[PPT] - Energy for Commercial & Industrial Customers in Africa Case PowerPoint Presentation

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Energy for Commercial & Industrial Customers in Africa

Case study

26/06/2020

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CONTENT

EDF C&I in Africa- elements of context The case

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1. EDF

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EDF GROUP - KEY FIGURES

Be the energy for change

69 Billion Euro Sales

90% carbon-free

generation 165 790 Employees in the world

510 Millions Euro R&D budget

584 Twh of electricity generated worldwide

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OUR AMBITION

BE THE ENERGY FOR CHANGE MEANS

PROVIDING OUR CUSTOMERS WITH SOLUTIONS THAT ENABLE THEM TO CONSUME BETTER ELIMINATING CO2 PROMOTING OUR LOW-CARBON MODEL AROUND THE WORLD 1st nuclear operator worldwide 1st renewable company in Europe 3rd European operator in Energy Services Generation Transmission, Distribution Market, Sales Energy Services, Energy Efficiency

1ER ELECTRICITY COMPANY IN THE WORLD LEADER IN CARBON FREE GENERATION EDF COVERS THE WHOLE VALUE CHAIN OF ELECTRICITY

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EDF GROUP IN THE WOLRD

Present in 23 countries with an installed capacity of 132

GW and 90% carbon-free generation worldwide.

33% of EDF sales are made outside France.
CAP 2030 ambition: triple EDF Group activities outiside

Europe.

EDF Group targets to double Renewables installed

capacities to reach 50GW by 2030.

International development now focuses on about 15 target

countries: USA, Brasil, China, India, Cameroon, Ivory Coast, South Africa, UAE,…

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EDF GROUP IN AFRICA

Present in Africa for 50 years.
EDF is supporting its customers

towards their energy projects through various solutions in all types of energy (hydropower, thermal, wind and sun, nuclear, biomass) and all along the value chain of electricity, from production to households through networks: engineering consulting, construction management, technical assistance, delegated management of O&M, training, energy services, etc.

500 000 people have access to

Electricity in Africa thanks to EDF

Ongoing development

f
ff-

grid solar kits for rural areas MOROCCO Wind farms in Tétouan (50 MW) and Taza (150 MW – ongoing) Pumped-storage power station in Afourer (466 MW) Smart city: consultancy for development

f smart services (smart lighting)

SOUTH AFRICA 3 wind farms at Grassridge (62 MW) ; Chaba (21 MW) and Waainek (25 MW), plus

ne

under construction in Wesley (33 MW) COTE D’IVOIRE Ongoing development of off-grid solar kits for rural areas

International Division local office EDF Group presence Wind Hydroelectric Smart cities Solar Thermal Gas Nuclear Energy services Networks Biomass

MOZAMBIQUE DEMOCRATIC REPUBLIC OF CONGO EGYPT ALGERIA SENEGAL TOGO & BENIN CAMEROON GABON CONGO REPUBLIC BURKINA FASO GHANA KENYA Ongoing development

f

solar irrigation system for small-scale farmers

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2. C&I in Africa- elements of

context

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A sample of 7 countries illustrates the challenge of electricity access in Africa and a large spread in per capita consumption

Source: IEA, Worldbank, USAid

South Africa (57,8M)

84% electricity access
4MWh per capita
51 300MW

Country / Zone (population in M)

% of population with electricity access

(2018)

Per capita electricity consumption

(MWh, 2018)

Installed power capacity (MW, 2018)

OECD

100% electricity access
8MWh per capita

Kenya (51,4M)

64% electricity access
0,2MWh per capita
2400MW

Rwanda (12,3M)

34% electricity access
0,04MWh per capita
220MW

Togo (7,9M)

48% electricity access
0,2MWh per capita
230MW

Ghana (29,8M)

79% electricity access
0,4MWh per capita
4400MW

Côte d’Ivoire (25,1M)

65% electricity access
0,3MWh per capita
2200MW

Senegal (15,9M)

62% electricity access
0,3MWh per capita
633MW

Subsaharian Africa

45% electricity access
0,5MWh per capita

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Commercial and Industrial (‘C&I’) uses accounts for 45-75% of electricity consumption depending on countries

Source: IEA, Government of Rwanda

Split of final electricity consumption by sector 2018 est.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% South Africa Côte d'Ivoire Kenya Sénégal Rwanda Ghana Togo Other (transport, agriculture, fishing, non- specified) Residential Commercial and public services Industry C&I

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Businesses in Africa face the challenges of high electricity costs, incomplete access to energy and unreliable supply

50%

0% 50% 100% South Africa Rwanda Côte d'Ivoire Kenya Ghana Togo Senegal

Difference vs world av. electricity prices (%, 2018, industrial usage)

Source: Share analysis, IEA World Energy prices, Doing Business 2020

100%
50%

0% South Africa Ghana Côte d'Ivoire Kenya Senegal Togo Rwanda

Difference vs OECD 100% access to energy (%, 2018) Difference in electricity supply quality index vs OECD (%, 2019)

Note1: Electricity supply index includes « reliablity of supply » and « transparency of tarfiff ») Note2: Electricity price by country based on a simulation for manufacturing plant

100%
50%

0% Rwanda Côte d'Ivoire Kenya Senegal South Africa Ghana Togo

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Solar PV has emerged as a fast growing source of energy (>~50% CAGR), yet accounts for still <5% of the electricity production mix

Source: IEA, IRENA, Africa Development Bank Group, Ghana”s Energy Commission, PANER Cote d’Ivoire, PANER Senegal

Solar PV generation GWh, 2018 16 28 38 200 260 3023 500 1000 1500 2000 2500 3000 3500 Togo Rwanda Ghana Côte d'Ivoire Kenya Sénégal South Africa % of solar PV in mix 2018 CAGR solar PV generation 2013-2018 5,3% 88% 0,4%

∞ (was 0 in ’13)

0% N/A 0,3% 75% 0,8% est.

