Due diligence checklist: how to identify the dominant …...Due diligence checklist: how to identify the dominant elements to pre-qualify your site for its solar potential Nic van

Due diligence checklist: how to identify the

dominant elements to pre-qualify your site

for its solar potential

Nic van der Westhuizen +27 82 8833 683

Project Manager [email protected]

Tritec Energy

South Africa

CONTENTS

Due diligence checklist: Solar Potential

Nic van der Westhuizen | Tritec South Africa

1. Dominating elements for solar qualification

2. Business case - Residential / small commercial

– 1 phase vs 3 phase – the effects with no export setup

3. LCOE energy evaluations – Commercial property ( If time allows)

1. Client needs

2. Irradiation

3. Roof direction and inclination

4. Tracker or fixed tilt

5. Major loss factors: Temp and soiling factor

6. Other factors

1. DOMINATING ELEMENTS FORSOLAR QUALIFICATION



1. Client needs




1. Client needs

– What is the requirement?




1. Client needs


• Financial benefits– South Africa - Grid tied

– Africa - Hybrid and Off grid




1. Client needs




• Necessity for energy




1. Client needs




• Necessity for energy– Client has money - Put in proper solution




1. Client needs




• Necessity for energy– Client has money - Put in proper solution

– Client does not have money Help the client to make more money




2. Irradiance

• Different components of irradiation







2. Irradiance

• Different components of irradiation




2. Irradiance

• Why is irradiation more in Upington vs Durban




2. Irradiance





2. Irradiance






• Optimum inclination is effected by your latitude




Cape Town Nairobi, Kenya





4. Tracker or fixed tilt?




4. Tracker or fixed tilt ? – real case scenario based in Limpopo




4. Tracker or fixed tilt – In this case tracker givesbest ROI due to TOU tariff




ROI differenceFixed tilt - 14%

East West - 16%tracker

5. Major loss factors: Temp and soiling factor




6. Other factors

• Client load profile

• Shading and multiple roofs




• Residential / Embassy

2. BUSINESS CASE - RESIDENTIAL / SMALL COMMERCIAL



• Residential / Embassy




• Solar PV layout

– 24kWp




• Utility: Citypower

• Tariff: Block.




• The effect of unbalanced phases
















Generator minimum load setting - 16kW –Solar PV throttled





Losses due to throttling of inverter caused mostly by imbalanced loads

• Billing – City of Joburg – current tariff

(NO PV SYSTEM)





(NO EXPORT AS CURRENT SITUATION)





(EXPORTING ALLOWED)




• Billing – City of Joburg – changing to a TOU tariff




• Billing – City of Joburg – TOU tariff




24.8 kWp

188 496 kWh

46 270 kWh

45 869 kWh

401 kWh

142 626 kWh

204 958 R

51 470 R

172 R

% Energy PV generation used vs consumption 24% %

1% %

1 849.6 kWh/kWp

112.21 c/kWh

% Energy PV generation not used on site (lost or exported)

kWh/kWp - based on energy PV generation used

Energy savings tariff - based on PV generation used

Energy consumption (Nett used from grid)

Total energy cost - without PV - year 1

Total energy savings - year 1

Total energy savings - PV generation exported - fixed tariff

Energy consumption (before PV system)

Energy PV generation

Energy PV generation used

Energy PV generation exported

Annual results of year 1 - 24.8 kW plant

PV system size installed

16.2 kWh/kWp

42.79 c/kWhEnergy exported tariff

Annual exported or unused PV energy

Energy PV generation exported

Average cost of electricity / annum (R/kWh) 1.09R

Total cost per annum after savings 153 316.82R

Average monthly bill (only energy cost) 12 776.40R

R 73 055.87 saving – changing to TOU tariffR 51 641.60 saving from PV system

• Business case of scenarios




Nic van der WesthuizenProject ManagerTritec EnergySouth Africa

T : +27 82 8833 683E : [email protected]



3. LCOE ENERGY EVALUATIONS –COMMERCIAL PROPERTY






• What is LCOE?

– The levelized cost of electricity (LCOE), also known as Levelized Energy Cost (LEC), is the net present value of the unit-cost of electricity over the lifetime of a generating asset. It is often taken as a proxy for the average price that the generating asset must receive in a market to break even over its lifetime.

