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GG Energy Holdings Stable Power Stable Pricing Page | 1
Employing Solar PV
in African Mining
1Page |
GG Energy Holdings Stable Power Stable Pricing Page | 2
The Mission of GG Energy
STABLE POWER AT STABLE PRICES!
 Generating needed & affordable power
 Targeting long-term contracts directly with
bankable private customers in the African
Industrial & Mining Sectors
GG Energy Holdings Stable Power Stable Pricing Page |
GG Energy Credentials
• Track record of 150 MW installed and operating renewable energy projects
• 100 plus MW under development in the Mining Sector
• Financed over $350 million sustainable energy projects
• Founding Sponsor of US Power Africa Initiative
• Working relationships with global technology leaders
• Financial Strength – Commitments in excess of $400MM for initial projects
• Sponsors of African Energy & Mining Forum
3
GG Energy Holdings Stable Power Stable Pricing Page |
Increasing Demand for Power At Mines
4
Source: World Bank – The Power of the Mine
• Forecast Demand CAGR of 5.6% to 2020
• Continuous growth in South Africa
• Increasing growth in Sub Saharan Africa
GG Energy Holdings Stable Power Stable Pricing Page |
Macro Challenges to Power at Mines
Mining in Africa suffers from Macro issues: availability, quality and pricing:
• Declining Hydro levels
• Where gas is available - Slow integration of domestic natural gas supply:
o Little attention to national policy
o High cost of extraction
o Glut of supply limits price and market potential
• Overall move towards Cost reflective tariffs
• Potential Introduction of Carbon Tax – impacting expanded use of coal
5
GG Energy Holdings Stable Power Stable Pricing Page | 6
Unstable Power...
Power Issues Facing Mines in Africa
Poor grid maintenance and distribution leads to erratic voltage
levels and power availability.
GG Energy Holdings Stable Power Stable Pricing Page | 7
Intermittent Outages…
Power Issues Facing Mines in Africa
Power availability issues are agnostic to grid availability especially
in core mining countries... South African issues are no less acute.
GG Energy Holdings Stable Power Stable Pricing Page | 8
Escalating Pricing Uncertainty!
Power Issues Facing Mines in Africa
* Simple linear extrapolation based on approved annual average tariff increases
GG Energy Holdings Stable Power Stable Pricing Page |
Overcoming the Power Crisis at the Mines
In sum, Africa is engulfed in Long-term structural issues
leading to:
 Unstable Power
 Intermittent Outages
 Escalating Pricing Uncertainty
Mines seek Power Reliability and Quality, which for many
reasons is not fully present in Africa.
9
GG Energy Holdings Stable Power Stable Pricing Page |
Why Go Solar?
Important Reasons for deploying Solar PV at
Mines:
1. Reduce risk of power loss from supply
disruptions;
2. High potential to reduce and stabilize
electricity costs;
3. Reduce carbon emissions;
4. Enable Mines to repurpose land used;
10
5. Opportunities for cooperation with neighboring
industries/communities.
GG Energy Holdings Stable Power Stable Pricing Page |
Powering Mines with Solar PV
11
Off-Grid
• Long-term pricing
hedge
• Thermal-Solar Hybrid
for lower cost of power
• Baseload with Energy
Storage
• Rapid Deployment
On-Grid
• Long-term pricing
hedge
• Load Balancing
• Rapid Deployment
Weak-Grid
• Long-term pricing
hedge
• Load Balancing
• Grid Stabilization
• N2 Baseload with
Energy Storage
• Thermal-Solar Hybrid
for lower cost of power
• Rapid Deployment
GG Energy Holdings Stable Power Stable Pricing Page |
Winning plan for Solar PV
12
• Fast and flexible deployment
• Provide for Long-term pricing hedge
• Road map to succeed in deployment of Solar PV:
a. Technical Challenges
b. Commercial Issues
c. Regulatory statutes
Structure for success!
