Energy matters
NO GRID RELIANCE
Model 3 meets your demand using alternative energy generation ( 100 %) with energy storage ( batteries ). No reliance on the grid !
Modelling to a client ’ s specific requirement is key to success in any one of the models as it remains about the energy system and not a stand-alone technology !
Let ’ s say that you have now made the decision to secure your operational future , is there traditional funding available to achieve these core objectives ?
Would this most likely be funded off your balance sheet ? Possibly even a consideration to establish a Special Purpose Vehicle ( SPV ) where the energy service provider leases energy to the farming operation ( a mini utility onsite ) or a flat asset rental on the generation facility .
You would have noticed that there is no mention to traditional financing houses / commercial banks as there are very few bankable off the shelf product available today . In many cases the bankability is a stretch !
For this reason , the following funding options are becoming the norm in energy transactions across the continent :
Capex is Reflected on the Balance Sheet of the Farming Operation , direct purchase
Capex is Reflected on the Balance Sheet of the Farming Operation , direct purchase
Capex is Reflected on the Balance Sheet of the Farming Operation , direct purchase
Purchase / Funding Options
A few questions that are key to your understanding of the surrounding environment and the impact on your operation : ȟȟ
How do we understand , measure and mitigate energy security risk in our farming operation ( risk of inconsistent electricity supply )? ȟȟ
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How developed / mature is the existing on-site energy model ? What is the most preferential energy mix ?
Availability of baseload generation ( Eskom ) within the next decade ( Net Reserve Margin )?
How do we prioritize our farming operation with the local electricity distributor or utility and reduce the risk of being load shed ?
Is your power factor ( where applicable from a tariff perspective ) in check and not leading to unnecessary expenditure through penalties ?
Are we on the correct tariff structure with our electricity service provider , are there options to consider . Have we been billed accurately by the electricity service provider ? Is there any recourse ?
What is the potential carbon tax impact on our business post the exemption period ? ȟȟ
Is it realistic to be 100 % off the grid by 2020with cost optimization potential ? What strategic and logical approach needs to be initiated to achieve this after we have secured the immediate load ? ȟȟ
How do we drive an offbalance sheet approach with respect to energy that will in turn allow us to concentrate on our core business and not be distracted by cost and the time intensive environment of energy generation ? ȟȟ
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How do we integrate energy storage ( batteries for after hours use ) in a bankable business case ?
How do we use a bankable pilot program to revolutionize our energy position across the farming operation in the most reasonable time ? ȟȟ
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Can we and what is the best approach to reducing the level of energy poverty in surrounding communities ?
How to positively increase the ratio of cost vs revenue / tonne ?
The next article will answer specific question as to a logical approach / next steps to start implementing some of these models .
Please forward any energy related questions that you would like answered in the next or upcoming publications to Ask Gareth - askGareth @ energysecurity . co . za
Input to this article was sourced from : Energy Security Services Africa , Gareth Gregory , Africa Head , Strategic Energy and Client Delivery ( Agri ) + 27 ( 0 ) 73 220 6824
SABI | FEBRUARY / MARCH 2017 27