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Monica_55905 Jun 26

Sustainability and Efficiency: the ultimate goal

Sustainability and Efficiency: the ultimate goal image
Interview with Hans Olav Kvalvaag, SVP of New Ventures, Scatec Solar
Scatec Solar is an integrated independent solar power producer, delivering affordable, rapidly deployable and sustainable source of clean energy worldwide. A long term player, Scatec Solar develops, builds, owns, operates and maintains solar power plants, and already has an installation track record of more than 1.6 GW.

Currently, the company is producing electricity from 1,505 MW of solar power plants on four continents. With an established global presence, 399 MW under construction, and a significant project pipeline, the company is targeting a capacity of 4.5 GW in operation by the end of 2021. Scatec Solar is headquartered in Oslo, Norway.

At the African Energy Forum (aef), Scatec Solar will be part of the Deep Dive on Mining – Increasing Profitability & SDG7, what is the reason behind wanting to participate on that particular roundtable?

Scatec Solar has chosen to be a part of the Deep Dive on Mining roundtable as we have a vested interest in the points and the outcomes of the discussion. Release by Scatec Solar representatives will be the ones to engage on the day. With regards to the reasons why, there are two considerations: scale and environment. Mining, as an industry, plays a significant role in the development of emerging markets as well as established markets across the globe. A massive contributor to growth, however mining is also one of the most polluting activities. This means there’s loads of room for improvement, with Release focussing on cost and emissions reduction. We have a product that is the perfect application and solution for the mining industry.

Release is a fully scalable solar power solution that reduces electricity costs and increases energy independence. The combination of a leasing agreement and flexible contract length greatly reduces any financial liabilities. Release is a solution that increases business flexibility and profitability, and in an industry where the value of a commodity can vary, this is imperative.

Can you provide a case study of an IPP in Mining? Can you speak of wins & learns regarding such a project, to help others in this space?

As Release is a new industry offering, we cannot publicly share our insights at this stage. However, engaging with industry players has proved to be the best method of learning. Mines cannot commit to high capital expenditure, and would rather, from a balance sheet perspective, undertake operational expenditure. With many factors to consider in emerging markets, where most mines are found, it is of great benefit to have flexibility when obtaining an asset. Release can integrate the experience and expertise generated in and by Scatec Solar over the years – and possess the necessary intel as to how and why it has been so difficult for mines to procure renewable sources of energy in recent times.

What’s your link with the second part of the Deep Dive: ‘Increasing Profitability & SDG7’?

Release’s direct solutions to increasing profitability and SDG7 (affordable and clean energy) are: reducing costs; flexible contract duration and sizing; and rapid deployment.
Solar, coupled with a storage system, can provide a significant cost savings annually. While the impact may not be visible after the initial capital and contract outlay, however year on year, it will. Input costs like diesel, and operational costs like transportation can be condensed.

With a more efficient and sustainable operational structure, production will rise alongside. Because the mining industry is so heavily dependent on fuels as a primary source of energy, renewables can provide a supplementary, complementary, and principal role in the delivery of power to off-grid and grid connected mining operations. Mines must be willing to adapt their systems, as over the long term, we see the industry being fully powered by renewables and storage systems. Scatec Solar not only assists with the deliverance of the technology, but also cooperates commercially through an equity financing platform.
With Release acting as the developer, the mine operators do not need to concern themselves with the traditional red tape in engaging with an Independent Power Producer (IPP). The customer has one contract, everything is pre-financed, and installation can occur after two months after the contract is signed.

How do they measure the impact of IPPs on industries/communities?

The responsibility of social benefit to communities surrounding the mines falls directly. Scatec Solar plans and implements community development programmes in local communities where we have operations. The projects under these programmes are identified in close dialogue with local stakeholders and in consultation with local community members in order to address the prioritised needs and significant social challenges of the communities.

Do you have any ESG strategies in place currently?

Sustainability is an integral part of our organisation and is embedded in all business units, including project development, solutions/execution, asset management and operations. Scatec Solar is committed to operating in line with the Equator Principles and the IFC’s Environmental and Social Performance Standards to ensure consistent practices across all projects. Our work is also guided by the OECD Guidelines for Multinational Enterprises and we work with trusted partners such as the IFC, Norfund, KLP and several larger development banks that all have high standards for the projects and their associated impact. In 2018 we moved our company closer to best practices in sustainability reporting. We wanted to make it easier for our stakeholders to evaluate our sustainability work and performance through more relevant and consistent reporting. We pursued several new global initiatives in 2018, including the UN Global Compact and the Carbon Disclosure Project (CDP). We also spent considerable time engaging with several key stakeholders including partners, shareholders, lenders, and employees to make sure we have a clear understanding of their concerns and interests regarding sustainability.

The focus of our socio-economic and environmental programmes and development includes, but is not limited to, access to energy, capacity building, health and education. Key guidance for initiatives includes our Company’s selected United Nations Sustainable Development Goals (UN SDGs). Scatec Solar has prioritised three primary SDGs to which we contribute most, based on our materiality assessment informed by stakeholder and company priorities. Our local development programmes are guided by the SDGs outlined below.

Partnerships for the Goals is the way in which we approach the community programmes through solid partnerships.

What are the outcomes of your participation at aef 2020 that you are most looking forward to?

From the perspective of both Scatec Solar and Release, we hope to engage with new and familiar faces in the energy industry – to develop relationships and begin discussions for future partnerships and business development. AEF brings together decision-makers in Africa’s energy sector to form partnerships, identify opportunities and collectively move the industry forward. With the loyal following of credible players working in the power space, and a track record of delivering a valuable networking experience, Scatec Solar, and now Release are excited to engage at the forum once.