From pig-manure power to wind farms, Virginia’s Dominion Energy is transforming itself into a renewable energy powerhouse—and Berkshire Hathaway’s cash will only accelerate the process. 



“Pigs are extremely efficient,” says Kraig Westerbeek, who oversees renewable energy production for Smithfield Foods, the world’s biggest pork producer. For what farmers put into them, they get a lot out. “They eat 2.4 pounds of feed per pound of gain,” he says. “And they produce more gas per pound of live weight.”



Westerbeek is talking about greenhouse gases emitted by the millions of pigs his industrial farms produce each year. Inside his giant barns, manure and urine ooze through holes in a concrete floor before getting piped to open-air ponds called lagoons—some the size of four football fields. In these lakes of livestock waste naturally occurring bacteria—called methanogens—continue to feed and fart out more gas. All this methane ends up in the atmosphere, and that is bad news for the planet. Pound for pound, methane packs 25 times the greenhouse effect as the standard environmental villain, carbon dioxide. To make matters worse, it’s long been standard practice for farmers to spray the odoriferous lagoon waste on croplands as rich fertilizer—subjecting Smithfield and its former hog-producing subsidiary, Murphy-Brown, to environmental litigation and scathing publicity as local communities cope with the stench and health risks.



But today, Westerbeek has a better story to tell. In recent years Smithfield has been working to perfect methods of capping lagoons with heavy plastic covers that trap the methane (and much of the reek). The gas inflates the plastic domes in amounts sufficient for people to walk on—like an extremely gross air mattress. Smithfield has partnered with Richmond, Virginia-based utility giant Dominion Energy to market the gas. Under the plan, Dominion will siphon the pig gas out of these anaerobic digesters, inject it into interstate pipelines and sell it to green-minded customers looking to cut their carbon footprints. The end result is arguably the cleanest electricity in the nation, says Dominion Chief Operating Officer Diane Leopold. “It’s a win-win-win.” With renewable energy projects, she says, “it’s about how many boxes you can check. This one has an extra box.”



Over the next decade, Dominion aims to invest $650 million into agriculture-derived gas projects. Smithfield will contribute another $250 million. The expected result: 8 billion cubic feet per year of livestock gas—thus preventing the emissions equivalent of 3.5 million tons per year of carbon dioxide. That’s like taking 750,000 cars permanently off the road, or planting 60 million new trees every year. It may sound gimmicky, but replacing just 12% of fossil fuel gas with methane captured from pigs, dairy cows or landfills “can make everything net zero” on an emissions basis, says Leopold.



Helping to underwrite those investments will be the $10 billion ($4 billion cash; $6 billion assumed debt) that Berkshire Hathaway&nbsp;<a href="https://www.forbes.com/sites/eriksherman/2020/07/06/berkshire-hathaway-dominion-energy-natural-gas-pipeline/#204094d3481c">said Monday</a>&nbsp;it will pay for Dominion’s 7,700 miles of long-haul gas pipelines. Dominion had to sell its pipelines to fund investment into renewables, says Hugh Wynne at SSR. And that gave Warren Buffett the opportunity to double down on Berkshire’s pipeline holdings, at a good price. “Buffett is taking advantage of their situation,” says Wynne.



For Buffett, the deal complements Berkshire Hathaway’s existing 16,000-mile pipeline network, thus supporting his bet that natural gas will put the final bullet into coal and be a mainstay of U.S. power generation for decades to come. Berkshire already owns massive wind farms that generate 6,600 megawatts across the West—so it is also knee-deep in renewable energy. And Berkshire’s money will do double environmental duty, as Dominion will use some of the cash to help build its green future. All told, Dominion expects to make some $55 billion of investments by 2035 into low-carbon energy sources—spurred on by Virginia’s aggressive new mandate for 100% carbon-free electricity by 2045.



What a departure this is from the old Dominion Energy. The utility was founded as Virginia Railway &amp; Power Co. in 1909 by Frank Jay Gould, son of robber baron Jay Gould. Its roots are firmly planted in Appalachian coal. Even as late as 1995, when its current CEO Tom Farrell came on board as general counsel, more than half of its power came from burning coal.



Over the past 15 years, Dominion has slashed its carbon dioxide emissions by 52%, first by replacing coal-fired power plants with cheap and plentiful natural gas, and more recently by investing in solar and other renewables. In a decade the carbon intensity of Dominion’s power generation has fallen from more than 1,200 lbs. of CO2 per megawatt-hour to less than 600 pounds. This is in the lowest quartile of American electric utilities, according to consultancy MJ Bradley Group.



A big contributing factor: the changing economics of renewable power. “Solar was not affordable; five years ago we didn’t have a single panel,” Farrell says. Now Dominion, which had profits of $1.4 billion on revenues of $16.5 billion in 2019 (and whose dividend yields 5%), is the fourth-largest solar operator in the country.



