SOLAR FARM PROPOSAL. Urban Solar Farms with Integrated Power Storage For Mines, Mega Projects and Local Municipalities

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1 SOLAR FARM PROPOSAL 2018 Urban Solar Farms with Integrated Power Storage For Mines, Mega Projects and Local Municipalities Because we are now running out of gas and oil, we must prepare quickly for a third change, to strict conservation and to the use of coal and permanent renewable energy sources, like solar power. Jimmy Carter, TV speech, 18 April 1977

2 Proposal in Brief We propose creation of Urban Solar Farms as energy power nodes in conjunction with Mines, Mega Projects and Municipalities. Solar Farms will: i) Unlock the growth in the area. ii) Enable developers to proceed and expand. iii) Speed up the economic expansion of the Municipality. iv) Get new customers on the grid. v) Create additional income streams for Municipality previously not available. Please note: No funds or money is needed from the end user be it a Mine, Mega Project Developer or a Municipality. We will provide the: 1. Funds & Finance in excess of R300 Mill, which would include 10MW Urban Solar Farm with battery storage. 2. Professional reports and studies. 3. Licensing. 4. Know how. 5. Equipment. 6. Installation. 7. Maintenance 8. Job creation. 9. Skills transfer. 10. Management thereafter. Municipality provides: 1. Assistance with identifying an Off-taker(s) of the power within the grid. 2. Land for the Solar Farm.

3 Why will solar develop in South Africa? Background SA has some of the highest irradiance levels in the world. SA s only power utility, Eskom have increased tariffs by almost 300% over the past 8 years, this trend is set to continue and is expected to double again within the next 5 years In 2016, Solar power generation PV has reached cost parity with utility electricity tariffs. The uncertainty on power supply has resulted in a loss of business confidence and increased business operating costs. There is a developed grid network infrastructure. Grid planning takes into account decentralization and intermittent nature of current supply Municipalities around the country are having green drives. For example refer to see City of Joburg: Listed South African corporates have made a commitment to green energy in their sustainability reports. IRP 2010 requires 90GW by 2030 and IRP GW SSEG (rooftop) by There is strong demand in Private Sector to reduce dependence on grid-tied energy. The market requires a long term competitively priced off balance sheet funding structure South Africa has all the ingredients for rapid solar expansion over the next 5 10 years. Figure 1: TBC

4 Background (2) Solar Farms Solar Farms, Urban Solar Farm, Solar Plants or also known as Solar Parks are electrical power generation plant, based on the solar energy. Most often, Photovoltaics technology is used Urban Solar Farm is power generation within the Urban or Municipal boundaries. Why Solar Farm: Advantages of Solar Farms: - When using energy storage there s no down time and lis ow maintenance. - No pollution. - Municipalities dirty energy with clean energy. - Renewable resource. - Predictable pricing - users will know exactly what they pay in 10 or 15 years time per KWh - Economies of scale. - Cleaner and healthier environment. - Tariffs are set for the next 20 years - Due to the power challenges in South Africa, Solar Farms become the commercial and industrial hubs. Why there are not more Solar Farms? - Hi cost and Capital Expenditure. - Difficult to store the energy. - Low output. - Expensive to set up & produce. - Weather conditions & day/night influence the production. - Cumbersome and long legal process to obtain the license. - Often not able to sell excess power back into the grid. Figure 2: Eskom Average Tariff vs Inflation

5 Future Outlook: South Africa is blessed with an immense amount of sunny days. The local climate is among the best countries in the world for PV generation, and South Africa s Renewable Energy solar PV market has all the ingredients for rapid expansion.

6 Proposal Our business model focuses on Municipalities anywhere in South Africa s. It can be further applied to private business sector, large investment grade commercial and industrial power user. Urban Solar Farms of 10MW size provide ample power to end users whether large power users or a suburb. Municipalities benefit with out system greatly as no money or funding is required whatsoever from the Municipality. We save the monies to Municipalities in number of ways and at the same time create new income streams through Wheeling tariffs. Benefits of the Solar Farms to Municipalities: - For 10MW Solar Farm - less then 20Ha of land is needed - No permanent structures are constructed. - One can use dolomite or other less desirable land. - Municipality provides the land we put up the solar farms and electrical infrastructure - Creating Solar Farms results in area upgrade and usually rapid area growth because of available power. As such, Solar Farms unlock growth in areas with additional rates & taxes where property developments were constrained by electricity supply. - Ground mount Urban Solar Farms (USF) with integrated storage deployed in high power demand areas of the municipal network - We provide power to commercial & industrial end users by wheeling power through distribution networks owned by municipality s distribution company or, - In some instances, if the solar farm is close enough to the end user - we could provide the electrical power directly to the end user; - Cost effective green power to the private market to Blue chip company off-takers within Municipal boundary; - This business model works well for Municipality as it derives more revenue through through Solar Farms then selling City Power s and ESKOM s power.

