We were honored to interview Taru Mandagombe, Vice President Middle East and Africa at Schneider Electric in South Africa during the interesting Africa Energy Indaba Conference. Part of what to expect includes:
- Energy Background
- Micro-Grids importance
- Scaling up Micro-Grids
- Fixing Default Rates
- Size of Power Projects
- Micro-Grids future and advice to young people
Tony: Welcome everyone. I am here at Africa Energy Indaba. This is one of the leading energy events in the continent and it is here we come to meet the leading players in the industry and find out more about the industry. Today I am here with an interesting gentleman from Schneider Electric. His name is Taru Madangombe who is the Vice President for Power and Grid for Middle East and Africa. I will not tell you more for now because Taru is sitting here with me. So, Taru, a number of people following Renewables in Africa may not know you and the whole point is to get them to get familiar with the job you are doing not only at Schneider but also before. If you can take two or three minutes to properly introduce yourself, that would be great!
Taru: Thank you Tony. As you mentioned, Taru Mandangombe is my name. I have been involved in the power and energy sector for almost 20 years playing different roles in the space. I started by being involved in the end user side, then management and consulting, engineering and EPC until I moved up the value chain towards being a technology provider which is where I am when I joined Schneider seven years ago. The renewable energy space was the initial area of interest for me. I did a lot of studies and my Master’s in renewable energy that formed the baseline for my interest in the space.
Tony: That’s great. What that means is, you have an all-round approach of the sector across the continent which is good for comparison purposes. I wanted to talk to you about “Micro Grids” which is something I think is dear to your heart. Why do you think they are important?
Taru: There are a couple of reasons. Where we are right now, the number has actually gone up, we are seven to eight hundred million people in the continent who do not have access to electricity. One of the challenges you get to hear from the utilities and the players in the industry is that we do not have enough transmission grid capability to provide electricity to those in the remote an rural areas. They will tell you that it becomes less cost effective to connect to the rural areas and for that reason we realise that we need some alternative solutions. We say that provision of electricity should be a basic human right. We believe that everyone needs to have access. I think Micro Grids are some of the solutions that we need to incorporate to make sure that those who cannot have access to basic lighting can have power in their houses. You will find that the trend is not only becoming important only for the remote areas but also in the cities with the numerous load shedding going on with the grid and the power shortages going on across the continent. I know South Africa is experiencing this in recent years but its also across the continent. To help build that grid reliability and resilience we need that alternative forms of power provision and we believe that micro grids are the solution. Also, in line with the COP 27, the resolution that we need to drive sustainability and reduce greenhouse gas emissions, from the micro gid perspective especially if you were having the micro gird systems it helps cut down the greenhouse gas emissions on the continent.
Tony: Excellent. Talking about load shedding, I definitely know something about that. I experienced it when I arrived here. You have made a very interesting point about micro grids. The population growth still supersedes electrification rate. As you have mentioned that microgrids can be considered as a part of the solution, how can we scale it up to tackle the problem?
Taru: The micro grid has been there for over 30 years and as much as there have been some growth, it is yet to be at the level where it should be. From the investment point, you need the investment to be able to put that capital down there right from the beginning and also make sure that your solution is bankable. That is where we are having a lot of challenges with projects. Private investors are finding it difficult to find viable projects. Why are a lot of these projects not bankable? This is because there are a lot of risks associated with some of the technology that has been deployed, there is less trust in terms of the durability of its operations and maintenance. You will also find that a lot of investors would rather stick to the tried and tested international players thereby limiting room for the small and localized developers in the country and regions. Part of that is because a lot of those solutions have not been thought through, end to end. When you are developing these types of projects you need to look at it right through form physicality, design, planning and operation and maintenance. We are looking at microgrids as a stand-alone system and for that to happen, there has to be some evolution in terms of software that we put on board in terms of this technology to make sure that it helps to make the system much more robust, bankable and trustworthy because you need data to be able to make a financial model. Another challenge is that in a lot of countries, you will find that there is an element of reluctance from some utilities. We need to have a combined will from the political, utilities and private sector to mitigate this as a common goal towards a social economic effect.
Tony: We are talking about the last mile distribution for example the home solar system point of view and one of the challenges faced here is the default rates ranging between 10 to 60 percent. Isn’t the elephant in the room not the disposable income of the majority of the potential customers and if it is the case, how do we fix that?
Taru: From my own personal opinion, you need to have a bold drive from the government. I have seen it work in India, where they have put some bold incentive plans. This attracts investors because investors look at their return on investment. As an investor, you also need to come in thinking about what other community-based services can benefit from the provision of power. If it is Agriculture, can it support irrigation to support food production?
Tony: So, the captive power element is very important. I have a question in regard to Schneider. What is your actual contribution to the whole equation?
Taru: We have been playing through various stages of the microgrid value chain in the last 10 years ago. We are offering energy as a service. We do the whole financing, the technology provision and the maintenance. A typical example is the JFK airport terminal one. We are working on a project of about 12Megawatt. When there is load shedding, we can provide 100% of the power required for the terminal. In that project we were working with the Kalal Group in the financing perspective. We have an end-to-end approach when it comes to microgrid solutions.
Tony: You have talked about JFK 12MW, Chad 4MW. What is the lowest you can do?
Taru: We have done some 68Kw systems. We 3Kw systems which is enough to power your TV, fridge, Wi-Fi and so on. We can then scale it up to as we have said, the size of JFK 12MW. It is scalable from residential all the way to commercial requirements.
Tony: What is the autonomy of those systems?
Taru: JFK for example, is 100%. We obviously have storage capabilities. We as Schneider have relationships with battery manufacturers.
Tony: Are those microgrids fully renewable or there is an element of fossil fuel?
Taru: For example, the one in JFK is fully renewable. We have done some in Africa where we had to strike some balance between solar and some diesel.
Tony: My last question for you. Compared to where we are right now, where do you see microgrids by 2030? What is your projection?
Taru: Five years ago I remember going through some PWC report that mentioned that in 2013 and 2017, we grew almost 300% on the microgrid perspective. When I look at where we are, just to give you an example of what has transpired in South Africa for example, the regulations are starting to become much more favorable for the microgrid systems. This is creating a conducive environment for a lot of players to get involved. There are still some challenges but at least that’s a beginning. When I look at these projections, I think in the next five years we are going to grow at least 10 times from where we are now. There is an opportunity as long as we have the right deployment mechanisms, we deploy the right solutions and also make sure that we are still getting the right support from the policy makers.
Tony: I said that was the last question but I think I lied. This is the last question. I clearly can see that you are an ardent supporter of clean energy. I have a question that I get a lot from young people. Can we make money from microgrids?
Taru: You are putting me on the spot here. First of all, as Schneider, the fundamentals that drive us is that “Access to energy is a fundamental right for every human being.” How much money is enough money? When it comes to energy access, the priority is the enhancement of the socioeconomic aspect of the people. If you come in and say you want to come in the microgrid business and say that you want to come in to make money, I am not saying that you cannot, in fact you can. It depends on who your off-takers are. So, what I am saying is that it is a balance between the socioeconomic aspect and making money.
Tony: That is a great answer. Taru thank you very much for your time. I have learnt a lot and I am actually quite optimistic about the trajectory of microgrids.
Taru: Thank you Tony. It is a pleasure.
Tony: Thank you.