Dominion is far from alone in its rush into renewables. Since 2003—when coal provided 51% of America’s electricity—the nation’s power utilities have dramatically cut back their combustion of coal in favor of renewables and cleaner-burning natural gas. Currently, coal fuels just 17% of electricity, and renewables have surpassed it for the first time ever. This trend is just getting started. With its new 2045 mandate for zero-carbon electricity, Virginia joins California, New Mexico, New York, Washington and Hawaii.



After $40 million in R&amp;D write-offs they settled on perfecting the systems being deployed today, whereby each farm’s manure lagoons have been turned into anaerobic digesters that capture its gas and sends it via pipeline to a centralized processing plant. After about three weeks in the digester, what’s left of the manure comes out the other end as sterile, nutrient-rich organic matter used as fertilizer or even livestock bedding. The now less odoriferous water is sprayed on crop fields. The Dominion/Smithfield joint venture will deploy systems at hog operations in North Carolina, Virginia and Utah.



Dominion is also working with startup Vanguard Renewables, which deploys similar systems at dairy farms. Vanguard is backed by the foundation of eBay billionaire Jeff Skoll, among others. It already has 42 diary farms signed up. Vanguard’s president, Kevin Chase, says that even though so-called dairy digesters had been perfected in heavily subsidized Europe over the past decade, owners of natural gas pipelines were initially skeptical at letting in bovine gas. “It was guilty until proven innocent,” says Chase, whose Wellesley, Massachusetts-based company has since landed long-term contracts with Vermont Gas, Middlebury College and Polar Beverages.



Though plenty of municipal sewage systems utilize similar digesters to process human waste, these aren’t as cost-effective because of the plethora of other stuff people put down the drain. “Animal waste is cleaner and more homogenous,” says Chase, because we know that the hogs and cows are eating and what’s coming out. A solution for chicken waste remains an elusive “Holy Grail” because its high ammonia content makes it extremely caustic and tough to process.



Renewable fuels are a priority at the EPA. To ensure that refineries and utilities use the mandated volumes of green fuels, the EPA requires that they either generate or trade for compliance credits (called Renewable Identification Numbers). Thanks to its negative-carbon attributes, livestock gas qualifies for the highest-value credits—meaning that customers could pay Dominion ten times more for hog gas than for the same quantity of gas fracked out of shale formations. That could be enough to generate an additional $100 million a year in revenue.



Not everyone is impressed by the potential for renewable natural gas. “Putting it into a pipeline is better than letting it go loose,” says William McDonough, visionary architect and author of <a rel="noreferrer noopener" href="https://mcdonough.com/cradle-to-cradle/" target="_blank">Cradle To Cradle</a>, about the need for a circular carbon economy. “But it’s still a fugitive carbon. To say it’s the cleanest energy is not correct, if you’re considering climate change.”



McDonough favors using ever-cheaper solar and wind power to electrolyze water into hydrogen. “Green hydrogen” and other climate-friendly efforts are already in the works at Dominion. COO Leopold says they’ve successfully blended 10% hydrogen into their gas-fired power plants; “It’s expensive at the moment, but solar was expensive, too.”



In the years ahead, Dominion could well become Virginia’s biggest private landowner due to all the solar panels it expects to install. And it’s begun replacing diesel-powered school buses with electric ones statewide. Offshore in the Atlantic Ocean, Dominion this summer has installed the first two of what could be hundreds of 800-feet-tall offshore wind turbines generating 2,600 megawatts.  (Reflecting its renewable energy efforts, Dominion has been named to Forbes’ annual <a href="https://www.forbes.com/sites/maggiemcgrath/2019/11/12/inside-the-2020-just-100-how-we-rank-americas-best-corporate-actors/#6e3a06d55bc4">Just 100 list</a> of socially responsible companies.)



Even after Dominion has transitioned from nearly all-coal to zero-carbon in a generation, it will still be looking for the next best thing. Maybe nuclear fusion? “I don’t doubt it,” says Farrell. “A sustainable company is one that adapts to challenges and weathers the storm.”



&#8211; <a href="https://www.forbes.com/sites/christopherhelman/">Christopher Helman</a>, Forbes Staff, <a href="https://www.forbes.com/energy">Energy</a>

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How Buffett’s $10 Billion Pipeline Deal Is Doing Environmental Double Duty Helping Dominion Energy Turn Acres Of Manure Into Clean Power

The Covid-19 pandemic has had significant impact across all sectors including access to electricity. The Distributed Renewable Energy (DRE) sector that provides decentralized energy access to users although equally hit by the pandemic can take advantage of new opportunities for the industry to thrive and grow. With the right support, funding and enabling environment, DRE solutions can become mainstream and play their part to improve access for the 789 million people still lacking electricity. 



Mama Esther has lived in my hometown in Eastern Nigeria for most of her life. She is a small-scale ‘Nsukka’ (yellow peppers) farmer who would typically harvest a few baskets of pepper, some tomatoes and other perishable products daily.



