What was the motivation for the investment?
The motivation behind the investment was to build a quality affordable school in the Eastern Cape Province, which is one of the poorest provinces in the country and has low educational performance. The school site acquired was a well-placed location for an affordable independent school. The opportunity to partner with the school operator, who has managed a successful high performing school in King Williams Town for many years, provided another reason, and the success of this investment could also lead to the building of more schools in the Eastern Cape. Furthermore, the investment is expected to achieve attractive returns that are above the School Fund’s hurdle rate.
The logic for investment in the solar solution for St Christophers school was initiated because electricity was a particularly challenging issue, as there was no existing grid connection available. The time and the cost of the connection was a challenge. The management team investigated the installation of a transformer at nearly ZAR1mn (~US$50k), and along with the inconsistent power supply from Eskom and the reality of continuously increasing cost of power, they decided the best option was to go off-grid. The system installed allows the school to be 100% off-grid with no dependency on Eskom power at all.
How did you incorporate a climate strategy into the investment?
During the due diligence process of an investment, environmental, social and governance (ESG) issues are incorporated and analysed. The purpose is to identify any risks to be mitigated or opportunities to enhance the ESG impact and performance of the investment. When building a school, green building initiatives are explored to see whether it would be viable to incorporate. When it became apparent that a grid connection would be costly, with uncertain availability of power, it was decided to rather install the solar power system.
In assessing the water situation while planning the school, the decision was taken to install 19 water tanks that can hold 55 000 litres of water, allowing the school to be some 50% off the municipal water grid.
What benefits have you seen / do you expect to see from the climate conscious approach?
Considering future power cost uncertainty, load shedding and the cost of putting up the substation required for grid power, the solar solution was the preferable option, enabling the production of sufficient energy to power the school at low cost. Cost saving was also achieved with the off-grid water solution.
Although these have not been calculated yet, the solar option is also expected to lead to lower carbon emissions.
What were the challenges faced with the approach e.g. increased costs, resistance from stakeholders etc?
1. With a 3-phase system, it was thought that the school could use industrial ovens and fryers. This caused a number of system overloads, and the issue was resolved by swapping some electric kitchen appliances for gas ones;
2. Getting the balance right was important. It was necessary to find the right time delay for the generator to “kick in”, so that it was neither too early, resulting in too much fuel usage, nor too late - causing an overload and shutting down the system;
3. Everyone involved was on board with the plan and there was no resistance from stakeholders;
4. Education and awareness around electricity usage among staff, teachers and learners on the use of the solar system was also important;
5. There is so much wasted power when it is not monitored and improved upon with more efficient devices. Monitoring usage made it possible to identify where power usage was inefficient and could be improved upon, especially lighting in classrooms and around campus, by installing LED lights from the onset of construction.
What tools or resources did you find useful or helpful?
1) An online monitoring system was installed at the King Williams Town school, so that hourly usage patterns could be established. These patterns were very useful when designing the solar system for the Kidd’s Beach School;
2) The professional team used to install the system provided a lot of insight and advised the setup of a modular installation.