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In this episode of the PowerPulse podcast series, Kevin Ssemwogerere, Corporate Venturing Lead in Wholesale Clients Digital for the Standard Bank PowerPulse platform, joins Alec Hogg to provide more detail on how PowerPulse works. PowerPulse is a new digital platform introduced by Standard Bank that provides alternative energy solutions for large commercial clients by connecting them with appropriate power suppliers. Ssemwogerere delves into solar power as an advanced alternative energy solution and explains that while there is a great demand for and supply of power, the “necessary levers for the right participants in this industry to come together and exchange value have not been there”. “The opportunity for us is to come in and be a facilitator of the exchange of value between the participants,” he says. “So we’ve come up with a digital platform called PowerPulse, which brings together – through a matchmaking process – the entity that’s looking for solar PV as an option for self-generation of electricity, but also the installer of solar. We sit in the middle of it as the facilitator that helps them to exchange value and ultimately, in a trusted environment, have solar installed, and everybody benefits through this exchange of value.” – Claire Badenhorst
Kevin Ssemwogerere on solar power as an alternative energy solution:
I think when it comes to solar PV as an alternative energy option, there are still various options out there when it comes to the different technologies that exist. But what is quite, I think, convincing about solar PV is as compared to many of the other technologies, besides the traditional utility-generated technology we get from burning coal, it seems to be the most advanced, if not one of the most advanced options available. Hence why we [are] probably seeing a trend towards solar PV as an alternative option wherever there’s a need to consider new technologies for alternative energy. And we [are] seeing that trend across various markets. We [are] seeing it in commercial industries, but at the same time, we are also seeing it potentially in residential industries and it’s going to be interesting to see that trend unfold.
On solar power being priced competitively:
If we go back to the basics of supply and demand, as the demand rises, I think definitely there’s an opportunity for more and more suppliers to get into the space, even though the theories of economics would dictate that the suppliers have some kind of bargaining power and should be pricing the technology at the highest possible levels. There’s also an element around being competitive and supplying solutions to customers in the space where, first of all, it justifies the cost of investment, and hence you see the competitiveness and pricing and the price point dropping. But secondly, with the growing demand, it convinces more and more manufacturers to get into the space and manufacture more of these solar PV modules and panels and various other devices that would be considered for these installations.
So as we get more and more of these optionalities coming into the market, that also has a positive impact on the cost of solar PV equipment for installation. It’ll be interesting to see, as further advancements happen in the manufacturing space but also in the technical specifications space of solar PV and the related equipment, it would be interesting to witness even further competitiveness in pricing to make it a more accessible technology to various participants out there.
On how PowerPulse matches the demand of power with the supply:
So I think the latest exemption that has been announced by the Ministry of Mineral Resources and Energy to allow for registration for self-generation beyond the original range of one megawatt now all the way up to 100 megawatts, presents several opportunities in the energy space or power generation space. But I think specifically when it comes to alternative energy options, we are now probably going to see, as an enabler of this legislation, more incentive for supply and demand to be matched in this industry, which has largely been fragmented. So the opportunity that we are trying to pursue and as endorsed by quite extensive customer discovery – speaking to real entities out there that have real energy needs across the spectrum, large businesses to smaller businesses – is that there has always been a fragmented industry because the necessary levers for the right participants in this industry to come together and exchange value have not potentially been there. But now with these enablers coming into the spectrum, on the one side, we have demand which is more insatiable than ever, we have a growing population, we have much more industrialisation than ever before, and at the same time, we have the challenge of intermittent power supply.
When it comes to the supply side, we now have, in addition to the technology advancement that’s in the space, the evolution of skill sets and experiences in this space, but now also the evolution of legislation such as this exemption that has been announced by the Ministry of Mineral and Resources and Energy, we have now the formidable supply to start matching the demand. So the opportunity for us here is to come in and be a facilitator of the exchange of value between the participants. On the one side, you have the entities that are looking for alternative means to generate power, consume power, and on the other side, we have the suppliers and installers who are here to actually facilitate the installation of the necessary equipment such as solar PV.
So we’ve come up with a digital platform called PowerPulse, which brings together, through a matchmaking process, the entity that’s looking for solar PV as an option for self-generation of electricity, but also the installer of solar. We sit in the middle of it with a typical digital platform business, as is known today in the 4IR, as the facilitator that helps them to exchange value and ultimately in a trusted environment, have solar installed and everybody benefits through this exchange of value. And of course, there’s also a network effect in that, as we start to see some of this facilitation, there is now space for a broader ecosystem to grow with additional participants coming into the fold to exchange value. So there is now an exchange of data through a digital platform where there’s a need for potentially more accurate metering and monitoring services and that also opens up another discussion to how, as a digital platform business, we are now trying to harness this opportunity for the benefit of businesses across our country.
