Welcome to the “Non-profit IPP” Page 

Project Name: Non-profit IPP (NPIPP)

Programme: This project is part of the Design a Difference programme. Please visit that page to learn more about how this project is run. 

Design Question: How might we use the “Independent Power Producer” (IPP) model to bring the benefits of cheaper, renewable energy to non-governmental organisations that care for the under-served?

Background: In South Africa, “Independent Power Producers” (IPPs) are companies that are not owned by the government and that produce electricity as their business. There are two broad categories of IPPs: the first is the utility scale IPP sector. These companies own and operate large plants that sell their electricity produced to the national grid, usually through the REIPPP mechanism. The second category, and the one of interest to us here, is the “private” IPP sector which operates in the private “Commercial and Industrial” space. In this category, private companies (IPPs)  build renewable energy plants (usually solar PV systems) on the rooftops or properties of large companies (factories, warehouses, schools, large residential complexes). These IPPs then sell this power not to the grid, but to the large company that owns the building or land on which the plant is built (called the “off-taker”). The off-taker benefits by reducing their cost of electricity and increasingly the sustainability of their energy consumption.The IPPs benefit by selling electricity at a profit. This is typically a 10-15 year arrangement, during which the off-taker buys the electricity and the IPP operates and maintains the renewable energy system.

This concept has brought the much-needed benefits of cheaper renewable energy to many South African businesses. However, non-governmental organisations that care for the under-served and also own property and buildings have unfortunately not been able to benefit from this concept. Children’s Homes, Frail Care facilities, and Shelters for women have been unable to benefit from this model  because they typically have a difficult time proving that they are reliable off-takers (i.e. that they can afford to consistently pay for the electricity for the 10-15 year period required by this concept). Given their risk profile, investors (private IPPs) are understandably reluctant to take them on as clients. 

Of course, in some cases these NGOs have been able to secure donations to build these systems, particularly small solar PV installations. In these limited instances, the installed renewable energy systems are often miss-sized, their benefits overstated, and even sometimes poorly installed. However, the biggest challenge with these systems is that there is almost never a plan for the “Operation and Maintenance” of the system. The result is that the systems often under-perform, dramatically reducing the usefulness of the system and rendering the initial investment (donation) much less effective. In some cases, the lack of an O&M plan leads to the system becoming a safety hazard. 

The aim of this project is to explore whether the IPP model, which neatly incorporates O&M solutions, can be used to bring the benefits (costs and sustainability) to NGOs caring for under-served people.

Scalability: We believe that if we’re able to find a model that makes it possible for NGOs to benefit from renewable energy solutions, many, many people could benefit in South Africa (a quick example: if we’re able to identify the key characteristics that makes successful projects – such as electricity bill size, load profile and security – a simplified procedure can be used to quickly assess the suitability of off-takers. This would reduce normally expensive professional services significantly).

Current status: We have secured funding from the Alstom foundation for a pilot project. Together with Zero Point Energy solution, who are providing their services at cost, we will be building a small solar PV system for a children’s home called “CHANCE Children’s Home.”

The project is currently split into two phases: Phase 1 is the design and build of the system, and Phase 2 is the design and implementation of the O&M plan and governance structure. We are currently working on Phase 1, and will kick off Phase 2 by the start of April. 

Get Involved: We will soon be putting up a list of tasks and possible volunteer options on this page.

Community Partner:  For the pilot project: CHANCE Children’sHome. 

Project Team: The current Project Manager for this project is Irshaad Vawda. We will shortly be putting up a list of people also working on the project. 

Cadence/speed: The current cadence/speed of this project varies from very slow to quick, depending on the phase in which the project is in. This is primarily due to the resources available for the project at this point (not necessarily solved by “more-hands” – see Brookes law). Please bear this in mind when getting involved. We will write more about this shortly.

Design Process: This page, coming shortly, will document the design process being employed on the project.

Task List: Previous and next tasks on the project (mapped to the Design Process).

Project Notebook: As project manager, I (Irshaad) am passionate about writing “diary type” entries for projects. On this page, we’ll be adding these notes soon.  (link to come)

Resource List: A collection of readings and other material used in the design process (different to physical resources on the project – we’ll be adding another page for that).