[TOP STORY] Insights on Karoo wind energy and grid expansion

0:00Money web now on the money. This podcast is brought to you by Stand the Bassett Management. Invest in more global opportunities through their partnership with JP Morgan asset management. I'm taking with Mark Tenton, CEO of RedCAP Energy. Mark, I appreciate the time. I want to delve into some of your experiences around wind power in the broader Kucher region. But in a recent note, you had asked Press release who talked around sort of the region being the country's key, well, one of the country's key wind corridors up driven through the area. It is windy. It is full of wind turbines. It really is a significant asset for our country and our economy. Yeah, that is Simon. I mean, if you obviously we all know that the windy city gets its name from something, and that's the wind. And anyone who's been fortunate enough to holiday in St Francis in December knows that the wind is almost always, always blowing. So it is one of the best areas in South Africa in terms of the wind resource.

1:02But unfortunately, as is often the case, the resource requires wires to export the resource and it had finite wires. That was the problem you ran into. You were looking to do a project in the area. And the problem was quite simple. You could build it. But then as you say, no good infrastructure, no transmission infrastructure, you couldn't connect to the grid. That was the challenge you then had to solve. Correct. So Simon, when we got into the area, Escom was planning its nuclear expansions. The plan TASPENT, which is now back in planning again. So when we got in there, which was in 2009, Escom had planned a significant grid infrastructure to support exporting power from TASPENT. So we had planned that we could use the infrastructure that was there and then we would expand as the TASPENT infrastructure came online. That never happened for various reasons I won't go into.

2:03So we were always engaging with Escom on what their plans were. We looked to work with them to do... In fact, you get 400 KV lines and 132 KV lines. So it's a big line and a bigger line. For a listener, the 400 KV is generally what you dissociate with those rather large pylons and the 132... This is not as big. But we then realized Escom was going to be unable to progress its plans. So then we had to come up with a plan B. Escom had a 132 KV line running from effectively the Titsikama River area all the way to Port Elizabeth. And we then had to plan to develop a line parallel to the Escom line. And that meant we had to... Even though we followed closely, we had to get all the land agreements in place, get the permits and ultimately get a built. And that's a key part of it. You make the point that, yeah, you might be running extra,

3:03but you've got to get land permissions. And I think the press really said it's what are 116 kilometers, which isn't a lot, but it is when you have to go to, I don't know, dozens and dozens of landowners and engage them. But also just what infrastructure is currently there. It is a massive project. I've looked at it at some of these 132 KV lines before and it's like, I don't know how it got there. Yeah, so to put it in perspective, so Escom has launched with government support. Something called the ITP. And then that's a program to build, to get the private sector to build finance and operate transmission lines. And Escom's plan is to build out 14,000 kilometers of line. That's what we have in our transmission development plan. And 1,000 of that they are putting out to the ITP, which it seems like will be possible off into six discrete projects. So if you look at the imporful line of 116, and the six discrete that work out to the 1,000,

4:06I won't do the math now because I used to be an engineer, but I'm no longer good with numbers. The 116 is huge. And there was 87 parcels of land that we had to cross. So that's any seven agreements you have to enter into with quite a diverse range of owners. Yeah, 100%. Owners and all of their, it is synchrocies. My understanding is it is now done. And you've now got the line. You've got the power project. In fact, it is wheeling energy to sassal and a liquid, the second operations. It is, you know, it'd been a long decade, but completed. Yeah, correct. So we've, well, we red cap energy developed the project and we did it ultimately in partnership with the Italian utility, an L green power. So once we had finalized the development, an L took it over and they did that final, very difficult stretch of getting across the finished line to finally build it and get it operational,

5:06which they did recently. And as you say, they're wheeling the power to sassal and a liquid. I mean, the reality is that sassal and liquid buy the power, but clearly the power has been generated in starting in the coca region, going to fall Elizabeth and realistically, that's where the power is being consumed. But the commercial arrangement is ill-acquired and sassal obviously buying. Yeah. The whole wheeling in fact, it's a separate conversation. Wheeling in of itself is a fascinating conversation. We'd believe it. Mark Tentany, CEO, red cap energy. Appreciate the time. This podcast is brought to you by Stand the Bassett Management. Invest in more global opportunities through their partnership with JP Morgan Asset Management.