2022 was a year of change for EGP South Africa with various renewable energy projects completed, thereby helping the country to meet its growing energy needs. Under the guidance of country manager Manuele Battisti, in 2023 EGP will intensify its development activities, start construction of new projects and optimize operating activities as South Africa continues its energy transition journey.
EGP South Africa’s Soetwater wind farm entering into commercial operation in July this year was a seminal moment for the company. It brought the number of its operational projects to 12 with a managed capacity of over 1.2 GW. With the projects now online, the company’s priority is to optimize the efficiency of each of these plants.
Furthermore, following the announcement of the outcome of Bid Window 6 of the Renewable Energy IPP Procurement Programme (REIPPPP), Enel Green Power South Africa was successfully appointed a preferred bidder for two of the five solar projects, with a combined contracted capacity of 300MW.
“The awarding of the Kutlwano and Boitumelo solar power plants not only increases EGP South Africa’s market share and capacity, but also cements the company’s position as a leading Independent Power Producer (IPP) in the South African Renewables industry,” Manuele Battisti, country manager South Africa says.
On the developmental side, there are two main avenues the company intends to explore in the future. The first entails its continued participation in the REIPPP Programme and the second involves increasing its client base among Commercial and Industrial (C&I) off-takers.
Expanding on the second aspect of the developmental agenda, Battisti says there are growing opportunities within the C&I market. “We are in advanced discussions to enter into bilateral Power Purchase Agreements (PPAs). This will enable us to sell electricity directly to C&I customers throughout the country. Thanks to Enel Green Power’s global experience in private PPA and its DNA as a large utility, we are setting benchmarks for private transactions in South Africa that can speed up the deployment of additional renewable energy.
Challenges
In 2022, the economic aftershocks of Covid-19 continued to reverberate throughout the industry while recent geopolitical conflicts have presented an additional set of obstacles. The pandemic and lockdowns severely hampered the construction of existing projects. Logistics and delays were commonplace during this period, making the supply and transportation of materials challenging, to say the least.
“In the past, offers from a supplier would be valid for a month or two. Nowadays, because of the uncertainty and rapidly changing macroeconomic factors, validity offers last for even less than a day. This increases the value of an industrial operator like Enel Green Power which links the needs of suppliers and clients and makes project planning effective,” Battisti adds.
Managing perceptions around renewable energy
There is empirical evidence that renewable energy sources offer cheaper, quicker-to-deploy and more reliable alternatives, especially in countries such as South Africa, where abundant wind and solar resources help meet the country’s energy needs with a holistic approach.
“As a company that deals with renewable energy from every perspective, we have a responsibility to raise public awareness about the importance of sustainability. Currently, renewables can be further supported to meet South Africa’s energy needs by advancing technologies such as battery energy storage systems (BESS),” Battisti goes on to say.
The green economy also promises direct and indirect employment and skills training opportunities along the value chain. For context, at the peak of the construction of its Karusa and Soetwater wind farms, Enel Green Power had 1,160 employees on site, performing a host of services from general maintenance to alien vegetation management.
“Ensuring that South Africa has reliable energy will foster the economic growth that both businesses and ordinary citizens are desperate for,” Battisti adds.
2023 expectations
Battisti foresees that the rising cost of electricity and the need for carbon footprint reduction will likely increase commercial and industrial demand for power from IPPs in 2023.
In the broader industry there is a belief that the much awaited structural changes to the national power utility Eskom will take place, marking an important evolution of South Africa’s energy market with the creation of new and additional competencies and jobs.
“As Enel Green Power, we believe the rainbow nation is greener than ever and we are united with South Africa in its Just Energy Transition journey. On this journey, we are committed to developing strong relationships with all stakeholders including consumers, partners, investors, institutions and local communities. Our goal remains consistent: enable progress with sustainable energy,” Battisti concludes.