My village has not had grid electricity for more than 30 years and the closest to any form of such are the&nbsp;poles which once had cables connected to them. Towards the end of each market day, Mama Esther will have to sell her products at giveaway prices, barter some of it while the rest will go to waste because the lack of electricity supply means the products cannot be stored.



Mama Esther, just like other small-scale farmers, tends to lose a large percentage of her produce due to the lack of electricity for processing and storage. She remains a small-scale farmer, unable to escape the poverty trap as she cannot transition into producing higher value agricultural products to increase her disposable income, or at the very least maximize her income by reducing losses.



This inadequate access to electricity affects most aspects of life in developing countries – childbirth in poorly lit hospitals, inability to store blood and vaccines safely, children who are forced to study using candlelight, businesses who are unable to operate for longer hours to increase their profitability, and much more.&nbsp; While the Covid-19 pandemic has made these situations more dire, it presents an opportunity for Distributed Renewable Energy (DRE) companies to make a positive impact.



DRE during a pandemic&nbsp;



<a rel="noreferrer noopener" href="https://www.ren21.net/gsr-2016/chapter03.php" target="_blank">Distributed Renewable Energy</a> companies have been providing customers with power, cooking, heating and cooling systems that generate and distribute energy independently of the centralized grid systems over the last few years and currently serve over <a rel="noreferrer noopener" href="https://www.gogla.org/sites/default/files/resource_docs/global_off_grid_solar_market_report_h22019.pdf" target="_blank">100 million</a> people in both urban and rural areas of the developing world, and these numbers continue to increase annually.



Reports by The Economist and the&nbsp;<a href="https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_Global_Renewables_Outlook_2020.pdf" target="_blank" rel="noreferrer noopener">IRENA Global Renewables Outlook 2020</a>&nbsp;highlighted that the outbreak of coronavirus has had significant impacts on the energy transition, particularly threatening global supply chains in the renewable energy sector.



Indeed DRE companies are facing their share of the Covid-19 induced challenges;&nbsp;<a href="https://www.seforall.org/sites/default/files/2020-04/SEforALL-survey-findings-20200417.pdf" target="_blank" rel="noreferrer noopener">surveys conducted by SEforAll</a>&nbsp;shows that they are expecting to lose between 27% to 40% of their revenues in the coming months. In addition, their growth plans are likely compromised, and they have to take precautions to protect their staff and customers. They continue to advocate for ‘essential service’ status to enable them meet the needs of their customers and closely monitor their inventory given the impact of the virus in key component manufacturing countries.



DRE evolving under pressure &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



While concerns remain that the pandemic has slowed down some of the progress that off-grid energy companies have made in the last few years, a closer look shows that the DRE sector is able to continue improving access to electricity by leveraging some of the resulting effects of the crisis.



DRE becoming mainstream as the solution of choice to complement bad grids or inadequate supplies: In regions where the electricity grid is unreliable or even non-existent, the Covid-19 pandemic added a strain to the requirements for reliable energy for health facilities, essential enterprises, citizens sheltering and working from home, and vulnerable communities. In these regions, DRE systems are increasingly serving as a complement to the centralized/ grid energy generation systems, or as a substitute. They provide <a rel="noreferrer noopener" href="https://www.irena.org/documentdownloads/publications/renewable_power_generation_costs.pdf" target="_blank">an often cheaper alternative</a> and sometimes provide the entire energy requirements for essential facilities.In fact, utilities are now receptive to the option of <a rel="noreferrer noopener" href="https://businessday.ng/energy/power/article/mini-grid-operator-gve-partners-abuja-disco-to-provide-independent-power-to-wuse-market/" target="_blank">partnering with DRE developers</a> like mini-grid companies through the increasingly popular <a rel="noreferrer noopener" href="https://rmi.org/wp-content/uploads/2018/11/rmi-undergrid-report.pdf" target="_blank">&#8220;under the grid&#8221;</a> models. The <a rel="noreferrer noopener" href="https://www.thisdaylive.com/index.php/2020/04/22/as-rea-powers-isolation-with-solar-energy/" target="_blank">speed of deployment especially during the pandemic</a> has been important, with installations within a few weeks, coupled with the plug and play nature of some solar home systems. Through simplicity, nimbleness, and mutually beneficial collaborations, DRE companies are becoming a popular choice to meet critical energy needs.



The growth of the Local Supply Chain: The Covid-19 pandemic led to delays in supply of imported solar components and stocking out due to restrictions affecting logistics. Players in the African solar industry are now seriously exploring local solutions to reduce import dependence. <a rel="noreferrer noopener" href="https://www.africa50.com/fileadmin/uploads/africa50/Documents/Knowledge_Center/IRENA_Solar_PV_Costs_Africa_2016.pdf" target="_blank">Some existing local companies</a> who have been meeting local needs for almost a decade and local content requirements in countries like South Africa and Morocco have supported the growth of the local market. In fact, other local assemblers have experienced an up to 7X increase in demand for their locally assembled solar panels and are now exploring ways to increase their capacity. This is clearly an opportunity for <a rel="noreferrer noopener" href="https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/Intersolar-Solarize-Africa-Market-Report_2019.pdf" target="_blank">enabling policies and incentives</a> across African countries to help expand local manufacturing. This would enable value-chain competitiveness and support access to sustainable energy for all.