On how the platform works:
In essence, you get invited to it through our Standard Bank OneHub platform, which is an aggregated place for various solutions which are offered by the bank. But as part of that offering, PowerPulse is an application within that platform and when the relevant entity or client has been invited to this platform, they are then free to fully explore the full-service offering, which is there to make the journey to solar exploration, installation, and introduction to an installer or solution provider much easier and smoother, with fewer barriers to interaction and so on.
So the platform currently is running with Standard Bank clients, however, we are not exclusive to Standard Bank clients. We do also have it as an offer to non-Standard Bank clients. The reason for this is this platform goes beyond the ordinary services we would have as Standard Bank. It’s not a funding platform, fundamentally. It’s a platform that brings together the right participants for them to be introduced to each other and then have this solar exploration matured together with our trusted brand.
So we have vetted these service providers quite extensively. Any service provider that would be introduced to a business that’s looking for solar on this platform has gone through an extensive procurement, legal, due diligence process in order to make sure that they have the right credentials in place. This is very much an evolving industry and there are some fly-by-night solution providers out there. So we’ve done the work to make sure we have identified the trustworthy solution providers and those are the ones that would be participating in this platform. So the customer can rest assured that if they are introduced to a solution provider, the solution provider has been extensively vetted.
When you start your digital journey, it starts at a high level from a needs analysis and economic feasibility assessment point of view. So we have summarised a series of questions into an easy-to-understand process flow, which ultimately gives you a quick automated answer on whether it’s feasible for you to even consider solar or not and whether you should continue. Once you get beyond that process, through our concierge dedicated Standard Bank team, we then coordinate your journey to a site visit from the solution provider and then ultimately to the proposal phase where through our standardisation process and benefit of the platform, there’s an easy to compare summary that’s submitted to the client through the platform, which helps them to quickly have a view of which potentially is the most suitable proposal for them to accept. At that point, they then contract the solution provider and go ahead with installation, and if they need funding, we then, of course, hand them over to our traditional funding workstreams within the Standard Bank offering.
On why not everyone will necessarily need the platform:
When do the economics make sense for a business or a residential homeowner to consider solar installation? From our experience and the lessons that we’re currently getting through – some of the ongoing customer journeys on our digital platform – is that it’s not in every instance that solar PV, for example, is the answer. There’s a lot more preassessment that needs to go into the process, first of all, around the financial implications of implementing such a solution. Then it comes down to the technical implications, such as, do you have the right infrastructure in place to even harness the power of the sun and then use that as an alternative energy source for power generation?
Then, lastly, is the business viability. You need to be able to fund the solution. When it comes to what we’re currently focusing on, which is commercial and industrial businesses, there’s a very easy story, I think, to tell there around the economic viability and usability of solar PV facilities in relation to how it impacts the bottom line of these businesses. The benefit is quite easy to quantify, given the scope of investment that may be required and take into account certain financial considerations, such as when will the payback period kick in for this particular investment? If you’re to take on funding, at which point would you say that you’ve repaid your debt to the point where it starts to make sense to the strategic growth of your particular business?
When it comes to residential, which we haven’t focused on as yet but we are intending on potentially looking into it quite soon, it becomes a bit more complex. We do have the challenge of loadshedding and everybody would like to have power 100% of the time and there are various solutions which are already out there to mitigate against this. But once again, the economics need to make sense. So if it comes to the cost of your house, in addition to the cost of the solar solution that you’re going to implement on your house, does it make sense in terms of the debt repayments you might consider – if that’s how you’re going to fund it – to actually install that on your house as compared to your current monthly electricity bill? Is your house potentially in the right location as well to harness the power of solar and if not, would you then need additional facilities such as battery storage and so on, etc., to supplement any shortfall that you might have? And will you be able to maintain the facility that’s been installed on your roof? It could happen at some point that there’s a dust storm and your solar panels are not operating as efficiently as possible. How will you know that you have harnessed the power of the sun efficiently for that day for your investment to make sense? So I think it’s quite a complex question to delve into, but it very much delves into, what are the economics, and that starts to justify the investment. But it will be interesting to see the evolution of this into the residential space which we would like to start focusing on at some point.
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