South African real estate trust, Growthpoint Properties, has recently entered into an offtake agreement with local electricity trader, Etana Energy, for the procurement of 195 GWh of renewable energy. The power will be sourced from wind, with a smaller portion coming from hydro and large-scale solar facilities.
This agreement is significant as it marks South Africa’s first multi-jurisdiction, multi-building, multi-source renewable energy wheeling arrangement. It enables Growthpoint’s tenants to access green energy and will cover 32% of the company’s total current annual electricity consumption across its commercial property buildings in various locations throughout the country. Unfortunately, the duration and financial terms of the power purchase agreement were not disclosed.
Under the agreement, Etana Energy will provide 70% of the electricity consumed by Growthpoint’s participating buildings. In some cases, tenants will have the opportunity to purchase 100% renewable energy. The majority of the wheeled renewable energy will be generated from wind sources, with a smaller contribution from hydro and large-scale solar capacities.
One notable aspect of this deal is that Growthpoint will have exclusive rights to purchase all the electricity generated by a 5 MW hydroelectric power plant developed, owned, and operated by Serengeti Energy. This plant is located on the Ash River within the Lesotho Highlands Water Scheme, near Clarens in South Africa’s Free State. Currently under construction, the hydroelectric power plant is expected to be operational by July 2025 and will supply its first electricity to Growthpoint at that time.
Reyburn Hendricks, the director of Etana Energy, expressed excitement about the project, stating, “Business has a clear role to play in solving our biggest challenges, and this is a highly replicable, scalable example of how to achieve this while creating value for all involved.”
South Africa has been making progress in the field of renewable energy, with hybrid projects gaining momentum. In August 2023, the government awarded project agreements to two wind-and-solar-storage hybrid facilities as part of its Risk Mitigation Independent Power Producers Procurement Programme. These facilities are estimated to generate a combined energy capacity of 203 MW. Additionally, South Africa had 5.8 GW of installed solar capacity by the end of 2022, according to the International Renewable Energy Agency.
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