Major R3 billion solar project breaks ground in South Africa

 ·6 Dec 2023

The SOLA Group has started construction on a new 195 MW Solar PV plant in the Free State, which it says will be the first to sell power to multiple buyers across the country on flexible terms.

The project has received a capital investment of R2.8 billion, with SOLA as the majority equity shareholder, whilst three multinational energy users have been secured as anchor buyers for the project.

However, the group said that a significant amount of the project’s capacity has been left to flexible, short-term power purchase agreements, which will be available to a wide range of South African energy users.

This will give businesses access to reliable renewable energy, even if they do not want to enter into a long-term contract.

“Government has embarked on a process to unbundle Eskom and eventually create competition among multiple electricity suppliers. In this sense, SOLA is pioneering the first steps toward a more flexible and efficient electricity system and makes use of the existing Eskom wheeling framework to bring choice and flexibility to South African businesses”, said Dom Wills, CEO of the SOLA Group.

Wheeling is where electricity is bought and sold between private parties using the existing distribution infrastructure.

SOLA said it plans to sign interested buyers up for uncontracted power from mid-2024, with electricity delivery set for mid-2025.

“This is the fourth utility-scale renewable wheeling project that SOLA has closed and commenced construction on in the last 15 months. The project firmly establishes SOLA as South Africa’s leading IPP engaged in the sale of power to private buyers and brings the group’s portfolio to 581 megawatts of wheeling capacity currently under construction,” said Katherine Persson, the head of SOLA Assets.

The four projects are set to create 1,500 jobs for the surrounding areas, whilst the group’s fleet is expected to generate 1.34 terawatt-hours annually – enough to power just under 500,000 homes.

Wheeling push

SOLA’s projects highlight South Africa’s major push to electricity wheeling.

For example, in August, Eskom and Vodacom South Africa signed a ‘first of its kind’ virtual wheeling agreement as the telecoms company moves to renewable energy.

“Having co-developed the virtual wheeling solution with Eskom and concluded our agreement, we estimate that we will move approximately 30% of Vodacom South Africa’s power demand onto renewable sources, a significant step towards our renewable energy ambitions,” Sitho Mdlalose, CEO of Vodacom South Africa, previously said.

The City of Cape Town also launched a wheeling pilot in September, with the hope of adding 1,000 MW of independent grid over time to help end load shedding.

Read: Stage 7 load shedding – South Africa dangerously close to the edge

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