Sasol Climate Change Report 2022 - Book - Page 25
INTRODUCTION
RISKS AND OPPORTUNITIES
OUR FUTURE SASOL STRATEGY
GOVERNANCE
DATA AND ASSURANCE
DECARBONISING OUR OPERATIONS (CONTINUED)
Progressing our emission-reduction roadmaps (continued)
REDUCE, TRANSFORM and SHIFT
Renewable energy
Sasol recognises the need to invest in large-scale renewable
energy initiatives to deliver on our GHG targets. This is
particularly significant in South Africa where electricity
generation is both unreliable and carbon intensive, and where
we have our highly energy-intensive operations. Secunda,
requires roughly 600 MW of grid-procured electricity annually.
Although it is not yet feasible for Sasol to fully replace our own
generation and grid-based electricity with renewable energy
sources – due to the intermittency of renewable power and the
need to ensure stability of our plant – we expect this situation
to change once battery storage becomes cost-effective at scale.
In the interim, we have committed to an ambitious REIP for Sasol
Energy that will significantly ramp up our portfolio of wind and
solar projects in South Africa. This will reduce our scope 2
emissions by replacing electricity imports and mitigating our
scope 1 emissions by reducing our self-generation of electricity
from coal.
We recently partnered with Air Liquide to jointly decarbonise
specific units on our Secunda site and are pursuing various
projects with three short-listed IPPs. There has been strong interest
in the programme, with projects in excess of our 600 MW target
in ‘preferred bidder’ status. Most of the projects are in the
process of obtaining their final licences and permits and
commercial negotiations are currently underway with the IPPs,
their advisors and lenders. We are concluding agreements to
procure greater than 600 MW before end-2025.
Renewable energy is a key enabler for our green hydrogen
project in Sasolburg (page 25). We have made valuable progress
in our negotiations with IPPs for long-term renewable offtake for
the required amount of wind and solar. A pre-feasibility study is
also underway for the renewable energy component of the wider
Boegoebaai green hydrogen hub (page 30).
To ensure a high capacity factor, an optimal
mix of wind and solar energy is required which
is indicatively shown below
Wind
Solar
Project development
• Structuring
• Land
• Technical
Sasol’s procurement
process aims to
secure projects that
are advanced in their
development and
mainly require final
financial close to be
concluded, including
the negotiations of
the PPAs.
Financial close
• Environmental
permits
• Other licensing
and permitting
WIND AND SOLAR PROJECT LOCATIONS IN
SASOL ENERGY’S PROCUREMENT PIPELINE
Limpopo
• Funding and financing
• Offtaker negotiations
Gauteng
Mpumalanga
North West
Construction
• Detailed design
• Procurement
• Commissioning
Free State
Northern Cape
Operations
• 20-year operations and maintenance
Eastern Cape
Western Cape
For Sasol Chemicals in Eurasia and the United States, we continue to
identify opportunities to increase the use of renewable energy as a
key lever to attain our emission-reduction targets. We have concluded
multiple PPAs and a CO2-neutral-steam supply agreement amounting
to 72 ktpa CO2e reduction in Europe. Since January 2022, all externally
purchased electricity for the Brunsbüttel site is renewable. The impact
of the Russia/Ukraine conflict and the increase in natural gas
and electricity prices are affecting the availability and pricing of
renewable energy. This in turn could affect conclusion of further PPAs
for our European sites.
In the United States, we are pursuing a VPPA with a project developer
to install a renewable energy project in return for renewable energy
certificates (RECs) to offset scope 2 emissions. Unfortunately, our
negotiations with the project developers have been impacted by
unrelated regulatory investigations of potential anti-dumping claims
relating to solar panels produced in southeast Asia. This has resulted
in solar panel imports to the United States being suspended. Project
costs and execution timelines have also been negatively affected by
inflation and commodity price increases. Securing VPPAs for North
America was temporarily placed on hold early in 2022 due these
changes. In the meantime, the United States Department of Justice
clarified its position on solar panel imports and subsequently, we
have resumed activities to secure VPPAs.
SASOL CLIMATE CHANGE REPORT 2022 24
KwaZuluNatal