Vodacom claims that the deal may help get South Africa’s load-shedding energy crisis under control
Vodacom South Africa has signed South Africa’s first ever virtual wheeling agreement with state-owned utility firm Eskom.
As per the terms of the deal, Vodacom will be able to access electricity from non-Eskom sources whilst still using Eskom’s transmission infrastructure and services.
This move will not only help ensure a reliable power supply for Vodacom’s network, but will also reduce the direct strain on the country’s national grid. It will also help Vodacom reach its goal of getting all its power from renewable sources by 2025.
Usually, wheeling involves a singular relationship between an independent power provider (IPP) and a buyer, using the national grid to carry the energy. However, such a method is unsuitable for complicated and highly distributed organisations, such as Vodacom South Africa, which has 15,000 distributed low-voltage sites that are linked to 168 municipalities across the country. The new virtual wheeling solution will address these challenges, giving Vodacom access to energy from multiple IPPs.
“Converting our existing fossil-fuel based electricity supplies directly with on-site renewables is limited by technical constraints that are difficult to scale. We explored a traditional wheeling option, but this had numerous limitations, which we believed could be overcome by reimagining the problem and using technology to solve the issue,” said Vodacom Group CEO, Shameel Joosub in a press release.
“Vodacom had four objectives when we approached Eskom with this solution: one to remove complexity, two to use technology to solve legacy limitations, three to access renewable energy with a sound business case and lastly, encouraging private participation to help solve the energy crisis,” he added.
Since 2007, the instability of South Africa’s national grid has resulted in imposed periods of temporary blackouts, known as load-shedding. South Africa is currently at load-shedding level four, which means that load-shedding is scheduled 12 times over a four-day period for two hours at a time, or 12 times over an eight-day period for four hours at a time.
Last year, there were over 300 load-shedding periods, creating a very difficult environment for network operators and their energy-hungry networks.
In the past financial year alone, Vodacom South Africa has spent over R 4 billion ($213.5 million) on back-up power solutions and R 300 million ($16 million) on operational costs such as generator fuel. These huge costs impact the firm both financially and sustainably.
“Vodacom’s partnership with Eskom is transformational in that our virtual wheeling solution will enable South Africa’s private sector to participate in resolving the energy crisis which continues to impact the country’s economy,” said Joosub.
“It also provides a blueprint for other South African corporates to adopt, as we pool our collective resources with the common objective of bringing an end to load shedding. The virtual wheeling solution has the potential to be fast-tracked, depending on the available licensed capacity of IPPs.”
The pilot phase of the virtual wheeling project finished last year and, after further testing, the co-developed solution is now accessible to both the public and private sector, allowing Vodacom to add more capacity to the grid.
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