South Africa's power utility, which has traditionally relied on coal to generate electricity, has entered its renewable energy era with the launch of Eskom Green.

SABC News reports that the business unit will house Eskom’s green energy business to fast-track the rollout of solar, wind, and green hydrogen technologies.

As part of the power utility's unbundling strategy, Eskom Green will operate as a wholly-owned subsidiary with an independent board.

Cheaper power

And the government is keeping its fingers crossed that this move will alleviate the ever-rising cost of electricity in the country.

"The profile of the various renewable energy sources, when you pull them together, can provide an approximate base load," said the Minister of Electricity and Energy, Kgosientsho Ramokgopa.

“Technology will get us there, but the working theory is that the more you have renewable energy sources, the more you will be able to afford them, which are relatively cheaper.

"It will have an impact on the pricing, and it’s going to arrest the exponential price of electricity."

The clean energy unit says its pricing determination will be "clear and transparent", where the wholesale tariff is passed through to the customer at cost.

"The network, wheeling and other regulated wholesale charges levied by the transmission and distribution operators will not be absorbed by Eskom Green and are not marked up," it says in a statement.

Adding that "The charges will be presented as a distinct line item separate from the price of energy that Eskom Green generates and sells. This way, the customer has full transparency on what is paid for energy and what is paid for network use."

Plans

The unit will kick things off with large industrial demand in mining and manufacturing, through Section 34 IRP allocations, and direct bilateral power purchase agreements (PPAs) to provide decarbonisation solutions.

It will follow this up by heading for the Eskom Distribution market, leading the customer network through the eDX Edge offering, as well as the South African Wholesale Electricity Market (SAWEM), the Southern African Power Pool (SAPP), and municipalities.

According to Reuters, Eskom indicated that funding for the initial phases has been provisioned in its approved capital expenditure programme and will be supported by on-balance-sheet funding.

Eskom Green says that, in line with the Integrated Resource Plan (IRP) 2025, its contribution is critical to meeting the renewable build targets of 5.6 GW by 2030, 21 GW by 2035, and 32 GW by 2040.

It aims to have about 6 GW of carbon-free electricity available up to 2030, drawing on a pipeline of renewable energy and storage projects under development.

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