SolarAfrica has announced the successful issuance of an Eskom budget quote (BQ) for the company’s utility-scale solar PV project in the Northern Cape. This is not only a significant milestone for the award-winning company but also a massive leap towards making wheeled energy available to South African businesses that couldn’t access it before.
The rules have changed. The rules for grid capacity allocation, that is. A few months ago, Eskom leveled the playing field for projects participating in the Renewable Independent Power Producer Programme (REIPPP) with a ‘first ready, first served’ approach – giving shovel-ready power generation projects priority in the queue over the ‘first come, first served’ projects that used to take up valuable capacity allocation but weren’t ready to proceed. For a project to be greenlit, it must undergo extensive and stringent evaluations before it can obtain a budget quote (BQ), 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 meticulously to meet all of Eskom’s strict criteria, the most important of which is having customers signed up and ready to consume wheeled energy via Virtual Power Purchase Agreements (VPPA). With several companies including Vantage Data Centres, Attacq, and NCP Chlorchem already signed up to SolarAfrica’s VPPAs, the doors are now well and truly 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 variety of commercial and industrial businesses to help them save substantially on their electricity bills while significantly improving their carbon footprint,” McDonald says.
When 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 that the government acknowledges the role that private enterprises play in advancing sustainable practices and sends a strong signal that the nation is serious about expediting the transition to renewable energy. This efficient approach to decision-making not only instils confidence in investors but also showcases a willingness to adapt and embrace modern energy solutions.”
In terms of customer confidence, the BQ issuance carries several compelling reasons for instilling 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 by 2025.”
The issuance of BQs is not just for the benefit of IPPs like SolarAfrica; it benefits the country too. While wheeling is not an overnight solution to load shedding, 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 that 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, the confirmation of SolarAfrica’s BQ further cements 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 over the next few months in De Aar in the Northern Cape. This is one of several utility 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 that will be generated by more than 560 000 solar panels. Once completed, the site will allow SolarAfrica to wheel solar energy generated in De Aar to various commercial and industrial businesses across South Africa before the company commences Phase 2.
“This achievement underscores the immense potential of solar energy in South Africa. With this grid allocation, SolarAfrica is now poised to harness this potential to its fullest extent, ensuring 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 of our customers as possible throughout each phase of the project,” concludes McDonald.
