IDEAL
Carbon Free Grid-based Energy

The primary philosophy behind SPVR and the core business is to create decentralized mid-merit reliable renewable energy resources in the transmission grid of South and Southern Africa.

These resources are planned to be backed by a utility scale 1 332 MWp CRPG Hydro-electric Pumped Storage (hereinafter referred to “HePS”) system in Southern Namibia along the Orange River as a primary grid management tool offering 8.4 GWh daily during peak and standard time supply to off-takers, being primarily energized by IPP-scale grid connected renewable energy power stations.

Of these power stations 50% are planned to be located in Namibia and 50% in South Africa and the planned mix will consist of 1.5 GWp solar photo-voltaic and 2.1 GWp wind power stations. Apart from the energy dispatched on demand in terms of the REIPPP to the RSA, the HePS will be dispatching the remainder on a time-lined basis to the SADC grids in terms of trading on the Southern African Power Pool Day Ahead Market platform (hereinafter referred to as the “SAPP DAM Platform”), trading to be based on the Modified Single Buyer Model (hereinafter referred to the “MSB” Model or “MSB” Office) of the Namibian Government using block chain technology.

Energy storage will be provided by the CRPG HePS, owned by a company incorporated in terms of Namibian Statutes, owned and financed by sovereign- and climate change funders as equity holders.

Fields of Renewable Energy established from Small Building Blocks

Debt financing is normally approached from a “zero” risk perspective and requires meticulous data capture and analysis for each project to serve as a basis for due diligence information required by debt financiers. Renewable energy requires significant capital investment during the initial years of project preparation, financial close and the completion of construction. The life cycle fuel costs of wind and solar energy resources are normally deemed to be zero but, effectively, the cost of capital fuels the facilities and as such will be subject to volatility of interest rates, exchange rates and inflation related realities.

Security of supply is multi-faceted and requires the utmost cost control and quality management efforts, starting with the environment followed by mechanical considerations, long term stability and generating capacity of the plant employed, operations and maintenance, regulatory requirements for decommissioning and rehabilitation of the site.

In a perfectly designed, constructed and operated power station, the choice of PV modules is the single most important final choice to be made. The decision regarding the modules to be employed will determine life cycle income stream. Of importance are not only the peak production under optimal weather and maintenance conditions but the year-around production of energy (kWh/a) under variable weather conditions.

PV module suppliers are required to prove the annual production capacity and submit a projected life time guaranteed supply.

These play a significant role in the commencement tariff to be tendered for long term power purchase agreements. The targeted outcomes require decades to complete by any number of independent development teams.

Storage and Dispatchability

SPVR offers energy storage on a 168 hour weekly cycle to achieve mid-merit continuous renewable energy supply through the design of hybrid systems primarily based on solar PV energy. Weekend surpluses are stored for dispatch during the working week. Hybrid RE systems dispatch roughly one third of the generated energy directly into the grid and employ the remaining two thirds to energise an energy storage system. These are either batteries (BESS), cryogenically-cooled liquid air (CCLAES), green hydrogen (GHES) or hydro-electric pumped storage (HePS) systems.

The appropriate choice of storage system depends on the environmental imperatives related to each individual site. There are no best options. Energy stored is dispatched when required but mostly during the early evening and morning peak demand timeslots.

Small is Beautiful

(A collection of essays by E F Schumacher; A Study of Economics As If People Mattered; 1973)

Renewable energy power stations depend, inter alia, on economies of scale to be competitive in the market, resulting in financially intimidating projects being the standard. Scale requires significant equity to attract debt financing.

A share block system was chosen where a number of bite sized share blocks are made available on the basis of an undivided share in a ring fenced company. The contributions of equity investors are paid into a fund managed by an independent funds manager on behalf of all the equity investors. The fund manager has a ring fenced seat on behalf of the equity investors on the board of directors of the Ring Fenced SPVR Company and acts for the benefit of the equity investors.

Each bite sized share block will be issued with a metered ring fenced “bite sized” sub-unit in the project, the share block owner gaining an exclusive right to the balance of the income from the metered unit. Share block owners are credited, via the Equity Fund, for the monthly sales from its allocated Unit. Cost of debt, operations and maintenance is serviced by the Ring Fenced SPVR Company on behalf of the share block owners from the proceeds of the said income stream and the monthly balance is paid over to the investor.

The User Pays

SPVR implements the “User Pays Principle'' in a “Day Ahead Market”. Apart from energy dispatched on demand in terms of the REIPPP to the RSA, surplus dispatchable energy will be traded on a time-lined basis to the SADC grids in terms of trading on the SAPP DAM platform, trading to be based on the MSB model of the Namibian Government using block chain technology. Block chain technology to ensure faultless flow of funds, eliminating the possibility of non-payment.

The real asset is the site

In any renewable energy project, the actual site remains the key asset of the project. Only optimal sites should be developed.

Land Owners shall be remunerated in terms of long term lease agreements for access to land required to accommodate infrastructure.

Strength through Partnerships

Whether formal or informal, SPVR can only be as strong as its collaborating partners.

In the normal run of its business, SPVR will enter into energy storage accords with wind energy generators (WEGs) for curtailed energy which will be regenerated and dispatched by SPVR when required by the owner of the stored energy. All agreements are subject to the laws of the country in which the energy was primarily generated. Dispatchable energy is however subject to the laws of all countries providing grid capacity for transmission of the energy.

Strength through Diversity

Equality, the first leg of the SPVR Sustainability ‘EASE’ Statement, is a global imperative for a just future. The South African Government chose to legislate their requirements for equality, giving rise to the implementation of BBBEE requirements.

SPVR has to comply with these requirements and found that it is best complied with through a systems approach combining own efforts with a contracting approach, requiring equity investors, venture capital partners, financing members and unit purchasers to comply. SPVR is a Level 4 Contributor and each individual ring-fenced project specific SPV shall start off as Level 4 Contributor. Each Project shall be a separate “business venture for profit” as defined in terms of legislation, owned by the shareholders striving for the best BBBEE rating possible.