New IPP energy service for South African firms

A local independent power producer (IPP) has unveiled a new energy service designed to save businesses up to R60-million over a five-year period.

South African IPP SOLA Group asserts that its offering is set to transform the local energy landscape, vastly increasing the availability of renewables to large consumers of electricity with an initial 52 MW of clean energy produced by the company available using Eskom’s grid.

“SOLA Group is addressing this gap by introducing a suite of capital projects that include large-scale renewable energy generation and advanced battery storage solutions that are in construction currently. These projects are designed to provide greater flexibility, catering to a wide range of energy user’s needs,” said SOLA assets MD Katherine Persson.

“This will change how companies approach energy procurement, when seeking not only energy cost savings but also carbon reduction benefits,” Persson said.

The product is designed to give South African businesses access to a flexible, cost-effective alternative for energy access, with the additional aim of enabling a reduction in companies’ carbon emissions by up to 150 000 t of CO2 over 5 years.

“Our innovative new electricity contracts let companies purchase the exact amount of power they need, with contract durations tailored to their specific requirements. We’ve removed the usual long-term contract commitments to offer a low-risk path to quick and easy savings and carbon reduction. And we’re selling power from real projects, and not planned developments that will only be financed and built after you’ve signed your contract,” explained SOLA commercial MD Jonathan Skeen.

Companies can enter short-term electricity purchase agreements, wheeled through the Eskom grid and only pay for the energy consumed. SOLA says its battery energy storage solutions offering is also designed to support the grid by contributing energy during high load periods, when there is high demand for energy across the country.

Persson noted that, previously, large renewable-energy projects in South Africa have involved lengthy power purchase agreements (PPAs) and complex PPA negotiations with buyers, and extensive financing conditions and requirements.  “This new energy offering is the first to allow buyers the opportunity to contract with financing risks already resolved, construction significantly advanced, and commercial operations imminent.”

Through Eskom’s wheeling mechanism, the project will enable power sales to private energy users across the country, providing an opportunity for businesses to secure clean energy under flexible terms.

Eskom’s wheeling mechanism, a key component of SOLA’s strategy, allows businesses connected to its network to benefit from PPAs with the provider’s renewable-energy fleet, regardless of their location. Under this agreement, Eskom credits buyers for the renewable energy procured from IPPs, facilitating the transition to more sustainable energy sources.