Reunert targets renewable energy market
Thursday, 30 June 2022
JSE-listed industrial group Reunert has set its sights on capturing a critical market in South Africa and beyond: renewable energy.
The group, during its investor day showcase on June 28, highlighted its renewable energy strategy execution, which leverages its renewable energy cluster that spans solar energy embedded generation engineering, procurement and construction; solar energy asset ownership through a build-own-operate (BOO) model; high performance, ultrareliable, locally manufactured storage solutions; and smart energy control and management solutions.
Renewable energy generation and storage is a rapidly developing market with significant key growth opportunities for Reunert and its array of companies, says Reunert CEO Alan Dickson.
Terra Firma Solutions builds solar plants for customers and invests in its own plants to generate solar electricity, energy storage solutions developer and manufacturer BlueNova Energy supplies battery storage energy solutions, joint venture (JV) Lumika develops renewable energy solutions for commercial and industrial customers in Africa and CBi-Electric: Low Voltage develops product ranges that are used in green technology environments.
Reunert continues to invest in renewable energy and has been steadily building its resources and capacity after entering the renewable energy market in 2017 through the acquisition of a 62.5% stake in Terra Firma, which it had increased to 90% in 2020, while investing in building, owning and operating solar assets.
The solar photovoltaic (PV) business delivers start-to-end solutions, encompassing strategy development, project implementation, support and maintenance, as well as the building and ownership of renewable assets focusing on commercial-scale rooftop, parking and ground-mount solar PV systems.
Terra Firma CTO Mary Jervis says that after pivoting to turnkey solutions, the company focused on the lucrative commercial and industrial space where it now has 15% of market share.
The company offers an outright purchase option, wherein Terra Firma engineers, procures and constructs – the latter through its in-house construction team – projects for clients, who fund the projects and own the assets at completion.
Alternative to this is the BOO model, wherein Terra Firma funds, builds, owns and operates the project and, through a power purchase agreement (PPA), sells the energy generated on the system to the client at a discounted rate.
Currently, 70% of its clients prefer to own the assets and about 30% prefer to secure PPAs. Terra Firma currently owns about 25 MW of its own assets, with long-term PPAs attached, some up to 25 years.
“We have built over 250 MW of solar PV projects within South Africa, Namibia, Zimbabwe and Ghana. We also have projects planned for Malawi and Swaziland,” she told investors.
Earlier this year, Terra Firma completed construction on a 5.3 MW rooftop PV system – the largest on the continent – at Cornubia Mall, in KwaZulu-Natal.
Meanwhile, in May 2021, Reunert and A.P. Møller Capital established JV Lumika Renewables, which designs, builds, finances and owns a portfolio of cost-efficient, renewable energy solutions for commercial and industrial clients in selected African markets, further increasing Reunert’s exposure to the renewable energy market.
“The establishment of Lumika forms an integral part of, and provides impetus to, Reunert’s renewable energy strategy that is currently centred around our investments in Terra Firma Solutions and BlueNova,” Dickson says.
Terra Firma is primed to become the largest commercial and industrial sector renewable energy player in Africa, says Jervis, noting that the company and Lumika will target Africa for the expansion of its solar assets through a scalable and repeatable structure and remove the barriers of access to capital under the BOO model.
On June 3, Lumika Renewables secured its first project in Egypt with a signed agreement to develop, construct and provide electricity to Lafarge Egypt. The project, with a capacity of 50MWac, will be the largest commercial and industrial project on the continent, with the aim to start electrical production in the first quarter of 2024.
Meanwhile, in 2019, Reunert acquired a 51% stake in BlueNova, another step in Reunert’s renewable energy strategy, adding new technology and broadening access to new markets as the need for storage to stabilise the electricity grid increases in South Africa.
“BlueNova’s intelligent energy storage system continues to gain traction in both on- and off-grid applications. There is an expectation that this market will experience a rapid increase and bodes well for our storage aspirations,” says BlueNova CEO James Verster.
In 2021, the lithium-ion battery manufacturer also launched its new office and new intelligent energy storage systems production facility in Pretoria East to bolster production capacity.
The systems, which can be used as the primary source for grid-assist applications, peak shaving, load shifting and as backup applications, are efficient, reliable and smart containerised energy storage systems that can be scaled according to the requirements of the client.
The systems integrate seamlessly with most brands of inverters and monitoring, ensuring a problem-free compatibility environment and a further benefit can be gained by integrating the system with existing solar PV capacity to charge the unit during the day.
At the time of the launch of the new premises in September, Vester had commented that the company was at a tipping point, presenting a possible solution to assist in removing peak demand from South Africa’s strained national power grid.
He also alluded to hundreds of thousands of companies seeking solutions amid rising energy costs and increasing load-shedding.
BlueNova fully customises and programmes storage systems, targeting home storage systems and the bespoke channel market, working with Terra Firma in the commercial and industrial space.
Another large, attractive market for Reunert is energy demand management.
Within the automated energy control segment, Reunert’s circuit breaker business CBi-Electric: Low Voltage launched the Astute range, a residential solution that offers smart energy management devices and Internet of Things automated control of electrical loads, which reduces electricity waste and optimises the cost of energy storage.
The energy management solution for buildings enables electrical loads to be discretely monitored and switched to shape the overall building’s electricity use curve.
Reunert electrical engineering head Terry Lawrenson says that the range, which entered the market 18 months ago, has achieved significant growth since, with massive room to grow in South Africa.
He estimates that, with about 100-million distribute on boards in South Africa, each having about 10 circuit breakers, there could be in excess of one-billion plug points to target.
“There is no limit to the scalability of the market. It is really about adoption.”
CBi Electric: Low Voltage energy management systems executive Roger Hislop says that the integration of the pillars of generation, storage and energy management is significant.
“Energy management is now becoming the most important issue for large consumers,” he said, pointing out that many of the company’s clients are reporting increasingly unaffordable energy costs of about 20% to 30% of their underlying profit, with increased interest around energy reduction and energy management.
There is a need to understand consumption, he says, as it is only by reducing consumption that the challenges can be mitigated.
Automation of energy and load management and monitoring improvement will contribute to energy reduction, savings and regulation and policy compliance.