The project demonstrates the opportunity for local economic development through solar power
Amidst the announcement of another week of load shedding and the fear that this might cull more jobs for South African business, there remains a beacon of light - the potential of renewable energy projects to transform South Africa’s economy.
The Adams Solar Project - which supplies power to offtaker Amazon Web Services via the grid – has reached commercial operation, a milestone signifying a new possibility for energy generation in South Africa. An announcement made last week highlighted that the private-to-private power procurement is taking place through wheeling across the national transmission network, which allows the electricity generator to supply power directly to customers. This provides more flexibility than when industrial electricity customers build generation on their own property, which is termed embedded generation.
Whilst governmental electricity procurement programmes, such as the REIPPP and the Risk Mitigation IPP Procurement Programme (RMIPPPP), aim to create long-term renewable energy capacity, the agility of the private market could help to significantly lessen pressure on the grid and plug the short-term supply gap. In addition, these arrangements pay Eskom for the use of its grid, which can be used towards any broader maintenance required.
Commenting on the milestone, Vuyo Ntoi, co-MD of African Infrastructure Investment Managers (AIIM), a funder of the project, said, “We are delighted to see Adams Solar Project reach commercial operation; with nearly 500 million people across the continent still lacking access to reliable energy, identifying and investing in renewable energy power projects has never been more important. We see renewables as the long-term solution to powering not only the country, but the continent, too.”
Historically, much of renewable energy investment has come from overseas, an issue which still remains today, threatening to skew the investment away from local communities and businesses. However, the Adams solar project is unique in that it is 100% locally developed and owned, with a 45% shareholding by black women-owned Mahlako a Phahla Financial Services.
“Mahlako is committed to not only delivering returns for its investors, but we also view the role of black asset managers key to transforming the renewable energy sector,” says Makole Mupita, director at Mahlako a Phahla Financial Services. “The way to broaden the impact of economic benefits of these investments is to ensure local, and particularly black, ownership.”
Chris Haw, Director at the SOLA Group, agrees. “Projects like this pave the way to providing customers with more choice about how and where they buy electricity - something that has been long overdue in the energy sector. We believe this model is a fast and elegant way to bring more capacity onto the network ultimately alleviating the constraints that lead to load shedding."
The SOLA Group developed, engineered and oversaw construction of the project, and is responsible for its operation.