Transmission Route Approved
13/01/2023 07:00
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RNS Number : 6017M Ncondezi Energy Limited 13 January 2023
News Release
Transmission Route Approved
13 January 2023: 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") Transmission Integration Study ("Tx Study"):
Highlights
· Tx Study to connect the Solar Project into the grid has been
approved by Electricidade de Moçambique ("EDM")
· Tx Study confirms technical viability to evacuate up to 300MW
into the Mozambican grid and the wider southern African region
· Tx Study confirms optimal technical solution is via a two phased
approach
o 1st phase targets a lower cost solution utilising existing infrastructure
for first 100MW
o 2nd phase targets planned infrastructure and will transfer balance of
200MW whilst also improving voltage control and stability with lower system
losses in the area
· Tx Study includes 2 connection options for phased development of
the Solar Project up to 300MW
· EDM's approval allows the Company to engage transmission
infrastructure owners to agree access, and represents a material de-risking
step for potential power off takers
Ncondezi Chief Executive Officer, Hanno Pengilly said: "Approval of the Solar
Project Transmission Integration Study represents a key development milestone
in de-risking the project for potential power off takers and investors. We
have an approved transmission evacuation technical solution that supports the
project at various sizes up to 300MW, optimised in phases to reduce upfront
capex, particularly for the first 100MW.
Following the approval, the Company is initiating discussions with
transmission infrastructure owners to seek to agree access. We are confident
access will be supported as we believe the Solar Project will provide
significant transmission benefits including greater energy security, voltage
control and stability. We are targeting an update on this by the end of Q1
2023.
The Solar Project remains regionally strategic given its location within the
Mozambique northern grid and proximity to critical cross border
interconnectors including South Africa, Zimbabwe and, in the coming years,
Malawi. The Company has looked to capitalise on this by accelerating
development work to best position the Solar Project with potential power off
takers whose off take represents the next crucial milestone in unlocking the
project's potential.
Given the success in delivering critical milestones over the last 6 months,
including the feasibility study and DUAT, the Company is also assessing other
potential workstreams that could be fast tracked to maintain the Solar
Project's competitive position. More information on this will be provided when
the assessment has been completed."
Transmission Study Overview
A full generation integration study has been completed to determine the
optimal transmission line connection into the Mozambican grid.
Working with the relevant local authorities, 6 potential solutions were
investigated taking into account potential scaling of the project, available
or under construction transmission infrastructure and planned generation
plants in the region. Results confirm there is grid capacity for the Solar
Project and more than one feasible evacuation solution. The Solar Project is
also suited to feed power into the Mozambican northern grid as well as
participate in cross border power trading within the Southern African Power
Pool ("SAPP").
Two preferred connection solutions have been identified covering grid
connection distances between 20kms and 40kms. Both options have been optimised
to take into account the proposed phased approach to generation expansion,
which also provides a capex benefit by spreading the cost of connection over
the various phases. The first phase is expected to handle initial power
generation up to 100MW whilst keeping capex relatively low through use of
existing infrastructure. The second phase will handle the balance of the 200MW
generation capacity and is expected to benefit the wider region with
additional voltage and stability control, whilst also reducing system losses
due to its location which is closer to load demand centres.
All new equipment will be required to conform with standard EDM equipment
ratings and will comply with relevant Grid Codes.
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 energy solutions at its concession located in the Tete Province,
northern Mozambique.
The Company is focused on developing its 300MW solar PV project with battery
energy storage within its 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).
On 31 October 2022, the Company announced results from its final draft Solar
Project feasibility study ("FS") for up to 300MW solar PV power plant plus
BESS. The FS took a modular design approach to the Solar Project targeting a
total 300MW but assessing in increments of 30MW, 60MW, 100MW, 200MW and 300MW.
Results from the FS confirmed a technically viable project with attractive
parameters including:
· No fatal flaws identified on preferred site location
· Strong solar resource of 1,980kWh/m2 (Global Horizontal
Irradiation)
· High energy yield of over 2,000kWh/kWp confirms top tier
performance potential
· Standardised tier 1 solar PV specifications selected reducing
capex and improving performance
· Inclusion of BESS provides grid ancillary support and ability to
optimise dispatch profile
· No red flags identified on Environmental and Social Impact
Assessment ("ESIA") review
The FS also provided capex and opex estimates for the various solar PV plant
sizes which included latest available data from recent projects in Mozambique
and the region. Capex and opex figures are estimated to fall within the low to
medium range for solar PV projects globally, and this information was used to
update the Solar Project's financial model and develop a commercially
attractive power tariff for presentation to potential power off takers.
On 21 November 2022, the Company announced updated valuation forecasts for
100MW phases up to 300MW, confirming the Solar Project value potential to
shareholders and potential investors.
On 9 January 2023, the Company announced receipt of an updated land use
agreement, or Direito do Uso e Aproveitamento da Terra ("DUAT") in Mozambique,
from the Mozambican Government granting exclusive use for solar power plant
operations at its preferred site.
The Solar Project is aligned with the Mozambiquan Government's objective to
become a champion for energy transition impacting all of Southern Africa.
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