GG Energy Holdings Stable Power Stable Pricing Page |
Overcoming the Technical Challenge
Customized Solar PV solutions must provide for:
Power Reliability and Quality
Ensure continuous operation and performance
MAINTAIN MINE SAFETY!
13
On-Grid Applications:
• Meet Load Shedding needs
• Ability to maintain power over tie-line controls
• Support Gen-sets for Black Start during power failure (Island Mode)
Hybrid Solutions for Off-Grid Applications:
• 24/7 Solution
• Conventional Power base
• Solar PV provide 60 to 80% of load
• Utilize storage for load balancing and minimize spinning reserve requirement
GG Energy Holdings Stable Power Stable Pricing Page |
Complete Micro-Grid Solution
14
GG Energy and CAT provide integrated Power Solution for 24/7
efficient operation:
• Diesel/HFO Generators
• Solar PV Power Modules
• Battery Storage
• Hybrid Controller
Minimize Fuel Consumption
Seamless integration
Reduced emissions
GG Energy Holdings Stable Power Stable Pricing Page |
Solving the Commercial issues
• IFRS treatment of PPA or Lease arrangements on
Balance Sheet
• Capital Costs – Inverse relationship between Solar
PV and Conventional Power
15
• Pay upfront – Solar PV Take-or-Pay Framework vs. Pay-as-you-go for
Conventional
• Life of Mine – often shorter pay-back period than Solar PV project!
• Potentially Stronger Business Case for Solar PV/Hybrid systems in
remote, off-grid locations!
 Shorter Life of Mine;
 Offsetting higher priced fuels
• Consider using Mining company subsidiary SPV structure for
Power company – becomes a self-production venture.
GG Energy Holdings Stable Power Stable Pricing Page |
Effective Financial Structures
• Balance risk allocation to those best able to manage it!
o Contract/Termination Risk – according to source of default
o Construction Risk – seek strong EPC to backup
o Payment Risk – possibly include ultimate off-taker coverage
• PPA Payments – target to Levelized cost of electricity and expected
cost of power
• Separate Availability (capacity) and Minimum Output payments
• Optimize debt sources – Integrate DFI lending and ECA coverage for
longer tenure and lower cost
16
GG Energy Holdings Stable Power Stable Pricing Page |
How Making Renewables work
Work Cooperatively – IPP and Mine are not adversaries!
• Focus on Grid Parity – Seek integrated solutions priced
to meet customers long-term power costs
• Investigate Lease Models – Match commitment to buy
power consumed
• Expand off-take group – sell to mining consortium/
regional power pools
• Include sustainability and environmental issues in cost-
benefit analysis
17
FOCUS ON THE LONG TERM!
GG Energy Holdings Stable Power Stable Pricing Page |
Thinking “out of the Box”
18
Tender for
Partners not
Projects!
• Saves time and
costs on all sides
• Work cooperatively
for the most cost-
effective solution
and approach
Secondary Off-
takers – Look for
local off-taker
opportunities to
backup primary
PPA
Establish a joint-
venture with the
IPP:
• Self-production
Model
• Overcomes
regulatory and
commercial hurdles
• Mitigate potential
tax/balance sheet
implications
Bring in Utility as
a partner:
• Direct PPA between
IPP and Utility
• Mine can provide
guaranteed off-take
• Utility provides
load balancing
• Grid benefits from
stabilization from
Solar PV
GG Energy Holdings Stable Power Stable Pricing Page |
Closing Words
19
• Long-term structural issues impacting Energy supplies and pricing;
• Mines have to be proactive and bold in sourcing alternative power
sources;
• Solar PV is the fastest clean energy source that can deployed at
Mines;
• Cooperation between the IPP and the Mine in early stages of a
project is critical to successful and beneficial implementation of Solar
PV Solutions at Mines -
• Collaboration is the Best way to overcome:
 Regulatory obstacles
 Technical issues
 Commercial challenges
GG Energy Holdings Stable Power Stable Pricing Page |
Questions and Follow Up
20
Ira Green
Managing Partner
GG Energy Holdings LLC
Tel +1 646 443-0513
