportunities to cement greater North-South synergies which in turn also creates a more environmentally, and humanly, friendly planet, as well as offering solutions needed, by both Africa and Europe."

JA SOLAR STRENGTHENS THE POWER GENERATION PERFORMANCE OF PV MODULES WITH LATEST TECHNOLOGY RESEARCH AND INNOVATION.

JA Solar announced that it will supply modules for IGNIE 2021-2046, the first renewable hybrid power plant and the first photovoltaic (PV) and waste-to-energy plant, in the IGNIE special economic zone in the Republic of Congo The project includes a PV energy storage plant of more than 55 MWp and a waste-to-energy plant with a daily waste treatment capacity of 500 tonnes at the start The PV power plant will be installed with JA Solar DeepBlue 3 0 modules Once completed, the project designed by TINDA CASH CONGO S.A Producer IPP will play an important role in strengthening the energy production capacities of the national electricity company E2C and will contribute to the economic, social and environmental sustainability of the SEZ of IGNIE

A Th Nicephore FYLLA Saint-eudes, the Minister of Industrial Development and Promotion of the Private Sector of Congo attended and witnessed the signing ceremony He expressed congratulations and encouragement to the two parties who signed the agreement, hoping the project will be completed as soon as possible and play a positive role in promoting low-carbon green development in the region

DeepBlue 3 0, advanced PV modules manufactured by JA Solar, were launched by the company in May 2020 The products' cumulative shipments worldwide from 2020 until June 2022 totaled 24 GW In order to meet changing market demands, JA Solar continuously strives to improve the power generation performance of PV modules through strengthening its own technology research and innovation In May 2022, JA Solar launched its first product in the n-type PV module market DeepBlue 4.0 X. Carrying not only the performance advantages of DeepBlue 3 0, but DeepBlue 4 0 X also exhibits higher efficiency, higher power, stronger power generation capability and excellent reliability Both the DeepBlue 3 0 and DeepBlue 4 0 X truly exemplify JA Solar's product design philosophy of being "tailored to enhance customer value"

DeepBlue 3.0, advanced PV modules manufactured by JA Solar, were launched by the company in May 2020. The products' cumulative shipments worldwide from 2020 until June 2022 totaled 24 GW."

AUTHOR:

CHANDA NXUMALO Director, Harmattan Renewables

Fominated by generation from the state e power cuts are a regular occurrence, the South African government has recognized the need to diversify its approach They have released new regulations to enable and accelerate private

investment in generation capacity, including the removal of the licensing threshold for new-generation projects

Corporate organizations are increasingly leveraging these regulations to secure direct offtake with independent power producers or even become IPPs themselves in a bid to reduce reliance on utility-generated power.

One of the key changes is the declaration of Embedded generation projects as Strategic Infrastructure Projects (SIPs), shortening the timeframes for environmental authorizations, water use licenses, and other permitting requirements. A dedicated resource has been created within Eskom to process grid connection applications quickly and the NERSA registration process simplified

Such a structure could also improve the bankability of projects by spreading the credit risk between different offtakers

Similar is happening on the IPP side: Smaller-scale PPA projects that may not be competitive for government programs are increasingly being grouped within a fund or other investment structure to create a portfolio attractive to lenders

BANKABILITY:

With the move away from a government-backed take-or-pay PPA, the focus shifts from qualification to bankability With limited local precedents for corporates to take a steer from it is vital that the following technical, legal and financial considerations are taken into account to ensure that risks are understood and allocated appropriately

From a technical perspective, it is important to understand the difference between onsite power and wheeled power – unlike the former, the latter has no impact on the security of supply The bankability risk then looks at supply risk ie technology choice and the ability of the IPP to deliver the project on time; forecasting and matching generation to (time of use) demand profile ie if you have 24/7 demand, a battery would be needed to supplement solar Solar projects have dominated the market to date, but as demand following becomes increasingly important we are seeing interest in wind and hybrid projects

LEGAL:

