Posts

The Largest Green Energy Projects in South Africa

As Eskom fails to keep unplanned breakdowns at below 9,500MW – the level at which it is forced to consider load shedding – since the start of December, there is growing pressure on government to fast-track renewable power projects.

Ntombifuthi Ntuli, CEO of the South African Wind Energy Association (SAWEA), believes just by lifting the Maximum Export Capacity (MEC) on all operating wind farms, which governs how much energy is permitted to be exported by wind farm power generators to the grid, 500MW of energy could immediately be brought online.

According to the Independent Power Producers Procurement Programme (IPPPP), 3,976MW of electricity generation capacity from 64 IPP projects has been connected to the national grid. Wind makes up the lion’s share providing 52% of renewable energy to the grid. Among the largest are 3 wind farms that contribute almost 140MW each.

IPPs are nowhere near the 36,400MW (41,000MW if you include Medupi and Kusile which aren’t finished yet) delivered by coal. But this picture could change quickly: unlike coal power stations, which take years to build – Medupi has been under construction since 2007 – renewable projects can be built quite quickly and there’s a good track record of them sticking to schedules.

There is some good news on the way. IPP contribution is expected to go up to 6,422MW once all 112 projects come online. These are part of Bid window 4, the last bid window to be signed off by Eskom. These are currently the largest sustainable energy projects:

Longyuan Mulilo Green Energy Number 2 North Wind Energy Facility – 138.96MW

Longyuan Mulilo’s Number 2 North Wind Farm is one of the largest wind farms in South Africa. It is a massive 138.95MW farm found a few kilometers outside of De Aar, in the Northern Cape. Along with a second 100MW wind farm, also in De Aar, Longyuan South Africa has invested almost R5 billion into the two projects. Longyuan SA is a wholly owned subsidiary of China Longyuan Power Group Corporation – one of the world’s largest wind-power developers.

Loeriesfontein Wind Farm 2 – 138.23MW

On 8 December 2017, Loeriesfontein Wind Farm was delivered into operation on schedule, and on budget, as part of the third round bid window of the REIPPP. With a generation capacity of 140MW the R3.5 billion farm boasts 61 Siemens SWT-2.3-108 turbines. The Loeriesfontein Wind Farm forms part of a joint venture between global energy producers Mainstream Renewable Power and Lekela Power.

The site was chosen because of its excellent wind resource, its proximity to national roads for wind turbine transportation, the favourable construction conditions, municipality and local stakeholder support, the straightforward electrical connection into the Eskom grid, and studies showed that there would be little environmental impact.

Khobab Wind – 137.74MW

Khobab Wind Farm, also built by Mainstream Renewable Power, is located right next door to Loeriesfontein Wind Farm. Like its neighbour the farm contributes almost 140MW. The wind farm was estimated to cost R3.5 billion.

Cookhouse Wind Farm – 135.8MW

The R2.4 billion Cookhouse Wind Farm comprises of 66 Suzlon S88 wind turbine generators with a capacity of 135.8 MW.

It is located just outside of Cookhouse, in the Blue Crane Route Municipality in the Eastern Cape, and spans 2,600 hectares of pastoral land. The land is leased from a local farmer and you can expect to see plenty of sheep grazing below the blades. The wind farm first supplied electricity to the grid in March 2014.

Suzlon Wind Energy South Africa constructed the wind farm and is currently responsible for operation and maintenance. It is owned by Old Mutual, the African Infrastructure Investment Managers (AIIM) and the Local Community Trust.

Gouda Wind Project – 135.5MW

The R2,7 billion Gouda Wind Farm is owned by a consortium of ACCIONA Energía (51%); Aveng (29%); Soul City Broad-Based Empowerment Company (10%); and the Gouda Wind Energy Community Trust (10%). Located in the Drakenstein munisipality, Western Cape, it has 46 AW3000 turbines mounted on 100 meter-high concrete towers.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], Anastasia Palagutina [2].

How to Reduce your Carbon Footprint While Traveling

According to the University of Innsbruck, a recent study shows that we are helping to melt nearly 6 400 kilograms of glacier ice when travelling by plane. We need to pay more attention to our carbon footprint.

Unfortunately, there isn’t really much we can do about it this point, other than staying at home and never setting foot out of our front door ever again. The same study explained:

“The further melting of glaciers cannot be prevented in the current century – even if all emissions were stopped now. However, due to the slow reaction of glaciers to climate change, our behaviour has a massive impact beyond the 21st century.”

That said, there are ways we can reduce our carbon footprint while travelling. Paloma Zapata, CEO of Sustainable Travel International, explains that it’s not about “closing ourselves in and building a wall”. Zapata adds:

“We need to create bridges, and we need people to find solutions for the issues that we’re creating. Just because you’re sitting at home does not mean that you’re not producing carbon emissions.”

