PV AND OTHER RENEWABLES THE FINANCIAL ADVANTAGE

Transcription

1 PV AND OTHER RENEWABLES THE FINANCIAL ADVANTAGE

2 Different Types of Renewables Most popular types: Solar, Wind & Biogas. Solar - uses the sun to generate electricity. Advantages: Sun is free. Passive source of generation. Sustainable. Reduces electricity costs. Very low maintenance costs, if any. Disadvantages: Solar power is confined to daylight hours. Requires space. Energy storage is expensive. Requires a high capital investment.

3 Wind generation - uses wind to generate electricity. Advantages: Potential of wind power is enormous. Unlimited resource. Space efficient. Low capital investment. Low operational costs. Disadvantages: Noise. Wind levels fluctuate. High maintenance. Environmental threat to wildlife, for instance birds and bats.

4 Biofuel / Biogas -the use of bacterial decomposition of organic waste to generate electricity. Advantages: Energy crops can be grown in South Africa (Biofuel). Cost effective compared to oil and coal. Optimising of by-products have a positive influence on the bottom-line. Carbon neutral, since carbon released during burning is equal to carbon absorbed from atmosphere during growth. Disadvantages: Space is needed to grow crops. Impact on landscape. Expensive capital layout. Small changes in chemical composition in waste (manure) can have a major impact on generation.

5 Other Types Of Renewables: Hydro -uses the flow of water to generate electricity. Wave and tidal -makes use of wave energy to generate electricity. Landfill gas -uses the gas generated by landfills to generate electricity.

6 kwh Average daily production kwh kwh

7 Case Study: Four private renewable energy generators that make use of Eskom's programs, that are currently in operation. 4.5 mwpbiogas plant -wheeling power from generator point to manufacturing plant using Eskom, as well as municipal network. 990 kwpsolar plant making use of Eskom's banking program. 725 kwpsolar plant making use of Eskom's banking program. 200 kwpsolar roof structure making use of net metering in municipal area. 1.1 mwpsolar Car Port structure currently in construction will make use of net metering in municipal area.

8 Facts of the Case Study used in the Financial Modelling: 725 kwp Supplementary Solar system consisting of: 2788 x 260 W solar panels, 29 x 25 kw inverters, Galvanised field structure, 1 x 420/22000/1000kVA mini substation, 22 KV point of connection to the Eskom network, Average daily production 3764 kwh, average monthly production 114,525 kwh, average yearly production 1,314,580 kwh, Projected lifespan 30 years, with linear performance guarantee of 25 years, Plant produces 35.4% of yearly consumption including Eskom banking program, Estimated turn-key costs 15 million Rand.

9 725 kwp Solar System Banking Program Eskom

10 Current Eskom And Municipal Energy Eskom: Renewable Programs: Net metering -Uses network to store energy generated from renewable source not used during time of generation must be used in the same month. Wheeling-Uses network to move energy from point of generation two points of use. Banking-Uses network to store energy generated from renewable source not used during time of generation - 12 months.

11 Municipalities: Net Metering: off setting power generated from renewable source against the power used during the month resulting in a net consumer. Current municipalities allowing net metering: City Power Johannesburg. Cape Town Municipality. Nelson Mandela Municipality. Durban Municipality (ethekwini). Certain smaller municipalities.

12 200 kwpsolar System Net Metering Ellisras Municipality

13 Financial And Tax Advantages of Renewable Energy: Financial and tax advantages based on the 725 kwp case study: Assumptions made: Inflation rate of 6% per annum, Energy tariff increases of 9.4% for there-after 10% per annum for the lifespan of the plant, Loan period seven years with monthly instalments and an interest rate of 10.5% per annum.

14 Financial Advantages: Internal rate of return over the period of 30 years = 31.94%. Net present value based on an inflation rate of 6% per annum = million Rand. Return on investment 81 months. (Including deposit paid, rebate from commercial banks and all relevant tax advantages.) Current Average: Energy cost R0.899 per kwh vsr per kwh. (Capital recovered over lifespan of plant.) Project finance period -7 years with monthly instalments. Potential rebates from some commercial banks: 7% of amount financed. Property Enhancer.

15 Tax Advantages: Normal tax deductions for expenses such as interest rate, professional fees and installation costs if not capitalised, applies. Section 12B deduction: 100% in the first year of operation (Wind; Solar; Hydro & Biogas.) Section 12L: Mainly applicable to Landfill Gasrest excluded.

16 Thank You. Flip Opperman PV Solution Services (Pty) Ltd P O box 102; Montana Park; Pretoria pvsolutions@iburst.co.za