ira.green@ggenergyholdings.com

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Effective Employment of Solar PV MiniGrids in African Mining

  • 1. GG Energy Holdings Stable Power Stable Pricing Page | 1 Employing Solar PV in African Mining 1Page |
  • 2. GG Energy Holdings Stable Power Stable Pricing Page | 2 The Mission of GG Energy STABLE POWER AT STABLE PRICES!  Generating needed & affordable power  Targeting long-term contracts directly with bankable private customers in the African Industrial & Mining Sectors
  • 3. GG Energy Holdings Stable Power Stable Pricing Page | GG Energy Credentials • Track record of 150 MW installed and operating renewable energy projects • 100 plus MW under development in the Mining Sector • Financed over $350 million sustainable energy projects • Founding Sponsor of US Power Africa Initiative • Working relationships with global technology leaders • Financial Strength – Commitments in excess of $400MM for initial projects • Sponsors of African Energy & Mining Forum 3
  • 4. GG Energy Holdings Stable Power Stable Pricing Page | Increasing Demand for Power At Mines 4 Source: World Bank – The Power of the Mine • Forecast Demand CAGR of 5.6% to 2020 • Continuous growth in South Africa • Increasing growth in Sub Saharan Africa
  • 5. GG Energy Holdings Stable Power Stable Pricing Page | Macro Challenges to Power at Mines Mining in Africa suffers from Macro issues: availability, quality and pricing: • Declining Hydro levels • Where gas is available - Slow integration of domestic natural gas supply: o Little attention to national policy o High cost of extraction o Glut of supply limits price and market potential • Overall move towards Cost reflective tariffs • Potential Introduction of Carbon Tax – impacting expanded use of coal 5
  • 6. GG Energy Holdings Stable Power Stable Pricing Page | 6 Unstable Power... Power Issues Facing Mines in Africa Poor grid maintenance and distribution leads to erratic voltage levels and power availability.
  • 7. GG Energy Holdings Stable Power Stable Pricing Page | 7 Intermittent Outages… Power Issues Facing Mines in Africa Power availability issues are agnostic to grid availability especially in core mining countries... South African issues are no less acute.
  • 8. GG Energy Holdings Stable Power Stable Pricing Page | 8 Escalating Pricing Uncertainty! Power Issues Facing Mines in Africa * Simple linear extrapolation based on approved annual average tariff increases
  • 9. GG Energy Holdings Stable Power Stable Pricing Page | Overcoming the Power Crisis at the Mines In sum, Africa is engulfed in Long-term structural issues leading to:  Unstable Power  Intermittent Outages  Escalating Pricing Uncertainty Mines seek Power Reliability and Quality, which for many reasons is not fully present in Africa. 9
  • 10. GG Energy Holdings Stable Power Stable Pricing Page | Why Go Solar? Important Reasons for deploying Solar PV at Mines: 1. Reduce risk of power loss from supply disruptions; 2. High potential to reduce and stabilize electricity costs; 3. Reduce carbon emissions; 4. Enable Mines to repurpose land used; 10 5. Opportunities for cooperation with neighboring industries/communities.
  • 11. GG Energy Holdings Stable Power Stable Pricing Page | Powering Mines with Solar PV 11 Off-Grid • Long-term pricing hedge • Thermal-Solar Hybrid for lower cost of power • Baseload with Energy Storage • Rapid Deployment On-Grid • Long-term pricing hedge • Load Balancing • Rapid Deployment Weak-Grid • Long-term pricing hedge • Load Balancing • Grid Stabilization • N2 Baseload with Energy Storage • Thermal-Solar Hybrid for lower cost of power • Rapid Deployment
  • 12. GG Energy Holdings Stable Power Stable Pricing Page | Winning plan for Solar PV 12 • Fast and flexible deployment • Provide for Long-term pricing hedge • Road map to succeed in deployment of Solar PV: a. Technical Challenges b. Commercial Issues c. Regulatory statutes Structure for success!