– If comparing LCOE to various sources it is important that you use the same assumptions throughout the calculations. LCOE Assumptions in model Value

Inflation for Opex (incl fuel cost) 5.50%

Discount rate 8.0%

Lifetime of all projects (years)- with refurbisment O&M throughout 20

Eskom annual price escalation 8.0%




• Average historic Eskom increases

Eskom’s average tariff increase - Last 12 years was 13.24% for Agriculuture (Ruraflex)- Last 28 years was 10.2%

http://www.eskom.co.za/CustomerCare/TariffsAndCharges/Pages/Tariff_History.aspx

http://www.eskom.co.za/CustomerCare/TariffsAndCharges/Pages/Tariff_History.aspx

• Customer load profile








Maximum Demand Allowable through MV line = 1MVA









• Customer load profile – with expected alterations




• Considered energy sources

– Eskom (Ruraflex) – current system

– Eskom (Megaflex) – with additional MV line investment

– Eskom (Ruraflex) + Solar PV

– Diesel generators

– Gas generation – pipeline

– Gas generation – CNG

– Diesel generators + Solar PV





– Gas pipeline – Gas generators





– Compressed natural gas – Gas generators




• LCOE values




• Please note: LCOE prices are based on full equity investment by owner and does not consider cost of capital and also cannot be compared to the PPA price if another party will invest and resell energy to the end user.

• Excess demand to be supplied by secondary source of electricity is the purple columns shown below




Sizings evaluated Generator

running/annum

– Solution 1: 1347kWp and 4000kWh (70%DOD) 3%

– Solution 2: 1113kWp and 3000kWh (70%DOD) 10%

– Solution 3: 758.8kWp and 3000kWh (70%DOD)20%




Entire Eskom bill to be handed over to energy plant owner with new energy tariff to be negotiated. The next slides will evaluate these sized options and will identify a best possible PPA energy tariff pricing based on expected ROI of investors in the market place which is around 15% project ROI (100% equity financed)

Solution 1: 1347kWp and 4000kWh (70%DOD)




Solution 2: 1113kWp and 3000kWh (70%DOD)




Solution 3: 758.8kWp and 3000kWh (70%DOD)




Solution 4: New Eskom MV line + PV PPA




CAPEXSolar PV 1000kWp R 02MVA Eskom line R 9 000 000.00Total R 18 820 000.00

OPEXPV PPA (@80c/kWh – no escalation) R 1 308 988.56Eskom R 6 755 351.37Total R 8 064 339.93

Solution 5: New Eskom MV line + PV self built




CAPEXSolar PV 1000kWp R 02MVA Eskom line R 9 000 000.00Total R 18 820 000.00

OPEXPV PPA (@80c/kWh – no escalation) R 1 308 988.56Eskom R 6 755 351.37Total R 8 064 339.93

CAPEXSolar PV 1000kWp R 9 820 000.002MVA Eskom line R 9 000 000.00Total R 18 820 000.00

OPEXSolar PV R 230 000.00Eskom R 6 755 351.37Total R 6 985 351.37

Inverters (every 10-13 year replacement)

Installing a new Eskom line with the new equipment to be powered by interim solutionsSolar PV system to be purchased by clientCurrent CAPEX cost does not include installation of transformer and no extra insurance cost is applied at this stage

LCOE comparison of real probable solutions




NR DESCRIPTION 10 years 15 years 20years 25 years CAPEX OPEX

Constructio

n

time

kWh/Annum

1 Eskom Ruraflex ( R0.97/kWh) - BASE CASE R 0.97 R 0.97 R 0.97 R 0.97 R 0 R 6 808 119 0 7 008 000

2 Eskom Megaflex (R0.88/kWh) R 1.01 R 0.97 R 0.95 R 0.94 R 9 000 000 R 6 192 978 12 7 008 000

3 Solar PV (18% Partial load) R 1.11 R 0.78 R 0.62 R 0.54 R 12 120 000 R 180 000 6 7 008 000

4 Eskom Ruraflex + Solar PV R 0.98 R 0.92 R 0.89 R 0.88 R 12 120 000 R 5 569 085 6 7 008 000

5 Diesel generators R 3.10 R 2.91 R 2.75 R 2.60 R 4 141 947 R 23 603 470 3 7 008 000

6 Gas generators - pipeline R 2.02 R 1.69 R 1.49 R 1.36 R 55 836 763 R 9 487 754 24 7 008 000

7 Gas generators - CNG R 1.90 R 1.76 R 1.64 R 1.54 R 11 336 763 R 13 530 831 8 7 008 000

8 Diesel generators + Solar PV R 2.77 R 2.55 R 2.38 R 2.24 R 15 841 947 R 19 682 335 6 7 008 000

9 Solution 1 - PPA full @ R1.6/kWh R 1.60 R 1.60 R 1.60 R 1.60 R 0 R 14 707 555 6 9 192 222

10 Solution 2 - Ruraflex@1MVA - with own generators and PV system R 1.61 R 1.43 R 1.34 R 1.32 R 34 429 232 R 10 286 387 6 9 192 222