So what to do? For starters, change your habits and make practical choices to promote sustainability. It’s all about the mindset. Let’s look a few ways to reduce your carbon footprint while travelling.

Here are some tips:

Choose your mode of transport carefully

Transport generates the most greenhouse gas. When you have the option of travelling by plane, car, train or bus, choose wisely.

The International Council on Clean Transportation has calculated the passenger miles per gallon (pmpg) of planes and trains at a consistent 45 pmpg and 51 pmpg, respectively. Greyhounds and other inter-urban busses clock in at 152 pmpg.

If you have no other option other than travelling by plane – the worst offender of them all – there are still a few ways you could minimise your carbon footprint.

Choose direct flights where possible and skip the layovers. By buying carbon offsets through Climate Action Reserve, you can ensure that a tree is planted or a stretch of ocean is cleaned up.

Once you’ve reached your destination, limit the amount of time you travel by car as much as possible. When travelling, hire a bicycle instead or explore on foot.

Pack light, fly light

By carrying lightweight equipment and supplies, you exert less force, especially when travelling by vehicle. The lighter, the better.

When on an airplane – or any other mode of transport – carries heavy luggage, it uses more fuel. If you can travel with only a carry-on, do consider it. Not only will it save you time at the check-in counter, but it’s also easier to move around once you get to your destination.

Yours truly is a firm believer in the one-bag-travel mantra, and I’m constantly looking for ways to travel even lighter. I can fit two weeks worth of supplies into a 30L duffle backpack with room to spare.

  • Don’t pack an outfit for every day and don’t be lazy. Pack 2 or 3 shirts, 2 or 3 pants and wash as you need. Polyester dries a lot faster than cotton and should be dry again by morning.
  • Downscale your gadgets. Why travel with a 15 or 17″ laptop when you can get the same amount of work done a 10″ tablet with keyboard? It’s lighter, smaller and easier to haul around.
  • Collapsible and compact. Buy soap and shampoo sheets, they’re tiny and 50 x 2 cm sheets will last you quite a while. Get a travel towel. It’s under a R100 at most places and folds to the size of your fist.

Reduce your carbon footprint by generating less trash

If you haven’t heard about the Great Pacific garbage patch, prepare to be shocked. The mass of waste floating around the Pacific gyre spans about 1.6m square kilometres. It’s three times the size of France.

We have no other option but to refrain from using single-use plastics such as straws, takeaway coffee cups and plastic bags. Transitioning to a zero waste lifestyle takes some work but it’s easy enough to get the hang of.

When travelling, carry your own water bottle; a collapsible water bottle if you’re a one-bagger with limited space. Carry your own reusable shopping bag; they can usually be folded into a tiny ball and won’t take up too much space.

Carrying a small cutlery set with you will reduce the amount of plastic cutlery when ordering takeout. There’s a nifty little thing called a spork – spoon, knife and fork all in one – which is the perfect option for travelling foodies.

And, you know, when you’re out on your travels and you see a plastic bottle or a plastic bag lying around, it’s not going to kill you to pick up and recycle it properly. Most cities have recycling bins, we’re just too lazy to use it.

Save energy throughout your trip

Regardless of where you’re staying, don’t leave the lights and air conditioning on. Don’t think because you’re staying at a fancy hotel, it’s in order to leave the air conditioning on.

Central air conditioning units use 3.5 kilowatts per hour. If you were to turn it off for eight hours while you were out exploring, you would save 28 kilowatts. That’s the equivalent of more than 7.5 litres of fuel or charging 2 525 smartphones.

If you can, book through eco-friendly hotels as they save massive amounts of energy on everything from lighting to doing the laundry. Laundry accounts for 16% of an average hotel’s water usage. By cutting down on the laundry load, you’ll save water and other resources.

Happy traveling!

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: David Marcu [1], [2].

South African Solar Energy Tax Incentives You May Not Be Aware Of

A little-known amendment to the Income Tax Act allows for depreciation in the year of commissioning of the full cost of a grid-tied solar PV system of less than 1 MW used for electricity generation by a business in the course of its operations.

South Africa’s government, energy regulator and Eskom have often been criticised for obstructing the introduction of distributed, small-scale embedded generation (SSEG) which would help businesses to cut costs and ensure the stability of their power supply during load shedding.

But in fact, there are significant and far-sighted tax breaks which have been put in place by National Treasury to encourage and incentivise business owners to install their own generation in the form of grid-tied, rooftop or ground-mounted solar PV systems on buildings, parking lots, warehouses, factories and farms.

Accelerated depreciation allowances

From 1 January 2016, a little-known amendment to Section 12B of the Income Tax Act (Act 58 of 1996) allows for depreciation in the year of commissioning of the full (100%) cost of a grid-tied solar PV system of less than 1 MW used for electricity generation by a business in the course of its operations.