Promoting the Financial Credibility of DRE customers through increased Financial Inclusion leveraging mobile money: The restrictions in movement during the pandemic  has led to a <a rel="noreferrer noopener" href="https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/how%20the%20covid%2019%20crisis%20may%20affect%20electronic%20payments%20in%20africa/how-the-covid-19-crisis-may-affect-electronic%20payments-in-africa.ashx" target="_blank">significant increase</a> in mobile payments <a rel="noreferrer noopener" href="https://www.weforum.org/agenda/2020/04/coronavirus-set-to-spur-mobile-money-growth-in-w-africa/" target="_blank">across Africa</a>; even beyond <a rel="noreferrer noopener" href="https://clickpesa.com/east-africa-the-heart-of-mobile-money-what-is-next/" target="_blank">East African markets</a> that have well advanced mobile money systems. With energy payments now ranking as a crucial expense just after food, school fees and medical payments, these mobile micro payments become the first channels for financial inclusion of the vulnerable DRE customers, who begin to build credit. Indeed energy companies such as <a rel="noreferrer noopener" href="http://www.m-kopa.com/wp-content/uploads/2019/09/M-KOPA-IMPACT-REPORT-2019.pdf" target="_blank">M-KOPA receive over 30 million mobile money payments</a> per day. With stronger financial credibility of their customers, DRE businesses may see a strengthened position during fundraising processes and as they scale their operations.



<figure class="wp-block-image size-large"><img decoding="async" src="https://www.forbesafrica.com/wp-content/uploads/2020/06/Outlook-image.png1_.png" alt="" class="wp-image-46149"/><figcaption>Ujunwa Ojemeni</figcaption></figure>



The saying goes “never let a good crisis go to waste”, and as seen above, the DRE sector is able to find its way through the crisis as its solutions continue to take their place in the energy mix. Only by supporting these DRE solutions through enabling&nbsp;<a href="https://www.iea.org/policies/about" target="_blank" rel="noreferrer noopener">policies</a>, affordable technology, suitable&nbsp;<a href="http://documents.worldbank.org/curated/en/447971581689878643/pdf/Funding-the-Sun-New-Paradigms-for-Financing-Off-Grid-Solar-Companies.pdf" target="_blank" rel="noreferrer noopener">funding options</a>&nbsp;and&nbsp;<a href="https://www.gogla.org/advanced-search?combine=covid" target="_blank" rel="noreferrer noopener">business support</a>&nbsp;would we help women like Mama Esther to move out of the poverty trap, save lives in our health facilities, help students to study at night, enable businesses to thrive and much more.&nbsp;



– By Ujunwa Ojemeni, an impact investing, energy development and policy expert. She provides her expertise to drive access to energy in Africa through the Office of the Lagos State Commissioner for Energy &amp; Mineral Resources, and is an Advisor with the Private Finance Advisory Network (PFAN). She holds degrees from the University of Nigeria and the University of Manchester, in addition to certifications from the International Finance Faculty and Florence School of Regulation. She is also an Alumni of the&nbsp;Open Africa Power&nbsp;program for young African Clean Energy Leaders by Enel Foundation. To promote the participation in the energy sector, she founded the African Women in Energy Development Initiative (AWEDI Network) focused on promoting the growth of the women in the sector through mentorship programs, career sponsorship (acceleration), networking opportunities, professional development and leadership training for women at all stages of their energy careers and for female students at the secondary and tertiary levels.

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Op-Ed: The Silver Lining For Distributed Renewable Energy Solutions Post Pandemic

