SolarAfrica has announced the successful issuing of an Eskom budget quote (BQ) for the company’s utility-scale solar PV project in the Northern Cape. This marks a significant milestone for the company and a major leap towards making wheeled energy available to South African businesses that could not previously access it.
The rules for grid capacity allocation have changed. A few months ago, Eskom levelled the playing field for projects participating in the Renewable Independent Power Producer Procurement Programme (REIPPPP) with a ‘first ready, first served’ approach – giving shovel-ready power generation projects priority in the queue over the projects that, in terms of the previous ‘first come, first served’ approach took up valuable capacity allocation but were not ready to proceed. For a project to be given the ‘green light’, it must undergo extensive and stringent evaluations before it can obtain a budget quote, which serves as official confirmation that the project has been allocated capacity on the national grid.
As one of the first private sector providers to receive a BQ since the new rules were implemented, SolarAfrica worked carefully to meet all Eskom’s strict criteria, the most important of which is having customers signed up and ready to use wheeled energy via Virtual Power Purchase Agreements (VPPAs). With several companies – including Vantage Data Centres, Attacq, and NCP Chlorchem – already signed up to SolarAfrica’s VPPAs, the doors are now open for more businesses across the country to benefit from wheeling.
“Securing this type of grid capacity for wheeled energy is a game-changer,” says David McDonald, CEO of SolarAfrica. “Typically, a vast majority of grid capacity is already allocated to mega institutions and large-scale energy-intensive operations. With our holistic suite of solutions and our one-to-many wheeling arrangements, we can provide power to a wider range of commercial and industrial businesses to help them save substantially on their electricity bills and improve their carbon footprint significantly,” McDonald says.
Asked why the issuing of BQs to independent power producers (IPPs) is groundbreaking for the renewable energy sector, McDonald says: “A precedent has now been set in the sector where government acknowledges the role that private enterprises play in advancing sustainable practices and this sends a strong signal that the nation is serious about expediting the transition to renewable energy. This efficient approach to decision-making instils confidence in investors and demonstrates a willingness to adapt and embrace modern energy solutions.”
In terms of customer confidence, the issuing of the BQ carries a number of inherent factors that instil trust. “In light of Eskom’s new rule, the BQ serves as a stamp of endorsement, reassuring our customers that we have lived up to the benchmarks we set for ourselves as a company, as well as the promises we have made to our clients. We made a commitment to provide power, and now we can live up to that as we start construction with the aim to wheel energy from this plant by 2025.”
The issuing of BQs benefits not only IPPs like SolarAfrica, it benefits the country too. Although wheeling is not an overnight solution to loadshedding, it will go a long way in relieving power generation pressure off the state utility and further driving the adoption of renewable energy in South Africa. “By partnering with the private sector, Eskom can also benefit from the infrastructure investment and technological advances that independent power producers bring to the table. This means more and more providers can wheel energy into the existing grid, minimising disruptions, enhancing the overall efficiency of the energy system, and promoting the use of renewables,” McDonald says.
As part of the larger Starsight Energy merged group, SolarAfrica, with this confirmation of the BQ, is further supporting the group’s vision of being the leading pan-African provider of on- and off-site renewable energy solutions on the continent.
“We are always looking for opportunities to cross-leverage innovation,” says Charl Alheit, Group Chief Investment Officer. “Establishing a utility-scale solar farm in South Africa will allow us to replicate its success in other regions to meet country-specific energy and wheeling requirements.”
SolarAfrica’s first utility-scale wheeling project, known as SunCentral, will break ground within the next few months in De Aar in the Northern Cape. This is one of several utility-scale projects the company is developing. SunCentral will consist of three phases, with a total of up to 1 GW in available allocation. Phase 1 will offer around 300 MW, which will be generated by more than 560 000 solar panels. Once completed, it will allow SolarAfrica to wheel solar energy generated in De Aar to various commercial and industrial businesses across South Africa before the company starts on construction of Phase 2.
“This achievement underscores the immense potential of solar energy in South Africa. With this grid allocation, SolarAfrica is now positioned to harness this potential and to ensure a consistent and sustainable energy supply for our customers, and the broader communities. While space is limited and allocated on a first come, first served basis, we are working to make sure we can offer wheeling that is affordable, flexible, and sustainable to as many customers as possible through each phase of the project,” says McDonald.
For more information visit: www.solarafrica.com