Green Economy Journal Issue 58

ENERGY
ENERGY
Kearney Analysis
Technologies
with longestablished
cost curves
have
reversed
their decline.
Unlocking the
POWER OF THE SUN
Investing in solar
It has become popular to rely on inverter-only backup systems in the face of loadshedding,
however by adding solar to the system South Africans can save money.
Figure 2. The best way to counteract market forces will differ depending on the strategic goals of the renewable energy source. 1 Value and necessity of
strategic partnerships also in wind offshore are growing.
BY MENLO ELECTRIC*
which supply chain strategy project developers should pursue. While
demand power can be company-specific (think a multi-GW global
utility versus a 100MW independent developer), an industry average
view showcases the big picture. Offshore wind turbines and
electrolyzers have high demand and supply power. Meanwhile,
onshore wind and PV face the most adverse combination of market
forces from a buyer’s perspective, where demand power is low and
supply power is high.
The best way to navigate these market forces is highly dependent
on the respective technology and the underlying strategic goals on
the demand side as well as on the supply side (see figure 2).
• For PV modules, project developers put a clear focus on securing
supply in the right quality and time and at competitive cost.
In addition, ESG compliance, especially regarding forced
labour, is paramount. The potential for additional value creation
and project optimisation with suppliers is rather limited, and
innovation is not as important as in other technologies.
Consequently, pooling PV module demand into large bundles
or a global framework agreement is a better strategy.
• In wind energy, a close collaboration with an OEM can unlock
substantially higher value. OEMs can customise turbines and
support those already in early-stage project development to
maximise project value, enlarging the pie for both parties.
In onshore wind, with its heterogenous and relatively small
projects, a formal strategic partnership agreement is necessary
to enable portfolio-wide collaboration of both parties.
Here, the procurement approach can be customised by
regions, such as by entering a strategic partnership in Europe
but procuring project-by-project in the US. In offshore wind, the
sheer scale of projects allows utilities to get the most – and best
– out of OEM competencies, often without formal partnership
agreements. However, with the aforementioned market shifts,
strategic partnerships may be about to become valuable and
necessary also in offshore wind.
• Electrolyzers are a less-established technology in terms of
supply chain strategy compared with PV and wind turbines.
In procurement, the focus is a bit less on cost (as long as capex
comes down as forecasted in the next few years) and more
on the efficiency to require less renewable electricity. Simply
gaining access to equipment volume is a key concern as well.
Equity investments or technology partnerships are the go-tostrategy
for electrolyzers.
STRATEGIC SOURCING
The choice of the right procurement strategy is a highly individual
decision. It requires careful analysis of a utility’s specific situation
and strategic goals. Follow these steps to ensure an optimal fit of
the resulting procurement strategy:
• Conduct a thorough baselining to understand your cost, risk
and procurement process for each of technology.
• Identify and align your strategic objectives – both from a
procurement and a business perspective.
• Understand the supply market structure and trends, and
define your value proposition to the supply market.
• Develop the right sourcing strategy to enable growth, create
cost competitiveness and mitigate risks on the supply market.
A
significant drawback of relying solely on backup systems is
the inefficiency of charging with alternating current (AC) grid
power. Charging batteries using high voltage AC grid power
results in power losses. These losses occur during the conversion
process from AC to direct current (DC).
Solar PV modules charge the batteries directly, bypassing the
need for converting AC grid power. This direct charging from solar
energy eliminates the inefficiencies associated with grid charging,
resulting in higher overall system efficiency.
Another drawback is the limited use of backup systems during
non-loadshedding periods. When there is no loadshedding, the
backup system remains idle, not actively contributing to
reducing reliance on the grid or lowering electricity costs. This
underutilisation of the system means that the investment made
in the backup system does not provide continuous benefits. It
is essential to explore solutions that maximise the utilisation of
backup systems throughout the year.
By introducing solar PV panels into the system, you can begin to
harness the sun’s energy to power your electrical appliances and
extend the inverter battery’s lifespan for night-time or extended
loadshedding periods. This reduces your dependence on the grid
during loadshedding hours and ensures a more consistent power
supply. There are also added bonuses of lower electricity bills and a
more sustainable energy solution.
THOUGHT [ECO]NOMY
RESIDENTIAL SET-UP EXAMPLE
System consists of:
• 6 x 550W PV modules [R21 000]
• 250/100 Victron MPPT DC-DC charger [R16 000]
• Victron Multiplus-II 5kVA inverter/charger [R28 000]
• 1 x 5kWh lithium battery [R27 000]
The average baseload is around 500W, with a maximum draw of
4 000W on the output of the inverter. The daily energy consumption
ranges from 12kWh to 15kWh, excluding the gas geyser.
From the six 550W modules, an average of 11kWh to 13kWh per
day can be generated, depending on the time of year. Approximately
4kWh to 4.5 kWh is stored in the battery, while the remaining energy
powers the electrical loads.
By shifting lifestyle habits to use high-power-consuming devices
during daylight hours when solar energy is abundant, you can
minimise grid dependency. While the return on investment may
take around 10 years, it is important to note that the solar system
serves not only as an investment but also provides loadshedding
relief and convenience.
As South Africa continues to address its energy challenges, solar
presents a viable option to ensure a more sustainable and resilient
energy future.
When you are ready to embrace solar power and join the movement
towards a more reliable energy landscape, ask your installer about
sourcing solar panels from Menlo Electric South Africa, an official
distributor of JA Solar, Jinko Solar, Tongwei and Longi solar panels.
info.sa@menloelectric.com
*Authors: Hanjo Arms (partner), Oskar Schmidt (principal), Enzio Reincke (partner) and Daniel Handschuh (consultant).
Article courtesy of Kearney Consulting
WATCH VIDEO
greeneconomy/report recycle
HOW TO GET THE MOST OUT OF HYBRID INVERTERS | Home
energy storage solutions by Sungrow | Menlo Electric
Menlo Electric speaks to Sungrow expert Michal Klos about
energy systems, inverters, PV modules and related topics.
Get exclusive insights into the solar industry. Menlo Electric offers
free training to its clients. Participants will learn how to use Menlo
products, market trends market trends and meet leading experts in
the space training is conducted by both Menlo experts and guests. On
completion, a certificate is issued to verify participants' commitment to
professional development.
TIPS TO MAXIMISE SAVINGS
Invest in energy-efficient appliances. To reduce overall energy demand
and augment the effectiveness of your solar system.
Opt for LED lighting. Replace traditional bulbs with energy-efficient LED
lights as they consume consume less energy and have a longer lifespan.
Take advantage of time-of-use pricing. Schedule high-energy-consuming
activities, such as laundry or dishwashing, during off-peak hours.
Monitor and manage energy usage. Install an energy monitoring and
management system to track and analyse your energy usage. This helps
identify areas where energy consumption can be reduced and optimise
the efficiency of your solar system.
* Written by Arno Odendaal, technical sales, Menlo Electric South Africa.
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