The High Court case, in Pretoria on March 27, saw the full gamut of human emotions: anger; frustration and folly, followed by joy.
The latter emotion came from the long-suffering 27 independent power producers who won the case against an interdict to pave the way for the signing of the Power Purchase Agreements (PPAs) with the Department of Energy – the 20-year agreements that give them a chance to claw back $3.8 billion in investment.
The deal will add 2,300MW of green power to the estimated 40,000MW in installed capacity. Despite this, green power will make up 5% of South Africa’s power.
Outside the court, the thwarted National Union of Metalworkers of South Africa (Numsa) members and pressure group Transform SA weighed in with the anger and frustration coupled with a threat to block the streets in protest. As the union licked its wounds, the court poured on salt by ordering it to pay costs as it stuck the application from the roll.
“We got it from Eskom that if they introduce these renewables, they’ve done calculations on power station by power station on how many jobs will be lost. When we did this study last year it was found that 30,000 to 40,000 jobs are likely to be lost and there seems to be no interest about that,” says Numsa Secretary Irvin Jim.
“We are prepared to block the streets to achieve this.”
This claim despite the fact that Eskom will have to close down a number of its ageing and crumbling coal-fired power stations.
<a href="http://www.forbesafrica.com/technology/2017/10/30/road-green-future/" target="_blank" rel="noopener">READ MORE: On The Road To A Green Future</a>
“The South African population is being taken for a ride. Our fiscus is being looted because these companies, IPPs are only producing 5% power and taking 30% of Eskom’s profits,” says Transform SA’s Adil Chabeleng outside the court.
The mighty National Union of Mineworkers (NUM) – the biggest union in Africa with more than 300,000 members – agrees with Numsa that the unions don’t want private money generating the people’s electricity. They also feel that capitalists have benefited from public money ploughed into kick-starting green energy with preferential tariffs.
“We view this capitalist IPPs deal as a backdoor privatization of Eskom. The plan is to privatize 42% of Eskom by 2030 masquerading as the implementation of clean energy,” the NUM said in an angry statement.
“We are going to mobilize all our members and society to revolt against this planned madness called IPPs.”
Days after this fire and fury, Energy Minister Jeff Radebe shocked many by putting pen-to-paper for the PPAs to end the years of waiting.
The big problem now is to revive the dormant green power industry in South Africa.
“We have to resuscitate the industry to generate this power. Supply chains have to be rebuilt and manufacturing restarted. The whole supply chain has lain dormant for nearly three years,” says Brenda Martin, a board member of the South African Renewable Energy Council that represents most of the 27 IPPS.
Martin also refutes one of the claims of the unions that green power will see billions leaving South Africa and into the pockets of foreign investors. Numsa&#8217;s legal counsel Advocate Nazeer Cassim had argued in court that the signing of the IPPs could be viewed as a form of economic looting.
“Only 25% of this deal is owned by foreign investors and the rules of the game is that most of the money must stay in the country.”
Whatever the fall-out over the signing of the PPAs, just weeks before, this unsteady progress was a pipe dream after many months of dithering and a court case.
Picture this: multi-millionaire, suited and booted, investors leave air-conditioned airport lounges to fly thousands of miles to Africa to accept a government invitation to finally sign up for a return on their investment; only to arrive to, amid confusion, a court case, disappointment and a union that they’d never heard of, threatening to block the streets in protest against the deal. Confused? Most of them were.
“Excuse me,” a fresh-off-the-plane Italian investor, who looked like a clown lost in a circus, at the Department of Energy, asked one of the many young journalists at the press briefing, in Pretoria, on March 13.
“What is happening?”
The confused man from Milan was one of a number of foreign investors, from Spain to the United States, who flew in to sign PPA contracts. Investors expect it will take them a decade to claw back their money.
There was chaos before the investors landed that morning. Overnight, the militant Numsa – a union that appears to have forgotten that the Berlin wall came down – claimed it had won a late-night court interdict against the signing.
When it came to the signing later that day, in Pretoria, Energy Minister Radebe told investors that the courts had in fact not issued an interdict, as Numsa had claimed; it rather postponed the next hearing until March 27. You can understand the confusion of the man from Milan.
“It’s a banana republic,” chirped one of the South African investors in the wake of a day to forget in the course of renewable energy.
<a href="http://www.forbesafrica.com/woman/2014/02/01/shedding-light-renewable-energy/" target="_blank" rel="noopener">READ MORE: Shedding Light On Renewable Energy</a>
More inexplicable for investors was how these IPP contracts raised the ire of the unions almost overnight; there was hardly a peep from them in the years of government foot-dragging over signing them that has left many of the green power producers; at least 14 of the 27, according to industry, sources – on the brink of bankruptcy.
The coal-fired power stations of South Africa, built in the 1970s, are ramshackle and inefficient. Last year, the government said it was going to shut down the 3,000MW Kriel, 1,000MW Komati, 2,000MW Hendrina and the 1,600MW Camden power stations, all in Mpumalanga, anyway.
In any case, renewable energy generates a mere 5% of South Africa’s total power so the chances of green energy elbowing out coal, which produces nearly 80%, are unlikely in the extreme. It is more likely that South Africa’s coal-fired power stations will perish under the weight of repair bills and the cost of compliance with environmental regulations on account of the vast amount of acrid black smoke they belch into the African sky every year.
Other energy experts put down the government lethargy over signing the PPAs to ill-advised complacency. Low growth leading to low demand for electricity, plus a 500% increase in cost since 2007, has seen a cessation of power cuts in South Africa, for the time being.
Under the current energy scenario, South Africa will have more than 60GW of capacity by 2022, against a flagging demand of below 30GW, Ted Blom, a partner at Mining &amp; Energy Advisory, said. 
All in all, South Africa, which once dreamed of building the continent’s leading green power industry, creating thousands of jobs, has done quite a lot to destroy that dream. As well as the near three-year delay over signing the IPP contracts – the government has been penny-pinching, that is, trying to negotiate down tariffs with the argument that the country doesn’t really need energy right now.
What it means is that South African renewable energy producers are now looking across the continent for projects in favour of trusting the backed-up process in their own country. One of the unintended consequences of this whole controversy is likely to be that a score of African nations – who once lagged behind in renewable energy – could find themselves at the cutting edge of the industry thanks to South African technology and knowhow fostered by South African tax money and exported thanks to foot-dragging over contracts in Pretoria. Now, for hard-pressed South African taxpayers, that is an issue worth blocking the streets over.

