Vodacom’s big renewable push

 ·9 Oct 2023

Vodacom is expanding its use of renewable energy sources with help from Eskom.

In August, Eskom and Vodacom South Africa signed a ‘first of its kind’ virtual wheeling agreement.

The mobile network operator has been severely impacted by load shedding, spending R4 billion on backup power systems for its South African operations – with R300 million spent in the last financial year on operational costs such as diesel for generators.

With the virtual wheeling system in operation, Vodacom, Eskom and the National Business Initiative (NBI) hosted government and business stakeholders in a knowledge-sharing session.

“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, said.

“We are really excited that we have the opportunity to contribute to the national grid, and truly hope that through sharing our understanding of virtual wheeling and engaging both government and private participants on this solution, similar actions can be taken by other businesses across the country.”

Sitho Mdlalose, CEO of Vodacom SA and Electricity Minster Kgosientsho Ramokgopa

Although wheeling was first approved in South Africa in 2008, it traditionally featured a one-to-one relationship between the IPP and the buyer who used the national grid.

It also has limitations for companies working in complex operating environments.

Virtual wheeling addresses these issues by using smart metering, removing the requirement to change the customer’s supply agreements, and extending wheeling to customers on low voltage.

“Virtual wheeling allows industrial and commercial customers connected to either Eskom or municipal networks to buy electricity directly from IPPs,” Monde Bala, Eskom’s Distribution Group Executive, said.

“This has a knock-on effect of increasing security of supply and reducing load shedding by unlocking investments in new generation capacity by IPPs at no cost to Eskom or the taxpayer.”

“Virtual wheeling does not require changes to existing Electricity Supply Agreements (ESAs) and is not limited by municipalities that do not have wheeling frameworks. However, Eskom will only process the refund of an off-taker or municipality whose Eskom account is in good standing.”

Parties from multiple industries said that they have a commercial interest in the virtual wheeling system enabled via Eskom and the Vodacom subsidiary, Mezzanine.

“Vodacom, Eskom and the NBI all hope that more organisations will be able to utilise virtual wheeling, adding capacity to the grid without impacting Eskom’s balance sheet while helping to reduce its greenhouse gas emissions, benefitting the South African economy and environment,” Vodacom said.

Read: Huge revenue boost for Vodacom

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