11 Solution 3 - 2MVA line Megaflex with interim generators + PV + Batt * R 1.09 R 1.01 R 0.97 R 0.95 R 17 320 099 R 6 667 258 4 9 192 222

12 Solution 5 - 2MVA line Megaflex with 1MWp PV system owned R 0.98 R 0.90 R 0.87 R 0.85 R 19 000 000 R 6 985 351 12 9 192 222

13 Solution 4 - 2MVA line Megaflex with 1MWp PV system PPA R 0.95 R 0.90 R 0.87 R 0.85 R 9 000 000 R 8 064 340 12 9 192 222

* 7945177 year 1 = 1 080 033 Reevers + 6 865 145 Current (9 192 222 year 2)

Simplistic LCOE model comparison costs

Grey areas is based on 1MVA supply - 800kW per every hour

NR DESCRIPTION 10 years 15 years 20years 25 years CAPEX OPEX

Constructio

n

time

kWh/Annum

3 Solar PV (18% Partial load) R 1.11 R 0.78 R 0.62 R 0.54 R 12 120 000 R 180 000 6 7 008 000

13 Solution 4 - 2MVA line Megaflex with 1MWp PV system PPA R 0.95 R 0.90 R 0.87 R 0.85 R 9 000 000 R 8 064 340 12 9 192 222

12 Solution 5 - 2MVA line Megaflex with 1MWp PV system owned R 0.98 R 0.90 R 0.87 R 0.85 R 19 000 000 R 6 985 351 12 9 192 222

4 Eskom Ruraflex + Solar PV R 0.98 R 0.92 R 0.89 R 0.88 R 12 120 000 R 5 569 085 6 7 008 000

2 Eskom Megaflex (R0.88/kWh) R 1.01 R 0.97 R 0.95 R 0.94 R 9 000 000 R 6 192 978 12 7 008 000

1 Eskom Ruraflex ( R0.97/kWh) - BASE CASE R 0.97 R 0.97 R 0.97 R 0.97 R 0 R 6 808 119 0 7 008 000

11 Solution 3 - 2MVA line Megaflex with interim generators + PV + Batt * R 1.09 R 1.01 R 0.97 R 0.95 R 17 320 099 R 6 667 258 4 9 192 222

10 Solution 2 - Ruraflex@1MVA - with own generators and PV system R 1.61 R 1.43 R 1.34 R 1.32 R 34 429 232 R 10 286 387 6 9 192 222

9 Solution 1 - PPA full @ R1.6/kWh R 1.60 R 1.60 R 1.60 R 1.60 R 0 R 14 707 555 6 9 192 222

6 Gas generators - pipeline R 2.02 R 1.69 R 1.49 R 1.36 R 55 836 763 R 9 487 754 24 7 008 000

7 Gas generators - CNG R 1.90 R 1.76 R 1.64 R 1.54 R 11 336 763 R 13 530 831 8 7 008 000

8 Diesel generators + Solar PV R 2.77 R 2.55 R 2.38 R 2.24 R 15 841 947 R 19 682 335 6 7 008 000

5 Diesel generators R 3.10 R 2.91 R 2.75 R 2.60 R 4 141 947 R 23 603 470 3 7 008 000

* 7945177 year 1 = 1 080 033 Reevers + 6 865 145 Current (9 192 222 year 2)

Simplistic LCOE model comparison costs

Grey areas is based on 1MVA supply - 800kW per every hour




Solution 4 and 5 is most promising and best value for money

LCOE comparison of real probable solutions

BUYING FROM A POWERHOUSE

• Supply electrical and thermal energy for property. – Electricity– Domestic hot water– Cooled water (HVAC)

• Marketing opportunity for going off grid– More and more pressure for carbon reduction by

listed property owners• Yield enhancing - Delta cost savings on initial CAPEX

– Roof infrastructure, – Backup generators provided for by powerhouse no

need for tenants to purchase– No chillers or HVAC– No electrical geysers required



Documents

Due diligence checklist: how to identify the dominant …...Due diligence checklist: how to identify the dominant elements to pre-qualify your site for its solar potential Nic van