TIDMNCCL
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
Liberum Capital Limited Scott Mathieson, Edward Thomas, +44 (0) 20 3100
NOMAD & Joint Broker Kane Collings 2000
Novum Securities
Limited +44 (0) 20 7399
Joint Broker Colin Rowbury 9427
Pimlico Advisory
Ltd +44 (0) 777 56 55
Investor Relations Elizabeth Johnson 927
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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END
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