From a legal perspective, the lack of local precedent has slowed progress to close, however, the REIPPPP lessons learned are useful and transferable provided they are tailored to the specific use case rather than copied wholesale Critical risks around Force Majeure, Network Events, and the need for “take or pay" off-take are challenging without Eskom as a party to the PPA

The changes in legislation lend themselves to a corporate sector that is increasingly aware of Corporate Social Responsibility (CSR) and Environmental and Social corporate Governance (ESG) Further to the reliability benefits, corporate PPAs bring long-term price predictability and the ability to hedge against future price increases from the grid

Historically, corporate PPAs have been for the major energy users but this is likely to change with the advent of energy trading and the potential for buyer consortia (seen elsewhere but yet to hit our shores). This could transform the market for corporate PPAs by opening it to small and who cannot commit to the entire output of say se who wish for a shorter contract

Financially, there is no government guarantee for off-take resulting in a heavy reliance on the off-taker’s Balance Sheet to support PPA obligations The “Take or Pay” aspect mentioned above can be a difficult discussion as it is a requirement from Lenders to finance a project, while it remains a challenge for off-takers who are used to not paying Eskom for power that isn’t used.

The potential for the private sector to close the power gap and address the energy crisis is significant Delivering and closing private PPAs will require a tightly integrated team who can navigate the regulatory, financial, and technical vagaries of this new approach to energy in SA and ensure that risk is allocated appropriately

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Power Producers Procurement (REIPPP) program and Procurement (REIPPP) program and the Risk Mitigation IPP program - the Risk Mitigation IPP programSouth Africa South Africa

The REIPPP launched Bid Window six in April 2022 This goal is to bring an additional 2,600 MW into our energy mix Meanwhile, the National Energy Regulator of South Africa, NERSA, has approved over 15 IPPs in May 2022 and June 2022

Draft Amendments To The Electricity Regulation, Act 4 of 2006 (ERA)South Africa

On September 2, 2022, the Minister of Mineral Resources and Energy released draft amendments to Schedule 2 of the Electricity Regulation (Act 4 of 2006, ERA). The principal change proposed is to remove the 100 MW licensing threshold. This exemption exempts generation facilities, including those with energy storage, of unrestricted power with a point for connection on the distribution or transmission power system, and thus, the need to obtain licenses

Shortly after the licensing threshold was raised from 1 MW to 100MW on August 12, 2021, the proposed amendment to remove it was considered This is the South African government's attempt at encouraging further growth and investment within the energy sector, as well as promoting the further generation and reliable electricity supplies This will help South Africa to address its energy crisis and provide much-needed relief for the economy after years of load-shedding.

Botswana’s Key Policy Decision

The country plans to expand its power generation portfolio with natural gas and renewable energy through IPP projects. The 2007 Amendment of the Electricity Supply Act permits power generation in Botswana to be exported by an IPP. In September 2017, the Botswana Energy Regulatory Authority was established to create a more enabling atmosphere. In 2020, Energy Feed In Tariffs (EFT) guidelines was published by the Ministry of Mineral Resources, Green Technology, and Energy Security.

The Integrated Resource Plan (IRP) was launched by the ministry in December 2020 It is considered to be the key driver behind local energy demand and the export of excess energy The IRP is a plan that outlines the most pment plan for the next 20 years

are the power projects that will be implemented during the first seven years of the IRP

100 MW sun photovoltaic; total 35 MW grid-tied sun photovoltaic to 2022 (currently under tender) These projects will all be implemented by IPPs

Currently under procurement; 10 - 100 MW coalbased methane

CSP to be 200 MW concentrated sun plants (by 2026) (procurement to begin in 2021).

300 MW coal by 2020 (currently under contract).

50 MW wind in the year 2027. Procurement is to start in 2024 once wind resource mapping is completed.

100 MW solar photovoltaic in the year 2027 (procurement to commence in 2025).

South Africa announced its Just Energy Transition Investor Plan (JET IP) at COP 27, November 2022. It also announced a five-year investment program for the USD 8.5 billion financing package. The announcement was made as part of the country’s Just Energy Transition Partnership with France and Germany at COP 26. The cabinet-approved National Just Transition Framework is aligned with the JET IP. The South African government stated that the plan detailed the investments necessary to fulfill the country's climate commitments. It also promoted sustainable development and ensured a just transition for the affected workers.

