Africa Surveyors May-June issue 2023 digital

traders where a spot market is expected to develop over time.
OPINION
In this context it becomes important to understand where a specific
project sits on the energy cost curve, to provide some comfort that it
will be able to produce power at a competitive rate should it need to
sell power into a liberated market over time.
For most of our clients the investment in renewable energy serves
three main purposes.
Firstly, it provides a level of energy security, particularly for
captive, behind the meter systems where the combination of a
solar installation with battery storage can supply a minimum level
of baseload power. Secondly, based on the tariffs which we are
witnessing in the market, entering into long term PPAs with grid
connected IPPs, can result in a significant saving on their electricity
bill, compared to what they pay the utility.
Author: Theuns Ehlers, Head: Resource & Project Finance, Absa
CIB | Image courtesy
These projects, therefore, assist clients to lower their operating cost
base and improve their position on the global cost curve. Lastly, the
introduction of renewable energy into a client’s energy mix assists in
their targets to reduce reliance on fossil fuels, thereby reducing their
carbon footprint, where most corporates now have clear ESG goals to
achieve net zero emissions by a certain date.
We are in an exciting phase for the energy market across the continent.
There are short-term pains and frustrations when it comes to grid
capacity, but we must not lose sight of the innovations that are taking
place, and how we can utilise these to be a blueprint for the rest of
Africa.
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