The latest news regarding South Africa’s ailing energy industry is filled with stories covering (amongst others): renewed speculation around nuclear procurement; allegations of unsavoury deals with emergency gas ships; conversations with Eskom’s CEO about the state utility’s ongoing struggle to finance its crippling debt – let alone the disastrous fire that has broken out in one of its power stations, while still reeling from the R2 Billion repair bill incurred by the explosion in Medupi Power Station last month… the depressing list goes on.
The challenge remains: The South African Economy is being stifled by an energy availability factor of less than 70%, caused by a capacity deficit of around 12,000MW.
Whilst the Department of Mineral Resources and Energy has recently opened the latest round for independent renewable energy developers to bid in the Renewable Energy Independent Power Procurement Program (REIPPP5), these bids could take years to develop, will not provide enough power to fill the gap in supply and, with Eskom unable to finance its own debt, have no guarantees that National Treasury will underwrite the risk.
Yet, despite all the frustration and depressing news, one independent energy business is forging ahead with a concrete plan that will make it the leading privately-owned electricity company in South Africa to operate alongside Eskom.
Earth & Wire
Thomas Garner, Earth & Wire’s Business Development Head, explains:
“We are not focussed on the REIPPP programme or developing assets to sell to Eskom. We are focussed on a long-term vision to be South Africa’s most customer-centric independent energy business, delivering clean, affordable and reliable power to all South Africans, through the national transmission and distribution network.”
Commencing from 2022, through a phased, twenty-year roll-out, Earth & Wire will develop and supply 20,000 MW of clean electricity directly to South African consumers from their own supply of renewable resources.
According to Garner, their electricity will be produced by E&W’s secured pipeline of solar, wind, hydro, and storage assets currently under various stages of development, secured through extensive land rights across the country. Their first solar site is scheduled to deliver electrons to customers as early as Q3, 2022.
“In the immediate short-term, E&W has approximately 2000MW of late-stage wind and solar assets planned to be fully-constructed and operational by 2026.”
“We are already in talks with Eskom and will engage with the Energy Regulator to ensure that our electricity will be available to all consumers of electricity in SA, safely delivered through the Eskom and municipal networks.”
This is a clear departure from the typical way that South African businesses and consumers currently purchase electricity from the single, state-owned utility.
“We see ourselves playing a leading role in liberalising electricity in South Africa and facilitating the development of an Independent Power Producers market. Ultimately, power retailers should be competing for market share by offering affordable clean energy to customers who can buy the energy they want, at the time they need it, at a price that makes sense. The choice should be theirs. We are also willing to support the System Operator in managing standby capacity, storage of energy and ancillary services.”
Garner concludes: “We started building our business over ten years ago, understanding exactly what was needed to source, develop and manage our own supply – at significant scale – if we were to create this new consumer market opportunity. Now we’re there. We have the generation assets. We have a concrete roll-out strategy, and we have a transmission and distribution plan. We can now offer customers electrons. We’re literally open for business.”
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