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Monica_55905 Jun 26

TOTAL EREN EXPLORES HYBRID ENERGY SOLUTIONS FOR AFRICA

TOTAL EREN EXPLORES HYBRID ENERGY SOLUTIONS FOR AFRICA image
Clément Faure, Head of Business Development, Mining and Hybrids at Total Eren, on why hybrid solutions are at the core of tomorrow’s sustainable energy sector.
What’s the reason behind the recent popularity of large-scale hybrid energy solutions across Africa?

Over the past decade, renewable energy technologies have become more and more competitive everywhere in the world. Africa is no different, with tremendous solar and wind resources, and an extensive need for additional generation capacities, not only in remote offgrid areas but also on its supranational and national grids. In this context, hybrid energy solutions combining renewables with energy storage appear to be an adequate way to harvest and optimise the continent’s energy potential.

In remote areas, distributed solar generation, with or without storage, is almost the only wide spread and mature technology able to provide a mid-term competitive power supply thanks to its modularity, while high-voltage transmission lines have proven to be cumbersome and expensive to build. At Total Eren, we contribute to complementing national utilities through our participation in Winch Energy, an off-grid energy developer and technology integrator, which operates mini-grids across Africa.

In national electricity networks and large industrial infrastructures, the hybridisation of existing power generation capacities with the right mix of renewables and storage, although complex, has also proven to be a sophisticated way forward. Take for example the Agadez solar-storage-diesel project in Niger, or our Essakane hybrid solar plant operating in northern Burkina Faso for two years now.
What issues in renewable energy generation continue to hinder its own progress?

One key characteristic is the intensity of its capital requirements. This partly explains why growth has not been as tremendous as it could have been. Extracting the most value out of renewables requires a mid- to long-term view. This applies to any kind of energy user, from industrials to national utilities, whether they invest themselves or enter into a Power Purchase Agreement (PPA) with an Independent Power Producer (IPP) like Total Eren, which develops, finances, builds, owns and operates the renewable power plant. Because renewable energy is not as easily dispatched as conventional generation, all projects have to be adequately tailored to the existing generation capacities of the consumer, be it a country, a factory, or a mine. This is essential to dispatch the renewable energy as and when produced without affecting the reliability of the network.

Lastly, when opting for the IPP model, one also needs to ensure a long-term alignment of interests between the seller and the buyer, as well as confidence in the buyer’s present and future bankability.

This is critical to enable the project to attract the necessary financing, but also to subsequently deliver the expected energy yields and economic returns, this to maintain investors’ confidence in the asset class.

What factors are key when sourcing renewable power?

The obvious and often first cited criterion is competitiveness, but it is too often reduced to the sole unit price tag attached to the kWh, with flagship programs showcasing recordbreaking low tariffs across the continent.

At Total Eren, we tend to rather engage in a ‘value’ discussion with our customers : “Given the current state of reliability, performance and costs within the renewable energy industry, what’s the best value proposition that can be derived from solar, wind, battery storage and energy efficiency solutions?”

Obviously, the more renewables, the more competitive and the cleaner the energy mix, and the greater the hedge against volatility of fuel and power import prices. However, the more intermittent the generation, the more complex the energy management. Value derives from an optimization under two major constraints: the current existing power generation capacities, that will host and dispatch the additional renewable energy, and the need, for the project to materialize, for this value to be tangible for the customer in the short-term.

It is common to see a lot of players being besieged by the perfect but very complex 100% renewable grid, which do not materialize eventually because too forward-looking. In that ‘value’ discussion, we tend to be pragmatic about the underlying complexities, so as not to reach a point where the project cannot materialize because of the significant infrastructure and technology improvements required.

This calls for cooperation, as you cannot always put all what it takes to bring a project to life in a tender. The best strategy is often to carefully select the project stakeholders, to smoothly technically and contractually integrate the renewable energy plant into the buyer’s electricity supply plan, to structure the best financing scheme, and to tailor the optimal risk allocation between investors, lenders and buyers.
Many players say they know how to do this, Total Eren is one of the very few companies with a proven track record. Every day, we pursue complex opportunities, of which we unpack every aspect, to maximize their value and then turn them into reality through partnerships with our clients, rather than pushing forward endless innovation.

What are the pros and cons of bigger projects VS smaller operations? Can you discuss some case studies that may apply to both?

There is no clear answer to this question, and it goes back to the ‘value’ discussion I mentioned before. It always boils down to pre-existing conditions. Hybrid energy solutions for rural electrification are somewhat expensive but the alternative is no power at all for the local communities. On the other hand, when you can leverage robust grid infrastructures, you can deliver very competitive energy from large scale solar or wind plants, but you rely on the availability of the grid over time. Behind-the-meter projects offer more certainty in that regard, but not all the scale benefits.

We are pleased to deploy the required solution for each specific project, no matter the scale, as long as the solution is the right one for the right customer. At the lower end of the capacity spectrum, with our partner Winch Energy, we have deployed hybrid energy solutions in Mauritania, Benin, Togo, Sierra Leone and Uganda. In Burkina Faso, we financed, built and now operate a 15 MW hybrid PV-HFO plant at the Essakane gold mine, the largest unsubsidized solar project brought into operation at an off-grid mining site to date, and a landmark project that we are actively replicating, not only for other mines but also for industrials and islanded grids.

On the higher side of the range, among our numerous large scale solar and wind projects across the globe, we financed and built a 126 MW solar plant within the Benban complex in Egypt to supply the national utility. In Australia, we will even provide no less than five private counterparts with solar energy wheeled through the national grid, from our 256 MW Kiamal project under construction.

Renewable sources don’t have continuous generation, as they are dependent on weather conditions. What are the latest battery storage resources that may help surpass this particular hurdle?

Renewable energy sources are all about energy: they come cleaner and cheaper but are only available as and when the sun is shining or the wind is blowing.
While annual kWh yields can be accurately predicted from statistics and weather models, the kW intermittency requires at all time a balancing source of power, like dispatchable generation or storage. As with everything else, one cannot have it all, and the balance is hard to find.

Energy storage is nothing new: hydroelectricity is a renewable and yet dispatchable source of energy. However, not only do these dams need specific reliefs and very large-scale investments, but recent years have evidenced highly volatile hydrology patterns, new paradigms somehow linked to climate change which need to be anticipated. Pairing hydroelectric dams with solar or wind is, in our view, an excellent way of saving and efficiently managing water in reservoirs.

Battery-based energy storage is also becoming increasingly relevant as the industry matures and manufacturing accelerates, driven by a soaring demand from the mobility industry. Li-ion technologies are the front-runner and the widest spread across the globe, but they still have to prove their economic relevance on a case by case basis. This brings us back to favouring ‘value’ over price tag, whether to enhance the value proposition of renewable energy or choose a standalone configuration behind the meter to offset peak loads at an industrial site for instance.

Based on recent developments, what does the next 10 years look like for hybrid solutions in Africa?

They look great! The rationale is undisputed, and the value will remain project specific. Surprisingly, the challenge will be to cautiously refine concepts only as the technologies mature, so as not to continuously chase projects that are deliverable in five years only, and if many market conditions are met, but rather to deliver real projects that become more and more sophisticated over time.

At Total Eren, we are definitely eager to deliver unprecedented value propositions through complex and innovative hybrid projects, but we also reckon that not all complexities are always desirable. We endeavour to keep having a real impact on the ground across Africa, providing competitive and reliable energy for the benefit of the African population and the private sector.