Electricity and Control August 2023

ENERGY MANAGEMENT + THE INDUSTRIAL ENVIRONMENT

Powering a sustainable future: Renewable energy and PPAs South Africa’s energy market is currently witnessing a remarkable transformation as it shifts towards renewable energy to combat the persistent loadshedding crisis, and the global impacts of climate change. Jan Fourie, Executive Vice President for Scatec in sub-Saharan Africa, says: “As the world confronts the detrimental effects of human activities on the environment, renewable energy offers a way to address climate change challenges, without halting industry and development.”

Jan Fourie, Scatec in sub-Saharan Africa.

T he national Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has played a significant role in accelerating the growth of independent power producers (IPPs) and expanding the role of private providers in the energy market. Additionally, recent key legislative changes and the allowance of wheeling for private companies have further contributed to the adoption of renewable energy solutions and expanded the role of private providers in the energy market. “Big businesses that have signed power purchase agreements (PPAs) with renewables-oriented IPPs have improved their environmental standing by becoming less reliant on fossil fuels and reducing their carbon footprints,” Fourie says, noting that with renewable sources like solar and wind, the generation of electricity emits low to zero levels of greenhouse gases. “Around the world, countries are increasingly ushering in regulatory environments supportive of renewable energy and moving away from vertically integrated power utilities in favour of private providers and PPAs – which often prove more reliable than state-owned providers,” says Fourie. “Climate change concerns are driving this transition.”

He highlights that in South Africa, current legislation enables businesses to sign power purchase agreements with independent power producers, offering stable and often relatively low-cost electricity without upfront expenses – “a strategy that can relieve the pressure on Eskom, and aid South Africa in reducing our historical over-reliance on fossil fuels,” he adds. The national grid infrastructure allows for wheeling, that is, the transmission of independently produced renewable power through the grid. “Wheeling enables private sector entities – even those based in areas with unfavourable environmental conditions for wind or solar energy generation – to access affordable, reliable renewable energy,” Fourie notes. He envisions a future with nuanced, multilateral PPAs that allow agnostic energy mixes and flexible financing and contracting models. Private sector PPAs could potentially create a new ecosystem of interconnected projects with innovative methodologies and delivery systems. Power purchase agreements However, he says entering a PPA for the first time can be complex and requires some careful planning and negotiation. Fourie suggests that businesses need to collaborate with experienced professionals who can guide them through the process and help overcome any challenges.

Scatec has a number of established solar energy plants in the Northern Cape, and more under construction.

12 Electricity + Control AUGUST 2023