Project
City of Johannesburg: Energy Mix Project
This project commenced in February 2021 and was completed in May 2021. PWDXperts executed the whole of this assignment as subcontractor to Fever Tree Consulting as part of the turn around program for City Power, the power distribution subsidiary of the City of Johannesburg.
The project called for the following deliverables:
- Energy Sustainability Market Report
- Energy Demand Decision Support Model
- Energy Sustainability Scenarios
- Energy Sustainability Implementation Strategy
- Energy Sustainability Implementation Business Case
- Energy Sustainability Implementation Plan
The project was successfully completed and all deliverables signed off by the assigned City Power executives. The project outcome was approved by the board of City Power and the strategy formally announced by the mayor of the City of Johannesburg in January 2022.
The following provides an outline of key deliverables:
Decision Support Model
A key value-add of our approach is the utilisation of a sophisticated energy decision support model. The model defines the specific changes in profitability per annum by changing the energy mix of a municipality in South Africa in 3 windows, 2025, 2030 and 2035. It can also show the concomitant reduction in the Carbon footprint.
Through the modelling of scenarios based on Eskom price escalation rates, technology price movements, fuel costs, funding costs, C02 reduction targets and other metrics, the intended application of Energy mix sources can be modelled for gross margin improvements and optimal sequencing of technologies. The model was developed using actual (historical) costing of electricity in each municipality from bulk supplies, pricing of electricity to customers and the modelling of arbitrage options utilising internationally and nationally benchmarked costing of alternative energy options, gas, energy storage, wind, solar and waste to energy. The international benchmarks are drawn from IRENA, LAZARD, World Bank, Bloomberg, and the US Department of Energy. Local sources are actual power projects completed or in the process of completion in Southern Africa, CSIR, Greencape, Meridian and the latest IRP from the DMRE. The objective is to present the arbitrage opportunity to the local municipality and collated to demonstrate the benefit to the province.
Scenario Modelling
The development of scenarios allowed for the client to evaluate the costs/benefits, risks/opportunities, strengths/weaknesses in each scenario. Scenarios are developed from technical, financial and environmental parameters. Each scenario depicts the state of electricity supply in 3 windows of time, 2025, 2030 and 2035. The model provides an exhaustive analysis of each scenario.
Business Case
The consulting team compiled the formal business case that met the requirement of the municipalities’ board for technical and financial decision making. The business case is referable and strengthened with a market survey of pricing to installed alternate energy sources in this part of the province. Ultimately a financial model was developed based on the preferred scenario supported by the municipality. The financial model presents figures for the type of capital and operational costs involved in implementing an alternative energy mix for the city. Here is an example:
Final Report and Close Out
The final report contained the strategy to deploy the new energy mix in a detailed implementation plan.
MiPOWER
MiPower is a team of passionate South Africans dedicated to tackling the nation's energy challenges head-on.