Key investments under the JET IP will include:

New Energy Vehicles-Decarbonizing the automobile sector and supporting supply chain transformation towards green sustainable production Repowering and repurposing clean technologies with electricity, transmitter grid strengthening and extension, and renewable power Gaseous Hydrogen - The essential planning and feasibility of gaseous hydrogen (GH2), including port investment in order to increase exports and improve employment and GDP.

These

The latest Just Energy Transition Plan (JETP) - South Africa

Draft Amendments To The Draft Amendments To The Electricity Regulation, Electricity Regulation, Act 4 of 2006 (ERA) - Act 4 of 2006 (ERA)South Africa South Africa

On September 2, 2022, the Minister of Mineral Resources and Energy released draft amendments to Schedule 2 of the Electricity Regulation (Act 4 of 2006, ERA) The principal change proposed is to remove the 100 MW licensing threshold This exemption exempts generation facilities, including those with energy storage, of unrestricted power with a point for connection on the distribution or transmission power system, and thus, the need to obtain licenses

Shortly after the licensing threshold was raised from 1 MW to 100MW on August 12, 2021, the proposed amendment to remove it was considered. This is the South African government's attempt at encouraging further growth and investment within the energy sector, as well as promoting the further generation and reliable electricity supplies.

This will help South Africa to address its energy crisis and provide much-needed relief for the economy after years of load shedding The government is considering limiting solar installations to 1000 MW and wind to 1,600MW per year under the IRP This cap could also be removed by the government, it is expected

Policy Challenges

While embedded generation projects won't be required to have a license, they will need to register with NERSA. NERSA should make it as simple and quick as possible. The generation facility must also comply with the grid codes. If the energy is to go on wheels, it will have to get connection approvals Both can present problems from a capacity standpoint

Over the last three weeks of June-July 2022, South Africa were left without power for as long as eight hours per day, which has had a devastating effect on the already fragile economy. The crisis reached new heights with Stage 6 rolling blackouts, which were implemented after 18,000MW of generation capacity had been lost.

South Africa's Government attempted to solve the electricity crisis by reviving the country's renewable energy independent power producer procurement program (REIPPP), increasing the licensing threshold for embedded generation projects from 1MW up to 100MW, as well as allowing municipalities to purchase power on their own. However, the REIPPP program has experienced significant delays due to uncertainty over, amongst other things.

Constructing Eskom’s first solar and battery storage projects at Komati, Majuba, and Lethabo power stations, which will result in a further 500MW being added to the system.

Botha huis, located in Mossel Bay, South Africa has a capacity of 13.2 kWp (kW + kWh) and is equipped with a battery energy storage system.

SunElex Energy Ltd proposed the Matjhabeng 400MW Solar Photovoltaic Plant with an 80 MW (320MWh) battery storage system It is located north and south of Odendaalsrus, Free State Province

The two (2) phases of the project are Phase 1: A 200MWsolar photovoltaic system with a 40 MW(160 MWh) battery energy storage system, which is located on a site south of Odendaalsrus; Phase 2: 200 MW of solar photovoltaic capacity with a 40 MW (160 MWh) battery energy storage system (on the site north of Odendaalsrus, referred to as the “Phase 2 Site” in the following).

Purchase surplus capacity from independent power producers.

Purchasing additional energy from private generators like mines, paper mills, and shopping centers, or any other private entity with excess power.

Through the Southern African Power Pool arrangement, import power from South Africa's neighboring countries (Botswana & Zambia).

Climate funding through the Just Energy Transition Partnership can be used to invest and repurpose old power stations

The South African Police Service established a task force to assist Eskom in fighting corruption and crime

Matjhabeng Solar PV with Battery Energy Storage Systems Project