∞ (was 0 in ’13)

1,7% 45% 1,2% 131% Main sources in mix 2018 Oil (86%), Hydro (7%) Natural gas (83%), Hydro (15%) Hydro (88%), Oil (10%) Natural gas (46%), Hydro (40%), Oil (18%) 38% Diesel, 37% Small hydro, 23% HFO Geothermal (40%), Hydro (30%), Oil (11%) Coal (89%), Nuclear (6%)

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Solar PV serves distinct objectives for Commercial & Industrial offtakers (C&I) across sectors

Source: SE

Objective

7. Telecom towers

Improve bottom line by 20- 40% & deal with unreliable grid

6. Storage / Backup

Power

Secure against unpredictable grid outages with reliable backup power

5. Commercial Off-

Grid Solar with Storage

Gain energy independence, access to electricity or reduce diesel generator costs (small business)

4. Rooftop for Self-

Consumption with Storage

Realize maximum total savings on energy costs (small commercial)

3. Rooftop for Self-

Consumption / Net Metering

Realize maximum total savings on energy costs (C&I)

2. Rooftop for

Feed-in-Tariff

Generate revenue and profit + meet green targets

1. PV-Diesel

Hybridization

Green approach to fuel savings

1. Industrial &

mining

2. Retail &

logistics

9. Hotels &

resorts

8. Offices
3. Telecom

7 Agriculture

4. Hospitals
5. Universities

& schools

6. Banks &

ATM

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In practice, solar PV for C&I takes the form of 3 main configurations

Sources : Share analysis

Basic solar installation

that uses a standard grid link

No batteries required
Solar power when

sunlight is available Features Limitations

Most cost-effective

solution Advantages

Grid tied system with

battery back-up

Solar energy is stored to

be utilised when sunlight or grid is unavailable. GRID TIED

Does not

provide backup GRID TIED WITH STORAGE

Can operate

independently from the grid

Cost of quality

batteries (new + replacement)

Integrates solar and

batteries with generators to ensure 100% power up

Can be grid tied or off-

grid

Supplies power

even if no grid is available BLENDED System configuration

Solar panels +

inverter

Solar panels +

inverter + inverter charger battery

Solar panels +

inverter + inverter charger battery + genset integration Typical payback

3-5 years
5-7 years
7-10 years

“Panels last for 20+ years, but batteries are wearing parts limited to maximum 2000 cycles (i.e. about 5 years if daily cycle)” Industry Expert

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Solar Companies often propose 2 financing options for C&I users

Sources:cleanmax; Onesolar; SunNetEnergy; Sologix, Note: *CAPEX: Capital Expenditure ; **OPEX: Operating expenditure ; PLA and PPA tend to be commonly used without clear delineation

Ownership Economical model & payback Off-taker’s expense

nce installed

CAPEX* (“outright/direct purchase”) OPEX**

Customer owns the asset
100% investment borne by customer
Typically

requires long lead time approvals at senior Management Level

O&M charges after system purchase
Capital

repaid through generated electricity

3-10

years depending

n

system configuration

Customer can claim tax benefit through

accelerated depreciation Length of commercial cycle Investment

The Energy company (EC) initially owns the asset
Zero upfront investment by the customer
Quickly replicable and scalable
Immediate savings (10-40% cheaper than Grid electricity

Tariff)

Case-by-case depending on agreement structure (final
wnership, captive or partially shared use,…)

Tax benefits and impact on accounts (“Leasing / rental / PLA / PPA”)

Depending on pricing mecanism set in the agreement

Example : 15 years PPA between Unilever Tea and Crossboundary in Kenya (619kW)

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Other context elements

Competition with diesel gensets
Eg in Kenya: 57% of companies are using a genset
Lower upfront investment vs. Solar, higher operation costs
Need for supporting regulatory frameworks
Eg determination of feed-in tariffs, net-metering mechanisms, wheeling agreements
Intermediary size between « residential » and « utilities »
C&I typically between 30kWp and 5MWp capacity
Player profiles
Different backgrounds: financiers, developers, installers, operation & maintenance specialists
Diverse focus: utility, C&I, home systems
Energy Efficiency
Most players focus on the generation side and neglect the volume of electricity consumed (“the

cheapest electricity is the one you don’t use”)

Increasing pressure for greener Energy

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3. The case

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The case

"Meeting the energy needs of Commercial and Industrial customers in Africa in a low carbon way: which segmentation, which offer, which commercial approach for a global power utility?"

What is expected

10-15 slides presentation with a clear story, well structured and fact-based slides
Templates will be provided by the ShARE team
ShARE will select the top 3 presentations who will present to EDF and who will rank the finalists

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Process and time line

Presentation of the case

Issue tree feedback session First 4 slides feedback session Final draft submission

26th June 12:00 CEST Monday 29th June 17:00 CEST

Issue Tree

Issues Sub-issues Hypothesis Analysis to conduct Priority (1,2,3) Issue 1 Sub-issue 1

xxx
xxx

Sub-issue 2 Issue 2 Sub-issue 1 Sub-issue 2

Instructions

Remember that “issue” can refer to any analytical category
Please add more rows as necessary; add more issues or sub-issues as you see fit
Please add more columns as necessary in order to break down any sub-issue into smaller categories
One analysis at least for each and one hypothesis
For each analysis, put a priority 1-2-3 (1 top priority; based on impact vs feasibility)