Solar panels and windmills

Save Jobs Or Save Energy? The Dilemma Of Going Green

Off Kampala’s chaotic arterial streets, we are on a dirt road with speed bumps that are large mounds of red earth. The red leads to a yellow building up a slope with awkward barbed wire fencing on its compound walls.
We are at Kiira Motors Corporation’s offices in Ntinda, in northeastern Kampala, home to what the company calls ‘Africa’s first electric car’ and ‘Africa’s first solar-powered bus’.
Outside the main building, a large white bus is parked under a makeshift shed. A scaled-down model of the same is placed under the stairway leading up to the offices. In the distance, a profusion of plantain trees; and a searing sun at 9:30AM.
The bumpy roads to Kiira are in a way akin to the journey ahead for this automobile start-up, ever since the green transportation initiative it kick-started in a little corner of Uganda.
“It’s an uphill task but we are working round-the-clock to deliver on our promises to our nation and the world,” says Allan Muhumuza, Vice-President, Marketing &amp; Sales of Kiira, on the company’s mission to build eco-friendly mobility solutions for urban masses in a country of about 40 million.
<a href="http://www.forbesafrica.com/homepage/2017/10/09/power-woes-stall-ugandas-rise/" target="_blank" rel="noopener">READ MORE: Power Woes Stall Uganda&#8217;s Rise</a>
It all started in 2007 as an extra-curricular activity by a group of students and teachers of the Department of Engineering and Mathematics led by Professor Sandy Stevens Tickodri-Togboa and Paul Isaac Musasizi, currently CEO of Kiira, at Uganda’s Makerere University.
Tickodri-Togboa was head of the department and, together with Musasizi, decided “the paradigm for training university students should be changed, as by the time they graduated, they didn’t have the skills for a working world”.
So they decided to start various extra-curricular projects for students after normal class hours.
Along the way, they were invited to be part of a Massachusetts Institute of Technology (MIT) initiative with the aim of designing and producing a five-passenger plug-in hybrid electric vehicle targeting the Indian market.
Makerere was “the only participant from Africa”, and as part of the project, eventually developed the two-seater Kiira EV, aptly the color green.
The financing came from the Presidential Initiative Fund for Science and Technology Innovations, and the electric car designed and built in Uganda for the first time was launched by President Yoweri Museveni in 2011.
“The original idea was to use the electric car in the Makerere University campus,” recalls Tickodri-Togboa.
In 2014, the team built Kiira EV SMACK, a sedan its makers say is ‘Africa’s first electric hybrid vehicle’; and thereafter in 2016, the 35-seater Kayoola Solar Bus, again ‘a first in Africa’.
“That we have talent in Uganda has been demonstrated with minimum resources… and we also have very good natural resources,” says Musasizi, the engineer-entrepreneur behind Kiira.
<div id="attachment_34060" style="width: 510px" class="wp-caption aligncenter"><img aria-describedby="caption-attachment-34060" decoding="async" loading="lazy" class=" wp-image-34060" src="https://www.forbesafrica.com/wp-content/uploads/2017/10/Uganda-electric-car-e1509349192781-300x225.jpg" alt="" width="500" height="375" />A prototype hybrid sedan is being ripped apart at the Kiira headquarters. (Photo supplied)</div>
The government of Uganda, acting through the Uganda Investment Authority, has now allocated 100 acres of land for a vehicle assembly plant expected to open in Jinja, a town in the eastern region of Uganda, in 2018.
In contrast to the used expensive imported vehicles on Uganda’s roads, these will be factory-fresh vehicles made in Uganda.
<a href="http://www.forbesafrica.com/entreprenuers/2017/10/27/missionary-built-business-empire/" target="_blank" rel="noopener">READ MORE: The Missionary That Built A Business Empire</a>
Right now, Kiira has the three prototypes, and is looking at 305 units in the first year of production. These will mostly be pick-up trucks and buses.
The idea is to also convert the masses using public transport – mostly the ubiquitous matatus and boda bodas.
“We want to shift the market from 14-seater matatus to this. But most of all we want to reduce traffic and congestion. Our buses will be bigger to seat more people,” says Muhumuza, also an engineer.
“We realized that if we are to solve Africa’s traffic woes, the biggest need was to address public mass mobility, as that’s where the volumes and problems were. But also at the same time provide sustainable green solutions… Our emphasis was on the technology, to show that Africa can build solutions for Africa and these can be futuristic as well.”
At the time it was built, the solar bus cost an estimated $150,000 – it has solar panels on the top that powers lithium-ion batteries. If mass-produced, costs will come down.
“It’s a capital-intensive project and we are open to get tech and financing partners,” says Muhumuza, adding Kiira is in advanced talks with some technological partners.
“We are seeing a niche, a special place in public mobility in urban spaces that can be addressed by green buses,” says Musasizi.
East Africa’s automobile sector seems on track for more news. In neighboring Rwanda, there are reportedly plans to set up a Volkswagen manufacturing plant.
Outside the offices of Kiira, the prototype hybrid sedan is being ripped apart by men in blue overalls and being re-engineered. The car is a mere skeleton of its former self, but its journey on Uganda’s bustling streets, powered by an African sun, may just be about to begin.

