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FIFI PETERS: It will probably come as no surprise that Sun City is planning to maximise and take advantage of its position there under the sun by planning to build a huge solar farm that it says could generate power that is enough not only for itself, but that could also help light up the surrounding villages. That’s according to weekend media reports.
I’ve got Brett Hoppé, the general manager of Sun City Resorts, on the line for more. Brett, thanks so much for your time. I saw ‘huge’ was the word used in terms of describing your plans, and I asked myself what we mean by ‘huge’. How huge is huge in terms of the solar farm that you’re thinking about?
BRETT HOPPÉ: Well, good evening, Fifi. I hope you’re well, and thanks for having us on.
Obviously there are two phases to this. One, we’re about to complete a project that will be finished by the end of July, which will take care of about 14% of our demand through solar.
But the second phase of that – and this is really a precursor once we’ve established the exact yields and the outputs thereof – is to embark on a very, very large-scale project which will in essence potentially take some [power] off the grid, as well as allowing us to redistribute power back into the grid. In contemplation of this we would be looking at our needs at peak yield, plus about 20 to 30%, if not more.
We’re fairly blessed at Sun City by two things. Obviously ‘sun’ is indicative and appropriate. The North West province is the second-highest yielding province in terms of solar potential, so we’re very blessed in that regard.
But I think the other part depends on where the legislation lands from a wheeling perspective in terms of being able to wheel and [deliver] power back into the grid.
FIFI PETERS: I was at Sun City over the weekend, and I know [the rest of] South Africa continued to experience load shedding. I didn’t experience load shedding while I was there, and so it must be because of the intervention measures that you as a company, like all companies, have put in place to ensure that your customers are not disadvantaged by the power cuts. How much is all of that costing you?
BRETT HOPPÉ: Well, we have 18 generators at Sun City of various forms and sorts and sizes. Obviously we have scheduled load curtailment, as does everybody, and we bring in that generation in order to support uninterrupted power to our conferences and obviously our customers.
Year to date through the first five months we’re looking at about R2.7 million worth of diesel expenditure.
So it’s a significant drain I think on all businesses in South Africa. We’ve seen it in a lot of companies that have published results. The real impacts are significant.
FIFI PETERS: Significant indeed. But back to phase one of the project to ramp up the resilience of Sun City from load shedding or load curtailment – which is what you’re experiencing – how much are you spending on the solar panel ramp up in its entirety?
BRETT HOPPÉ: We’re spending R16 million, which is a relatively small amount. The privilege that we have with this particular project is that the generation is concurrent with the demand cycle.
So ordinarily a project of this size would require quite a significant amount of storage, and once you start requiring storage obviously the costs rise incrementally; whereas with our production cycle in this aspect – the Convention Centre, the Valley of Waves and surrounds – that demand is met by the daily production.
So it’s quite fortunate that in this instance we really don’t have to, at this point in time, invest in storage. So we feed it back into our own grids and consume it immediately.
FIFI PETERS: That is what many talk about in terms of going the renewable route fully, saying that it’s not always possible, just given the intermittent nature of the source. The sun doesn’t always shine, the wind doesn’t always blow. So what you are saying is that right now that is not a factor for you to consider – the intermittent risks and the investments in storage of your power?
BRETT HOPPÉ: Correct. At this point in time, no. When we get to the full extent of the large-scale project, obviously that storage becomes a significant contemplation and then incrementally the cost increases.
But in this instance what’s very important is to get the theory and the practical aligned.
We’ve done all the theoretical evaluations in terms of the outputs. We really wanted in this phase of the project to get a stick in the ground to say ‘Right, this is the actual production year round’, so once we’ve got 12 months’ worth of data, of real production data, we’ll be in a far better position to make informed decisions with regard to the large-scale project.
FIFI PETERS: As I was reading the article at the weekend, I thought that this probably would have happened anyway notwithstanding the electricity challenges in South Africa, given the fact that climate risks have been with us for a very long time – although more recently the world is listening more closely, given the climate-related disasters that we have seen unfold.
Would you say that’s the case – that this was always in the pipeline?
BRETT HOPPÉ: I would most certainly say, from a Sun International and a Sun City perspective, our focus has been specifically around renewables, the reduction of carbon emissions, the reduction of output waste to landfill, etc.
So this would’ve happened in any event, irrespective of what was occurring in the country with regard to the power situation.
If you look at the estimated reduction in emissions just by this, we’re talking about 2 500 tonnes worth of reduction of CO2 emissions, just this particular initiative, and it’s something we are really, really focused on.
Sun City holds an ISO 14001 [certification], one of the very few hospitality establishments in South Africa to do so. If you look at the Nedbank Golf Challenge later in the year, we are seeking to have that event as an ISO-certified event.
Now, if you look at sustainability and the greater spectrum of sustainability, it’s not only around renewables and waste management, but also around sustainability, job creation, in the entire context of a sustainable business.
So that’s really where we are focused at Sun City, and we have a huge number of other initiatives driving into this.
But in essence, to answer your question, we would certainly have gone this route irrespective of where we sit in the present day with the significant challenges that the country faces.
FIFI PETERS: Just a question for people who like visiting Sun City but may not be able to afford to visit right now – given that inflation is still a problem, interest rates have gone up, and those are eating into the cost-of-living crisis – will your alternative power sources have any impact on pricing in either direction?
BRETT HOPPÉ: I think in the long term most certainly. It will obviously reduce our input costs. Consequently, we’ll be able to transfer the benefits of that, over time, back to the consumer.
I think that’s a pretty exciting prospect because not only then are we reducing carbon emissions, reducing our footprint, but we are also able to pass benefits on to the customer. As you’ve seen, many corporates across the country have released results, and have had significant profitability impairment as a consequence of diesel usage. And certainly smaller businesses are suffering significantly.
I think over time, if we’re able to get this right, we can address the input cost. Then we would be able to transfer the benefits of such back to our consumer.
FIFI PETERS: Just lastly Brett, when do you think you will be in a position to update the market on the processing around the larger project, the sun farm? How soon are you expecting or hoping to receive feedback?
BRETT HOPPÉ: We’ve done the initial contemplation, looking at the feasibility. I think the big challenge right now is to look at the multiple funding mechanisms available, and that’s a highly competitive scenario in terms of pre-funding many institutions. That’s the one challenge.
I think the second challenge is the technology is advancing so quickly, particularly in terms of panels, and in fact storage, that one needs to be very, very careful that you’re not locked into something where you’re going to be burdened with outdated technology.
So we’re being very careful. I think by December this year we will be in a position to publish the full critical path in respect of how we’re going to proceed with the large scale [phase].
Obviously, there are some legislative understandings that still remain a little grey. I don’t think, from a wheeling arrangement perspective and input back into the grid, that those arrangements have been entirely crystallised from a legislative perspective. So that’s probably a challenge as well, pending that being concluded.
But our target date is December.
FIFI PETERS: Well, we look forward to that update then in December. Brett Hoppé is the general manager at Sun City Resort.