7 Likely Solar Farm Customers: Residential Electricity tariffs range R1.20/kWh to R2/kWh Large managing agents or body corporates could potentially be customers Corporates Electricity tariffs range R1/kWh to R1.50/kWh Banks, JSE top 50, Hospitals etc. Retail Electricity tariffs range R0.90/kWh to R1.20/kWh Shopping Centers, large chain store groups Property Developers Electricity tariffs range R0.90/kWh to R1.20/kWh Large developers like Redefine, Growthpoint Industrial Electricity tariffs range R0.65/kWh to R1.10/kWh Large energy consumers, steel industry, manufacturing etc. Project location

8 SOLAR FARM In closing: The Municipality provides: - Suitable land on an outright ownership or on a long term lease basis to the SPV We provide: - If needed: rezoning and/or professional studies; - Investment & Funding. - Know how; - Expertise; - Bankable business model; - Feasibility; - Secure the end user and appropriate off take - a blue-chip or large power user as an off-take; - Finance for project successful conclusion. By Municipalities making the land available whether as an outright ownership or on a long term lease basis together we could: - Unlock area and regions growth; - Enable and unlock job creation; - Support new developments; - Create and unlock new revenue base for the Municipality. Crowdfunding opens the door for funding without banks and offers opportunities to individuals who previously were not able to participate in these lucrative investments due to the high level of investment needed. These in turn shall help create investment mindset with far reaching effects.

9 Solar Farm Municipal savings with Urban Solar Farm of 10MW Simplified Calcs - USF VS Utility USF = Urban Solar Farm Year Megaflex Megaflex USF increase USF increase % R/KWh % R/KWh USF KWh/year Munic Saving Wheeling tarif 2018/04/01 0 R 0, /07/01 0 7,32% R 0, /07/ % R 0,97 5% R 0, R ,00 R 0,20 R , /07/ % R 1,07 5% R 1, R ,60 R 0,20 R , /07/ % R 1,17 5% R 1, R ,55 R 0,20 R , /07/01 4 8% R 1,25 5% R 1, R ,33 R 0,20 R , /07/01 5 8% R 1,33 5% R 1, R ,42 R 0,20 R , /07/01 6 8% R 1,41 5% R 1, R ,33 R 0,20 R , /07/01 7 8% R 1,49 5% R 1, R ,51 R 0,20 R , /07/01 8 8% R 1,57 5% R 1, R ,47 R 0,20 R , /07/01 9 8% R 1,65 5% R 1, R ,69 R 0,20 R , /07/ % R 1,73 5% R 1, R ,71 R 0,20 R , /07/ % R 1,81 5% R 1, R ,10 R 0,20 R , /07/ % R 1,89 5% R 1, R ,49 R 0,20 R , /07/ % R 1,97 5% R 1, R ,58 R 0,20 R , /07/ % R 2,05 5% R 1, R ,15 R 0,20 R , /07/ % R 2,13 5% R 1, R ,07 R 0,20 R , /07/ % R 2,21 5% R 1, R ,31 R 0,20 R , /07/ % R 2,29 5% R 1, R ,95 R 0,20 R , /07/ % R 2,37 5% R 1, R ,21 R 0,20 R , /07/ % R 2,45 5% R 1, R ,44 R 0,20 R , /07/ % R 2,53 5% R 1, R ,16 R 0,20 R ,76 Total Nominal R ,06 R ,07 Total Real 5% R ,38 Not considered in calc: 1. NMD cost as a result of USF 10MWP with 60MWh storage 2. Saving on 5% lossses 3. Battery KWh tariff will be charged seperately

10 Thank you for your time in reading this brief. As I am sure you understand, there is more to the opportunity than can be proposed in this brief.. We would love the opportunity to the discuss the above further. Your Sincerely, Slaven Gajović Vogelstruisfontein Ceo, Maximum Group slaven@maximumgroup.co.za Cell: Leading the industry through Conscious Property Alchemy. Matholesville Samrand