Business Maverick

ELECTRICITY CRISIS

Power purchase agreements – the future for corporate energy supply?

Power purchase agreements – the future for corporate energy supply?
From left: Unsplash | Wind turbines at the wind power facility in Gouda. (Photo: Dwayne Senior / Bloomberg via Getty Images) | Unsplash | Wind turbines at the Umoya Energy wind farm in Hopefield. (Photo: Dwayne Senior / Bloomberg via Getty Images)

Renewable energy will go a long way towards meeting the energy requirements of two multinational corporates by the end of the year, via power purchase agreements.

Mainstream Renewable Power, a global wind and solar company, has reached financial closure on 20-year power purchase agreements for a 97.5MW solar PV farm in the Free State with Sasol and Air Liquide.

Construction will start this year and power generated will be delivered via the national grid to Sasol and Air Liquide’s operations in Secunda, Mpumalanga, with energy production to go online next year.

Mainstream’s general manager for Africa, Hein Reyneke, says private power purchase agreements are crucial to unlocking the country’s energy constraints, as they can make a significant contribution to energy security and load shedding challenges quickly and cost-effectively. 

Private off-take agreements enable significant quantities of energy to be delivered quickly and reliably, reducing companies’ exposure to rising energy costs and helping achieve their decarbonisation targets.   

The project will contribute to the local community through job creation and socioeconomic investment. 

“This agreement underscores our commitment and responsibility to providing viable commercial and socioeconomic solutions to address South Africa’s energy security needs as part of the energy transition, and contribute towards developing the independent power producers’ role in rebuilding the South African economy as quickly as possible,” said Reyneke.

Mainstream is one of the leading renewable energy companies in South Africa. Over the past 15 years, it has delivered 850MW of wind and solar assets into commercial operation. 

Mainstream’s South African team has developed a project pipeline comprising more than 10GW of onshore wind and solar PV across multiple provinces. In addition, its subsidiary, Mainstream Asset Management South Africa, provides operations and maintenance services to ensure long-term asset integrity.

Priscillah Mabelane, executive vice-president of Sasol Energy Business, says the agreement is a critical milestone. 

“This is significant progress towards Sasol’s ambition to reduce its absolute scope 1 and 2 Greenhouse Gas (GHG) emissions by 30% off a 2017 baseline,” she says. 

“Sasol is committed to pursuing renewable procurement as a key lever for reducing GHG emissions, and we have made significant progress in procuring over 600MW.”

Kimberly-Clark’s 2.2MW rooftop solar PV

Manufacturer and marketer of personal care brands, Kimberly-Clark has signed a long-term power purchase agreement with Energy Partners, which will include the installation of a 2.2MW rooftop system at K-C’s Epping facility, making it one of the largest rooftop solar photovoltaic systems in Cape Town.

The system is expected to produce 3,478MWh of energy per year, saving more than 3,130 tonnes of carbon dioxide emissions each year, the equivalent of powering 1,030 residential homes annually.

Kimberly-Clark owns household brands including BabySoft, Kleenex, Kotex and Huggies.

Steven Hayes, general manager of Kimberly-Clark sub-Saharan Africa, says the company is committed to reducing its environmental footprint and the project will contribute towards its 2030 goal to reduce total emissions by 50% globally compared with 2015.

“The installation of this rooftop solar photovoltaic system and partnership with EP is a significant step towards achieving our renewable energy targets, and we are proud to be part of the solution in creating a more sustainable future for South Africa,” he says.

Construction of the system, which will include 4,000 solar panels, will begin shortly. The system is expected to produce its first clean energy in the second half of this year. DM

Gallery
Absa OBP

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Daily Maverick Elections Toolbox

Feeling powerless in politics?

Equip yourself with the tools you need for an informed decision this election. Get the Elections Toolbox with shareable party manifesto guide.