Discovery Green, the renewable energy subsidiary of Discovery Group has said the uptake of its product to wheel renewable energy from wind and solar sources on demand to clients was near oversubscribed.
This is as new research reveals that businesses can just as easily rack up costs by acquiring too much solar energy as current approaches available to businesses for procuring renewable energy are short-sighted and risky.
Head of Discovery Green, Andre Nepgen, yesterday said there had been extremely positive response from the market with the unit, quoting over three times the quantity of firms it intended to take on at inception.
“I obviously can only give you a non-quantitative update and that is there has been a very positive signal from the market. We are ready to start construction of new projects at the end of quarter three or start of quarter four this year,” Nepgen said.
“There are wind and solar plants we are starting on and it will take north of two years for delivery to come through.”
Discovery Green has identified sites in the Western Cape for wind power plants and several for solar power generation though current plans are for a site close to the Thuthuka Power Station.
Discovery’s initial projection was stimulating investment of about R20-R25 billion in the energy infrastructure by procuring between 400MW and 1GW of wind and solar energy from a curated list of leading local and international Independent Power Producers (IPP).
Nepgen said that according to analysis of over 300 connection points, 58 companies and various renewable energy generation facilities, businesses are procuring too much solar, alongside an “alarming growth rate” of the solar energy industry and could increase total energy costs by more than 50% in the long-run.
He said Discovery Green’s research paper provided a technical review of the five most common renewable strategies including rooftop solar, wheeled wind generation, as well as trading which provide the best long-term financial benefit and protection for businesses against uncertainties.
Nepgen said typically, after replacing 45% of their energy needs with solar, businesses face a 77% premium to fulfil the remaining 55% with renewable sources.
“Our analysis shows that output from a single solar facility can fluctuate by more than 14% between consecutive months, and by up to 33% for wind plants, and that’s if the sun was to shine and the wind was to blow as expected,” he said.
“This can increase to as much as 72% when considering the potential variability within a single time-of-use billing period, which is what ultimately drives a business’s financial savings.”
The unit has noted that where a single business can achieve a 49% renewable energy coverage level before energy becomes wasted, a portfolio of five businesses from different industries acting together can increase this coverage level to 78%.
“Importantly, businesses can use this model to replace at least 90% of their energy consumption with renewables in a single transaction, eliminating the risks presented by low coverage solar-focused strategies,” Nepgen said.
Discovery Green is a renewable energy platform set to unlock an investment of roughly R20-R25bn in South Africa’s energy infrastructure through connecting businesses across South Africa to affordable, renewable power generated by utility-scale renewable plants.
The platform will operate through energy wheeling.
Energy is generated at the most efficient locations in the country and “wheeled” to a business through the existing national grid, allowing businesses to run on more affordable, renewable energy.
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