On The Road To A Green Future

It was an African dream to create a cutting edge renewable energy industry in one of the continent’s biggest economies to attract foreign investment and train a pool of talent to run it; that dream is in tatters with the companies, that sank nearly $5 billion into it, left in limbo and out of pocket.
In the next few months, companies behind 37 signed-off renewable energy projects are likely to be on shaky ground because South Africa’s Department of Energy has failed to sign 20-year power purchase agreements. These agreements not only secure a connection to the national grid, but also revenue. Government promised to sign the PPAs on April 11. This evaporated and many fear they may not be signed before the next Integrated Resources Plan – the national plan for the energy mix to take the country to 2050 – to be finalized next year.
Reading between the lines, it appears the Department of Energy is more interested in eking out aging coal-fired operations, which generate more than 70% of South Africa’s power, and planning for a highly expensive nuclear program that could set back the taxpayer $50 billion. There have also been fewer power cuts this year. The feeling among many insiders at Eskom is ‘why should we pay for what we don’t need right now?’ The national power generator also pleads poverty.
“I would say of the 37 projects, 14 are very vulnerable right now,” Brenda Martin, the head of the South African Renewable Energy Council, said.
“If nothing happens in the coming months, companies will not be able to hold on and there will be closures and retrenchments in which hundreds of South Africans will lose their jobs.”
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If you want to check the temperature of the sick South African renewable energy industry you should look across the border into Botswana. It is a minor player in energy, let alone renewable energy, with peak demand of a mere 600MW for its tiny population of fewer than two million compared to around 40,000MW in South Africa.
In May, the state-run Botswana Power Corporation put out a call for an expression of interest for a partnership in a small 100MW solar project. Usually a call like this would attract a handful of bidders. This one attracted a staggering 166 bidders, most from South Africa – a clear indication of the hunger at home. A mere 62 of these were selected.
“It’s just crazy. We have to search to survive,” one of the South African bidders, who asked not to be named, said.
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The dearth of PPAs in South Africa appears to have unintended consequences across Africa.
“The markets are all opening up across Africa. We have seen shifts happen in sub-Saharan Africa in wind, solar and hydro. Biomass is moving quite fast too and energy from waste is very labor intensive. The bigger companies can go for these projects but the smaller companies won’t be able to afford to,” Martin said.
“But what we are doing now is training wind technicians for jobs in Zambia, Uganda and Ghana. This is the opposite of development that was meant to stimulate jobs for South Africa. We are simply creating jobs for other countries.”
As for a new date for the signing of the PPAs for South African producers?
“I don’t see any strong leadership among government officials right now,” rues Martin.
The Department of Energy requested FORBES AFRICA to e-mail questions over when the PPAs would be signed, which we did and followed up with numerous phone calls. Like the renewable energy producers of South Africa, we didn’t get any joy.

