Solar Feasibility Study Update
29/09/2022 07:00
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RNS Number : 0590B Ncondezi Energy Limited 29 September 2022
News Release
Solar Feasibility Study Update
29 September 2022: Ncondezi Energy Limited ("Ncondezi" or the "Company")
(AIM:NCCL) is pleased to provide an update on its 300MW solar photovoltaic
("PV") and Battery Energy Storage System ("BESS") project ("the Solar
Project"):
· Solar Project feasibility study for up to 300MW solar PV power
plant plus BESS (the "Study") on track for completion by the end of October
2022
· Positive initial results including:
o Solar resource of 1,980kWh/m(2) (Global Horizontal Irradiation) confirms
excellent irradiation results
o Energy yield over 2,000kWh/kWp confirms top tier performance potential
o Transmission integration confirms grid capacity on existing infrastructure
o No red flags identified on target plant sites
o No red flags identified on Environmental and Social Impact ("ESIA")
assessment review
o Development programme indicates first power target in 2024 is achievable
Ncondezi Chief Executive Officer, Hanno Pengilly said: "Initial results from
the Solar Project Study are very positive, confirming the project's excellent
location for solar generation with no red flags identified.
With completion of the Feasibility Study on track for the end of October 2022
the next step will be to finalise the Solar Project concept, design and
financial model. These will confirm the target tariff offer for potential
offtaker partners. Initial discussions with multiple potential offtaker
partners have commenced and we believe we will be able to offer an attractive
energy solution through speed of execution and competitive tariff pricing.
By leveraging the existing advanced stage studies from our other project, we
have fast tracked development and have an achievable target to deliver power
on the grid in 2024.To deliver on this timetable the Solar Project would look
for confirmation of indicative offtake interest in Q1 2023 and, subject to
funding and finalisation of offtake arrangement, start construction as early
as Q3 2023."
Overview of the Solar Project
The Solar Project will be located within the Ncondezi mining concession 5967C
which covers over 25,000 hectares in the districts of Moatize and Chiuta in
the Tete Province. This is large enough for solar PV generation potential of
over 5,000MW.
It is the intention that the Solar Project will connect to the Mozambique grid
with target power off-takers in Mozambique and the Southern African Power Pool
(SAPP).
The FS Study will take a modular design approach to the Solar Project
targeting 300MW with the flexibility to scale in 30MW to 100MW increments.
The Solar Project is uniquely positioned to take advantage of the existing
advanced development work completed for the Ncondezi 300MW thermal coal power
plant that can be easily transitioned to the Solar Project. The Company
estimates that in addition to reducing development costs this has the
potential to accelerate the development programme with first power on the grid
as early as 2024, subject to funding and finalisation of power offtake
agreements. The Company believes this will reduce the development timetable by
6 to 12 months.
Pre-feasibility studies completed earlier in the year confirm significant
potential value to shareholders with an estimated pre-money NPV between US$60m
and US$65m, and fully diluted cash flows to Ncondezi of between US$130m and
US$180m over a 25 year period for a 300MW plant. The Study will further refine
these figures, taking into account final transmission solution and scaling
strategy.
Solar FS Initial Results
Site Location
3 preferred site locations were investigated for their suitability for the
Solar Project, all with similar climate conditions and a generation potential
of c.500MW each. Site visits were completed earlier this month by the
Company's lead Study consultant, WSP Group Africa (Pty) Ltd ("WSP") and no red
flags were identified on any of the sites. A preferred site has been
identified and will be confirmed at the completion of the Study.
Solar Resource Assessment
Four weather datasets were obtained and reviewed for the Solar Project to
confirm the solar energy that can be utilised by the solar modules. To ensure
the solar data used was representative, a minimum of ten years of historical
data was used to reduce any risks relating to inter-annual variation in the
solar resource. The critical parameter for solar resource assessment is the
Global Horizontal Irradiance ("GHI"), with the Solar Project achieving an
average annual GHI of 1,980kWh/m(2) which is considered excellent for the
region.
Energy Yield Assessment
Solar Project GHI results were used with system design assumptions to estimate
the energy output of the project, achieving a specific yield of over
2,000kWh/kWp and performance ratio over 80%. These results are very positive,
being in line with some of the most competitive grid scale projects in South
Africa. It is worth noting that the specific yield and performance ratio do
not vary considerably as the Solar Project is scaled to 300MW, although the
project will benefit from economies of scale in the overall capex.
Grid Connection
A full generation integration study was launched in parallel to the main Study
to determine the optimal transmission line connection into the Mozambican
grid. Various integration studies have been produced for the coal power
project, and formed the basis for the Solar Project assessment. Working with
the relevant local authorities, 6 potential solutions are being investigated
taking into account potential scaling of the project, available or under
construction transmission infrastructure and planned generation plants in the
region. Initial results confirm that there is grid capacity for the Solar
Project and more than one feasible evacuation solution. The next phase of the
study will look to confirm the preferred transmission solution which optimises
project economics, network capacity and timing.
ESIA Red Flag Review
WSP conducted a red flag review of the Company's existing ESIA and supporting
documentation completed on the Company's coal power project and mine, with no
major issues identified. As the Solar Project is planned to be installed
within the coal project's concession area, the existing ESIA, which were
approved by the Mozambican authorities, can be utilised and updated to meet
the latest requirements local and international standards. This is expected to
save significant cost and time for the Solar Project.
Enquiries
For further information please visit www.ncondezienergy.com or contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Scott Mathieson, Edward Thomas, Kane Collings +44 (0) 20 3100 2000
Liberum Capital Limited
NOMAD & Joint Broker
Novum Securities Limited Colin Rowbury +44 (0) 20 7399 9427
Joint Broker
Elizabeth Johnson +44 (0) 777 56 55 927
Pimlico Advisory Ltd
Investor Relations
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon publication of this
Announcement and such information is now considered to be in the public
domain. The person who arranged for the release of this announcement on behalf
of the Company was Hanno Pengilly.
About Ncondezi Energy
Ncondezi is an African power development company focused on the development of
renewable and baseload energy solutions at its concession located in the Tete
Province, northern Mozambique.
The Company is focused on providing reliable and affordable energy to
Mozambique to meet growing energy demands. Our projects support Mozambique's
energy strategy of universal electricity access by 2030. According to the
World Bank, only 30% of the Mozambican population had access to energy in
2017. Our projects would provide reliable and available power helping to close
the infrastructure gap of the region and serving as a catalyst for economic
development.
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