  • 13. GG Energy Holdings Stable Power Stable Pricing Page | Overcoming the Technical Challenge Customized Solar PV solutions must provide for: Power Reliability and Quality Ensure continuous operation and performance MAINTAIN MINE SAFETY! 13 On-Grid Applications: • Meet Load Shedding needs • Ability to maintain power over tie-line controls • Support Gen-sets for Black Start during power failure (Island Mode) Hybrid Solutions for Off-Grid Applications: • 24/7 Solution • Conventional Power base • Solar PV provide 60 to 80% of load • Utilize storage for load balancing and minimize spinning reserve requirement
  • 14. GG Energy Holdings Stable Power Stable Pricing Page | Complete Micro-Grid Solution 14 GG Energy and CAT provide integrated Power Solution for 24/7 efficient operation: • Diesel/HFO Generators • Solar PV Power Modules • Battery Storage • Hybrid Controller Minimize Fuel Consumption Seamless integration Reduced emissions
  • 15. GG Energy Holdings Stable Power Stable Pricing Page | Solving the Commercial issues • IFRS treatment of PPA or Lease arrangements on Balance Sheet • Capital Costs – Inverse relationship between Solar PV and Conventional Power 15 • Pay upfront – Solar PV Take-or-Pay Framework vs. Pay-as-you-go for Conventional • Life of Mine – often shorter pay-back period than Solar PV project! • Potentially Stronger Business Case for Solar PV/Hybrid systems in remote, off-grid locations!  Shorter Life of Mine;  Offsetting higher priced fuels • Consider using Mining company subsidiary SPV structure for Power company – becomes a self-production venture.
  • 16. GG Energy Holdings Stable Power Stable Pricing Page | Effective Financial Structures • Balance risk allocation to those best able to manage it! o Contract/Termination Risk – according to source of default o Construction Risk – seek strong EPC to backup o Payment Risk – possibly include ultimate off-taker coverage • PPA Payments – target to Levelized cost of electricity and expected cost of power • Separate Availability (capacity) and Minimum Output payments • Optimize debt sources – Integrate DFI lending and ECA coverage for longer tenure and lower cost 16
  • 17. GG Energy Holdings Stable Power Stable Pricing Page | How Making Renewables work Work Cooperatively – IPP and Mine are not adversaries! • Focus on Grid Parity – Seek integrated solutions priced to meet customers long-term power costs • Investigate Lease Models – Match commitment to buy power consumed • Expand off-take group – sell to mining consortium/ regional power pools • Include sustainability and environmental issues in cost- benefit analysis 17 FOCUS ON THE LONG TERM!
  • 18. GG Energy Holdings Stable Power Stable Pricing Page | Thinking “out of the Box” 18 Tender for Partners not Projects! • Saves time and costs on all sides • Work cooperatively for the most cost- effective solution and approach Secondary Off- takers – Look for local off-taker opportunities to backup primary PPA Establish a joint- venture with the IPP: • Self-production Model • Overcomes regulatory and commercial hurdles • Mitigate potential tax/balance sheet implications Bring in Utility as a partner: • Direct PPA between IPP and Utility • Mine can provide guaranteed off-take • Utility provides load balancing • Grid benefits from stabilization from Solar PV
  • 19. GG Energy Holdings Stable Power Stable Pricing Page | Closing Words 19 • Long-term structural issues impacting Energy supplies and pricing; • Mines have to be proactive and bold in sourcing alternative power sources; • Solar PV is the fastest clean energy source that can deployed at Mines; • Cooperation between the IPP and the Mine in early stages of a project is critical to successful and beneficial implementation of Solar PV Solutions at Mines - • Collaboration is the Best way to overcome:  Regulatory obstacles  Technical issues  Commercial challenges
  • 20. GG Energy Holdings Stable Power Stable Pricing Page | Questions and Follow Up 20 Ira Green Managing Partner GG Energy Holdings LLC Tel +1 646 443-0513 ira.green@ggenergyholdings.com