An Ill Wind Blowing Nobody Any Good

Renewable energy has been a hot topic in Africa recently. The increased need to curb coal reliance for energy production has resulted in governments – such as South Africa, Nigeria and Ghana – developing more sustainable energy solutions for the continent.
A worrying reality is that power outages have an impact on the performances of the continent’s economies and might drive away potential foreign investors.
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Off the grid power production has not only been influenced by the need to decrease the reliance on coal, but most importantly carbon dioxide omissions.
Renewable energy is the new gem of Africa. With a favorable climate on the continent, renewable energy has rapidly transformed from being a mere imperative to a lucrative, investment-attracting industry that is growing.
While most energy production on the continent has been state-owned, a brewing phenomenon has been the growth of Independent Power Producers (IPPs).
Female participation within the continent’s renewable energy space is a rarity that is being addressed by governments and policymakers. In South Africa, the department of energy has included the need to incorporate women-owned enterprises in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
With the recent completion of the third bidding rounds of REIPPPP, 17 renewable projects have been awarded to preferred bidders. The estimated deal value for the third round of bidding is said to be around R33.8 billion ($3.1 billion)
One of the successful bidders has been DLO Energy Resources – an energy investment and advisory firm owned by South African entrepreneur Linda Olagunju. Through the Longyuan Mulilo Maanhaarberg consortium and the Longyuan Mulilo De Aar 2 North Wind Facility consortium, the combined capacity of both projects is estimated to be 244MW.
No stranger to sizable deals, this 30-year-old attorney with specialization in energy and project finance was part of the team at Dewey &amp; Leboeuf LPP – now Baker McKenzie – that advised on key transactions in the African energy sector, including Eskom’s $250 million bank loan for its renewable energy projects. Olagunju is also the founder of the Renewable Energy Forum South Africa – a platform that congregates renewable energy players and decision makers within the private and public sectors to engage on key issues affecting the continent’s renewable energy industry.
“Growing up in rural Eastern Cape, prior to the electrification process, therefore having lived and experienced the absence of electricity, I grew up reading about the continent’s vast oil and gas resources and could not understand why countries with an abundance of resources still remained impoverished. Primarily I wanted a further understanding of this, but most importantly to contribute towards making sustainable changes,” says Olagunju.
After being awarded a scholarship to the University of Aberdeen, Olagunju completed her masters in law with a focus on oil and gas law. During this period, she was brought onto a renewable energy organization that was tasked to develop Aberdeen’s first offshore wind farm. It was here that she was introduced to the renewable energy space.
“My introduction to renewable energy occurred at the time when South Africa was facing an electricity deficit and an increase in blackouts. On my return, the national regulator of South Africa was still at the stages of establishing a legal regulatory framework in which renewables could form a part of the energy mix through a feed tariff.”
Olagunju’s perfect timing allowed her to play a contributing role towards the development of South Africa’s renewable energy scene. With Africa set to spend over $72 billion a year on infrastructure development over the next decade, of which energy forms a large part, Olagunju believes that there is still a void within the industry that needs to be filled when it comes to female participation.
“Government is playing an adequate role in ensuring female inclusion, especially in sizable transactions. I do, however, think that the private sector needs to play a bigger role in ensuring that the objectives of female involvement are actually met through ensuring the real involvement of female-owned enterprises and skills transfer,” she says.
With a large part of South Africa’s economy heavily reliant on the mining sector – the biggest electricity consumer – the renewable energy IPP Programme has allowed for the diversification of the country’s energy mix, by integrating renewables into the Integrated Resource Plan. Another benefit of renewable energy projects is the shorter construction turnaround time and connection period, which makes them a favorable solution to address the energy deficit.
International energy companies – mainly from Asia, Europe and the United States – have also been involved in renewable energy projects in Africa. The bidding process in South Africa requires that projects are at least 40% owned by South African companies – a necessary pre-requisite to ensure the sustainability of the projects post-construction and connection. Olagunju believes that there is still a great need for African-owned companies to start investing in such projects to ensure further economic development within the continent.
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“Nigeria has done very well in creating local ownership within the oil and gas sector and it would be great to see some of those companies taking up equity in the renewable energy projects that are in progress. I am a firm believer in inter-African trade and investment and certainly this process provides a platform.”
Olagunju believes that strategic partnerships are the perfect recipe for guaranteed development within any industry, especially in energy.
“It is important to have partners with the right mix of skills in order to grow. It is just as important to align oneself with partners that can facilitate an expansion strategy. In the context of REIPPPP, we have seen companies that have aligned themselves with strong international partners with a solid balance sheet, they have been able to achieve better tariffs,” says Olagunju.
With the on-going transformation of Africa’s energy sector – the privatization of Nigeria’s power sector and South Africa creating a platform for large-scale procurement from independent power producers – renewable energy has been a priority within these agendas.
Other recent developments include: Namibia working on the development of three solar PV plants, Zambia’s Request for Proposal (RFP) for the provision of solar power in the country’s mining region, and Ghana announcing the construction of the largest solar park in Sub-Saharan Africa with the development of UK-based blue energy.
“This [solar] park boasts approximately 155MW capacity and is geared to supply much-needed power to the ECOWAS region. Countries such as Kenya, Angola and Mozambique in their embracing of renewable energy is a clear indication that the continent is slowly moving away from being subsistent to being self-reliant and responsible for its own development, which is a great thing.”
2012 saw Olagunju launch the inaugural Renewable Energy Forum South Africa (REFSA) – a Pan-African conference in which players within the renewable energy space can engage in dialogue and find solutions to challenges faced by the industry.
“The reason why I created REFSA was because I felt that developers and other key stakeholders needed a platform to discuss the sector and issues affecting the sector while sharing ideas,” she says.
It is through platforms such as the REFSA conference that the seeds for intercontinental transactions can be planted.
“For the upcoming 2014 conference, which will be held in March, there will be representatives from Nigeria, Ghana, Mozambique, Angola, Zambia, Kenya and South Africa. What is expected from this conference is the exchange of ideas and insight sharing on the South African bidding process from law firms, such as Norton Rose Fulbright and Webber Wentzel, as well as funding advice from advisory firms such as Fieldstone. Coupled with snapshots into key projects that are out in the market and how one can access such opportunities.”
When it comes to the future of renewable energy on the continent, the road ahead will be a long, arduous and expensive one, but with dedicated individuals like Olagunju driving REFSA the rewards will be priceless.

Tag: Renewable Energy

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