With South Africa’s energy crisis becoming more prevalent in 2022 – owing largely to degrading infrastructure, global supply disruptions and the phasing out of coal – the country’s manufacturing industries are turning to renewable energy solutions to improve energy security in the face of ongoing power cuts.
With the government’s decision to increase the licensing threshold for embedded generation projects from 1MW to 100MW in 2021, new opportunities have emerged for manufacturing giants to adopt renewable energy, and companies such as South African Breweries (SAB), BIC South Africa and the Shoprite Group are taking charge.
Aimed at reducing the reliance on the national grid, manufacturers are turning to power purchase agreements (PPA) with renewable energy companies, or constructing their own green projects. SAB, for example, has signed a PPA with industrial scale biogas waste-to-energy company, Bio2Watt, whereby electricity will be supplied from Bio2Watt’s 4.8MW biogas plant situated at the Vyvlei Dairy Farm for SAB’s operations. With the target to achieve 100% purchased renewables electricity at all manufacturing sites across Africa by 2025, the PPA marks a critical step in this objective.
SAB’s Vice Principal for Sustainability, Conor Ruff, stated exclusively to Energy Capital & Power that, “SAB’s move towards sourcing all of its electricity from renewable sources will still rely on Eskom’s grid, however, these new renewable energy projects will help ease the pressure on the grid due to the additional generation capacity, making more electricity available for our consumers,” adding that SAB has made “significant progress to date and have a number of agreements in negotiation stage. We continue to explore opportunities to expand solar and biogas facilities, as well as investigating alternative renewable energy solutions.”
“In addition to the environmental benefits of adopting renewable energy, there are also the benefits of security of supply from on-site facilities. One of the main current challenges is lack of blanket wheeling agreements across all municipalities, which is potentially limiting the growth of off-site projects for industries. There is an opportunity for industries to come together and engage with municipalities to establishing wheeling agreements with Eskom which would enable significant growth in off-site renewable energy projects,” Ruff continued.
Additionally, stationery company BIC South Africa has also turned to green energy with the company’s Johannesburg manufacturing plant now deriving 100% of its electricity from renewable resources. This achievement comes four years ahead of the company’s original timeframe of sourcing 80% from renewables by 2025, making the company a pioneer in the transition to green energy. Both SAB and BIC South Africa can serve as models for other manufacturing companies in South Africa looking to ease grid reliance and enhance electricity security in 2022 and beyond.
Meanwhile, other private sector players such as the Shoprite Group – representing the largest supermarket retailer on the African continent – are also scaling-up renewable project development to improve costs and reduce emissions. Having set a target of powering 25% of its operations with renewable energy over the next five years, the Shoprite Group has already managed to double its solar capacity, adding 22 new solar plants between February and September 2021 alone. To date, the Group has 41 solar photovoltaic installations at two distribution centers, 38 supermarkets in South Africa and Namibia and a parking lot.
As the costs for renewable energy technologies continue to decline and the country’s energy crisis worsens, South African companies – led by manufacturers such as SAB, BIC and Shoprite – will continue to lead the way towards green energy adoption, either through PPAs or standalone projects.