PAWAN SINGH AND NOLAN ESS: Power generated from waste — another viable energy option for SA

Bulking up on consumables over the festive period to reduce financial stress in January can be a lesson in smart financial planning — or a huge waste of money, and goods.

It may have seemed a feasible cost-saving exercise to stockpile perishables — produce such as fruit, vegetables, dairy products or expensive cuts of meat — on offer over December and January. But how many people, and businesses, thought twice about purchasing in advance? The reasons are obvious, but unfortunate.

First, the of risk buying and storing produce early with load-shedding and power cuts is high. For business owners, this scenario extends beyond personal concerns to include reassessing stock, storage logistics and the broader implications for electricity supply. The urgency for viable solutions looms large, beckoning the adoption of alternative power sources to alleviate strain on the national grid and ultimately mitigate the scourge of load-shedding.

While government initiatives such as the Renewable Energy Independent Power Producers Procurement Programme have made significant strides in integrating new generation capacity into the national grid, grid capacity constraints pose significant limitations on adding further generation capacity — especially in good resource provinces such as the Northern and Western Cape.

In this context a compelling prospect emerges: creating energy from biomass waste — organic by-products generated by manufacturing or industries, including plant and animal waste.

Taking power into their own hands

Businesses have taken active steps to become their own electricity producers through the process of embedded generation — primarily by installing backup solar powered solutions. Presently, about 1,800MW of generation capacity has been registered with National Energy Regulator of SA (Nersa), coupled with an additional 4,400MW from rooftop solar installations across households and businesses — a figure equivalent to replacing seven units of the Medupi power station's power output.

Termed embedded generation, which is expected to grow rapidly in years to come, allows for small-scale electricity production close to where the electricity will be consumed without any connection to the national grid, and allows a business to control both the supply and the cost of electricity. Solar power does have limitations too, and the carbon neutrality of battery-powered systems such as solar is questionable.

Alternative solutions turn waste into power

Biomass, which uses biowaste in the production of electricity, is a common alternative energy source around the world. Underutilised in SA, biomass could be the next solar as a solution to power generation. Biomass can be converted into electricity through multiple processes, all of which essentially use the biomass as a heat source that is used to turn a turbine, in a similar way as coal is being used.

Unlike solar or wind projects, biomass is able to act as fuel, which allows businesses to draw on this energy at any time without the need for expensive batteries. In addition, biomass is also able to divert biowaste from landfills, which is another source of greenhouse gas emissions and environmental pollution. While critics may argue that biomass is not truly carbon neutral, as it releases carbon dioxide when burnt, this is only a fraction of the carbon dioxide that coal emits and can be offset by planting more trees and crops that absorb carbon dioxide. The availability and quality of biowaste, the cost and efficiency of conversion and the regulation and safety of production are all challenges to overcome with time. 

A progressive example is the Sanlam Investments Sustainable Infrastructure Fund’s initiative in Umkomaas, KwaZulu-Natal, funding a joint venture between Alien Fuel Group and Sappi. This collaboration aims to repurpose landfill waste from Sappi’s dissolving pulp manufacturing processes into wood pellets for sustainable energy production. These pellets will substitute fossil fuels in industrial burners, generating electricity and steam.

The venture will establish an R80m-plus waste-to-energy plant, with Sappi committing to purchase wood pellets for five years. It is expected that the project will mitigate 57,000 tonnes of annual landfill waste, reducing 322,000 tonnes of carbon dioxide emissions over a decade by diverting organic waste. Independent carbon consultants will verify emission data. Moreover, the initiative is estimated to create 63 full-time local jobs, with a focus on female employment — 25 positions have already been filled.

Job creation and sustainable investment solutions

Renewable energy projects not only decrease carbon emissions but also provide social benefits in the form of job creation, during both construction and operation. These projects do require significant upfront capital expenditure, but due to the long lifespan of such projects these costs are recouped during the operational phase of the project.

Many businesses are unable to afford the day one capital expenditure, but this is where funders and institutional investors play an important role. Funders such as Sanlam Investments, through its Sustainable Infrastructure Fund, can leverage funds invested by institutional investors to cover the early capital expenditure, while structuring the repayment profile so that alternative energy is not only more affordable to the business, but also ensures the institutional investor gets a profitable and sustainably impactful return in the long term.

Through a supportive policy environment, the innovation of businesses and the commitment of funders, these essential projects and alternative sources of energy can be scaled up to be a major contributor to SA’s future energy landscape.  

• Singh is portfolio manager, and Ess investment analyst, at Sanlam Investments' Sustainable Infrastructure Fund.