South African company signs PPA for wind, hydro and solar generation

South Africa

Growthpoint Properties in South Africa has entered into a power purchase agreement (PPA) with Etana Energy for 195 GWh of renewable energy (wind, hydro and solar) a year, representing 32% of its total current annual electricity consumption (612 GWh in FY23).

In November 2023, Growthpoint signed a PPA with licensed electricity trader Etana Energy to wheel electricity to its commercial property buildings in several jurisdictions across the country. Wheeling is a process whereby electricity is bought and sold between private parties, using the existing grid to transport power from where it is generated to end-users that can be long distances apart.

The wheeled renewable energy will mainly consist of wind, with a smaller component of hydro and large-scale solar electricity. The combination of generation sources allows for a high coverage of Growthpoint’s energy use, as electricity is generated throughout the day and night, the company said.

The deal has set in motion South Africa’s first multi-jurisdiction, multi-building, multi-source renewable energy wheeling arrangement and will enable Growthpoint’s tenants to access green energy and reduce their carbon footprint, according to a release.

Through this agreement, Etana will cover 70% of the power consumed by Growthpoint’s participating buildings. In some buildings, Growthpoint will even be able to provide its tenants with the ability to purchase 100% renewable energy and actively drive carbon reduction.

As a result of the agreement with Etana, Growthpoint has exclusive rights to purchase all of the roughly 30 GWh that will be generated annually by a 5 MW hydroelectric power plant developed, owned and operated by Serengeti Energy. The project is on the Ash River within the Lesotho Highlands Water Scheme (LHWS), in the Free State, which provides the added benefit of effectively generating 24/7 baseload power. Growthpoint has also shown some interest in investing in the power plant by signing a memorandum of understanding with Serengeti Energy, which owns and manages renewable energy projects of up to 50 MW (mainly hydro) in sub-Saharan Africa and operates nine plants in five countries.

Initially targeted for South Africa’s Renewable Independent Power Producer Programme (REIPPPP), which contributes private sector-produced electricity to the national grid, Serengeti’s focus for this hydro plant shifted, and it advanced the project for the commercial and industrial sectors.

The project is being constructed on the water transfer scheme between Lesotho and South Africa, within the LHWS and positioned to produce reliable baseload power. It is also well-placed to capitalize on the LHWS Phase 2 future expansion. The hydroelectric plant has reached financial close and is under construction. The commercial operations date is expected to be July 1, 2025, when it will supply its first electricity to Growthpoint, wheeled via the Eskom grid and traded through Etana.

Thereafter, commissioning of wind and additional solar production from Etana’s portfolio of renewable energy projects connected to the national electricity grid will commence.

If produced by rooftop solar power, the 195 GWh would have been roughly a 130 MWp solar installation at a generating yield of 1,500 kWh/kWp annually. However, this PPA generation profile would be relatively flat over a 24-hour period due to mainly consisting of wind and the smaller hydro generation component, Growthpoint said.

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