The capital depreciation allowances for solar PV systems greater than 1 MW remained unchanged in the January 2016 amendment to the legislation, which continues to allow full depreciation over three years. This permits depreciation of 50% of the capital cost in the year of commissioning, 30% in the subsequent year, and 20% in the third year.

The accelerated depreciation allowance for solar PV systems applies whether they are installed for the business by contractors or developers, or paid for by the business in a credit sale agreement (as defined in Section 1 of the Value-Added Tax Act) — either upfront in a single payment or in multiple payments over an extended period.

The cost of the solar PV system allowed for accelerated depreciation includes its full direct capital cost, including design and engineering, project planning, delivery, foundations and supporting structures, solar PV panels, AC inverters, DC combiner boxes, racking, cables and wiring, and installation. Finance costs are excluded.

This allowance was confirmed in a binding private ruling by SARS dated 11 October 2018 (BPR 311) in respect of an application by a private company in South Africa to clarify the deductibility of the capital expenditure incurred to install solar PV systems at a number of sites owned and leased by the applicant. The systems were being installed to reduce the company’s electricity costs.

The improved business case

Whether paid for upfront after commissioning, or in multiple payments over an extended period, the benefits of this tax incentive to business owners, particularly for solar PV systems of less than 1 MW, are significant.

Where the company tax rate is 28% and payment is upfront, a 100% tax-deductible depreciation allowance in the year of installation and commissioning will result in a 28% nett discount on the purchase price of the system at the end of the tax year.

This significantly affects and reduces the payback period of a solar PV project of less than 1 MW.

Better still, when paying for the same solar PV system on a credit sale agreement through multiple payments over an extended period, the transaction can be cash-flow positive for the business over the lifetime of the solar PV plant in all but the first months to the end of the tax year during which commissioning takes place.

With these significant tax incentives and the rapidly rising price of grid electricity, the business case for installation of grid-tied, rooftop and ground-mounted solar PV is fast becoming a no-brainer.

Awareness of the incentives

What is most surprising, however, is how few business-owners and companies are aware of these tax breaks, which can make such a positive impact on their cash flow and bottom line.

This lack of awareness is perhaps a result of the difficulties faced in accessing relevant information on the subject from SARS itself.

For example, efforts to simply download or view the up-to-date amended Section 12B of the Income Tax Act from the SARS website and the public internet proved fruitless. Similarly, no response or even acknowledgement of receipt was received to a query sent to the SARS media desk at sarsmedia@sars.gov.za.

Only after a time-consuming search and a paid subscription to a private tax information service provider was this possible.

In an article in Engineering News on 14 August 2019, entitled “Time to end silence on renewables misinformation — SAPVIA chair”, the new chairman of the South African Solar Photo-Voltaic Industry Association (SAPVIA), Wido Schnabel, said:

“The organisation will become more assertive in outlining the benefits of solar for South Africa and in correcting some of the prevailing misperceptions about the role of variable renewable energy in the country’s future electricity system.”

The tax incentives available to businesses for the installation of solar PV systems is certainly something that SAPVIA and other related industry associations should be “shouting from the rooftops” in the interests of their members, as well as those of developers, installers and suppliers of solar PV systems, components and services.

The challenge

Businesses which have installed solar PV in the 2018/19 tax year, or are about to do so, stand to benefit substantially. The Council for Scientific and Industrial Research (CSIR) estimates that there was close to 400 MW of installed solar PV in the country at the end of 2017 and that up to 200 MW was installed the following year. With a wider understanding of the business case, this could be much higher in future.

Most of these installations are less than 1 MW — which is all that most private businesses require across a wide range of sectors of the economy, including manufacturing and retail.

If only the various arms of government, business, labour and communities were on the same page and working with a common purpose to bring the benefits of SSEG to the productive economy and the environment, to address the current electricity and water supply constraints, and to facilitate economic growth and the creation of quality jobs.

This article was written by Chris Yelland (investigative editor at EE Publishers) and Mariam Isa (a freelance journalist).

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Mariana Proença [1], [2].

Greenpeace States Eskom Should Get Rid of Coal Power Stations

A recently published study by Greenpeace Africa has urged Eskom to start phasing out its coal power stations and open IPP auctions for renewable energies.

A study commissioned by Greenpeace Africa titled ‘Eskom: A road-map to powering the future‘ has recommended that the struggling power utility get rid of its coal power stations.

With reports that Eskom’s debt will reach a quite staggering R500 billion, the future of the state-owned company looks increasingly uncertain.

Eskom relies on coal due to the local market producing it relatively cheaply and the significant infrastructure geared towards coal power.

