Vodacom has signed a virtual wheeling agreement with Eskom – the first of its kind in South Africa – to speed up efforts to solve the country’s energy crisis.
As well as adding capacity to the nation’s power grid, the agreement – described as a Vodacom innovation co-developed with Eskom – will also move Vodacom closer to its goal of sourcing 100% of its electricity from renewable energy by 2025.
The agreement allows Vodacom to carry out the next phase of the plan: securing independent power producers (IPPs) under the same terms and conditions that underpin its agreement with Eskom.
Vodacom Group CEO Shameel Joosub said in a statement: “Vodacom’s partnership with Eskom is transformational in that our virtual wheeling solution will enable South Africa’s private sector to participate in resolving the energy crisis that continues to impact the country’s economy.
“It also provides a blueprint for other South African corporates to adopt as we pool our collective resources with the common objective of bringing an end to load shedding. The virtual wheeling solution has the potential to be fast-tracked, depending on the available licensed capacity of IPPs.”
The energy crisis in South Africa has been devastating for many businesses.
Vodacom South Africa spent more than R4-billion on backup power solutions and R300-million in the past financial year alone on operational costs such as diesel for generators.
Read: ‘Wheeling’: A promising solution to South Africa’s energy woes
Traditional wheeling typically involves a one-to-one relationship between an IPP and a buyer using the national grid to convey their energy. While the concept of traditional wheeling is fairly common practice globally, it has certain limitations for companies with complex operating environments.
For example, Vodacom South Africa’s operating situation is unique due to the complexities associated with having over 15 000 distributed low-voltage sites across the country that are linked to 168 municipalities. Up now, this complexity has prevented Vodacom from accessing large-scale renewable energy from IPPs. The virtual wheeling solution addresses this.
“Converting our existing fossil-fuel based electricity supplies directly with on-site renewables is limited by technical constraints that are difficult to scale. We explored a traditional wheeling option, but this had numerous limitations, which we believed could be overcome by reimagining the problem and using technology to solve the issue,” said Joosub.
Read: ‘Virtual wheeling’ on the cards as Eskom opens up
With the agreement now signed, Vodacom will be able to add more capacity to the grid without impacting Eskom’s balance sheet.
The blueprint provides a road map for others in the private sector, effectively involving those who want to benefit from cost saving in the process of stabilising South Africa’s grid and reducing overall emissions.
“Think of it like purchasing renewable energy certificates,” said Vodacom South Africa CEO Sitho Mdlalose in the statement. “But most importantly, it also has the added benefit of positively impacting the supply deficit and nurturing the growth of renewable energy production in South Africa.
“We estimate that this initial phase will move approximately 30% of Vodacom South Africa’s power demand onto renewable sources, a significant step towards our 2025 renewable energy ambitions. To make up the difference, we are working hard at exploring and developing additional solutions,” he added. – © 2023 NewsCentral Media
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