Greenpeace Africa’s senior political adviser Happy Khambule said: “Fundamental reforms of the South African electricity sector and Eskom’s business model are inevitable and urgent.

“This report presents a road-map with solid options for the country’s electricity supply industry crisis, outlines a realistic and sustainable future for Eskom, and ensures that all crucial functions of the South African electricity system improve.”

The negative environmental impact of coal power stations and doubts over its long-term viability as a power source led Prof. Dr. Uwe Leprich, the author of the study, to conclude Eskom needs to start phasing it out.

Key recommendations for Eskom reform include:

  • The gradual phase-out of coal-fired power generation from Eskom to new generation companies (GenCos)
  • The refinancing of Eskom through the decommissioning of coal-fired power stations older than 40 years, and the sale of all remaining coal-fired power plants
  • The retention by Eskom of the important role of the transmission system operator with the possibility of operating its own grid-supporting (non-coal) power plants
  • The opening of the IPP auctions for renewable energies to Eskom as well in order to make it a significant part of the utility’s business model
  • The possibility for Eskom to participate in the newly created six regional electricity distributors
  • The opportunity for Eskom to create new services for end-use customers on the basis of the digitization revolution that is evolving all over the world

To read the full study, click here.

Government sued for air pollution

The recommendation comes in the wake of environmental justice group groundWork and Mpumalanga community organisation Vukani Environmental Justice Movement in Action taking the South African government to the Pretoria High Court over a perceived violation of citizens’ constitutional right to clean air.

“Living in Witbank, one of the most polluted areas in the country, has hugely affected our health and lives,” says Vusi Mabaso, Chairperson of Vukani.

“Both government and industry have continuously failed to deal with the problem, irrespective of our efforts to engage with them to ensure they take steps to protect human health.

“Together with groundWork, Vukani has decided to use litigation to push government to take urgent steps to deal with the high air pollution and in the interest of our health and to protect our right to clean air.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Dominik Vanyi [1], [2].

Relo Originals: Solar Sustainability

Now that we’ve entered springtime in South Africa, the weather is gradually getting warmer, and many of us are preparing for being back at the beach during summer at the end of the year. In a region like SA, we’re lucky enough to get lots of sunshine not only in summer, but year-round. This creates the perfect opportunity to be more sustainable, and make use of solar power. And that’s exactly what we’ve done at our head office in Cape Town.

Solar power

Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV), indirectly using concentrated solar power, or a combination. Concentrated solar power systems use lenses or mirrors and tracking systems to focus a large area of sunlight into a small beam. Photovoltaic cells convert light into an electric current using the photovoltaic effect.

Photovoltaics were initially solely used as a source of electricity for small and medium-sized applications, from the calculator powered by a single solar cell to remote homes powered by an off-grid rooftop PV system. Commercial concentrated solar power plants were first developed in the 1980s.

As the cost of solar electricity has fallen, the number of grid-connected solar PV systems has grown into the millions and utility-scale solar power stations with hundreds of megawatts are being built. Solar PV is rapidly becoming an inexpensive, low-carbon technology to harness renewable energy from the Sun.

The International Energy Agency projected in 2014 that under its “high renewables” scenario, by 2050, solar photovoltaics and concentrated solar power would contribute about 16 and 11 percent, respectively, of the worldwide electricity consumption, and solar would be the world’s largest source of electricity.

Our office

Our head office in Cape Town has, since early 2014, featured 25 photovoltaic panels on its roof, positioned to harness the most sunlight possible during daylight hours. These panels are connected to a smart charge controller, and the power is distributed throughout our building. Electricity usage can be monitored via a mobile app, which provides us with usage history, so that we can track our conservation efforts.

In addition to this, we also have battery units that keep the solar system running. In the event of a power outage, the batteries will keep our essential systems running. To date, we have converted 40.7 MWh of solar energy into usable electricity. All of this is made possible by a SolarEdge system. To read more about them, click here.

Aerial view of Relocation Africa’s head office in Cape Town, South Africa.

The importance of renewable energy

Renewable energy is energy that is collected from renewable resources, which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat. Renewable energy often provides energy in four important areas: electricity generation, air and water heating/cooling, transportation, and rural (off-grid) energy services.

Rapid deployment of renewable energy and energy efficiency is resulting in significant energy security, climate change mitigation, and economic benefits.

In 2011, the International Energy Agency said that “the development of affordable, inexhaustible and clean solar energy technologies will have huge longer-term benefits. It will increase countries’ energy security through reliance on an indigenous, inexhaustible and mostly import-independent resource, enhance sustainability, reduce pollution, lower the costs of mitigating climate change, and keep fossil fuel prices lower than otherwise. These advantages are global.

We encourage other businesses to implement sustainable solutions to their power systems, over time saving both money and the environment.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2], [3]. Image sources: Andreas Gücklhorn [1], [2].