Aggregators use the transmission and distribution grid to wheel power from generation points to consumption sites, and by combining the demand of multiple customers into a single large volume, they can negotiate better tariffs and terms with IPPs. In this model, the offtake risk is borne by the aggregator and not the generator. This has opened up wheeling opportunities to private companies looking for affordable clean energy and to expand their existing embedded generation. As the energy availability stabilises, the growing capacity of solar PV and other forms of renewable energy is
expected to create further opportunities for the private sector in electricity trading and wheeling. Aggregators have become an interesting cog of the commercial and industrial sector and will be an increasingly vital part of the energy transition as the market liberalises. They promise to provide users with reliable, cheaper energy, adding new capacity that supplement grid electricity. While the number of aggregators is difficult to ascertain, notable players in the space include Africa GreenCo, PowerX, Energy Exchange, and Etana Energy.
CASE STUDY Private bank financing to support the expansion of a C&I portfolio In November 2023, Nedbank CIB, with other institutional partners, closed a ZAR2.5bn ($132m) consolidated finance facility to assist Pele Green Energy (PGE) advance 1.1GW of renewable energy projects and build its project portfolio to 5GW by 2027. Nedbank’s share of the facility was ZAR1bn. The facility replaced PGE’s previous capital-raising frameworks that operated on a project-by-project basis. The loan included a preference share clause allowing the lenders to benefit if PGE increases in value. As with most of its energy transactions, Nedbank acted as the mandated lead arranger, underwriter and bookrunner. The removal of the cap on the amount of energy IPPs can produce gave the developer an opportunity to move quickly to help alleviate pressure on the national grid. To make good on this opportunity, PGE needed a mezzanine and innovative funding solution to streamline the delivery of its project pipeline. It turned to Nedbank CIB to structure the bespoke transaction. It provided PGE with a capital base enabling it to deliver the Just Energy Transition as well as benefits from the cross- collaterisation of different technologies, including those for wind and solar generation and battery storage. About 80% of the projects that PGE plans to develop are for the private sector, with the rest being developed through bids in government procurement programmes to supply the national grid. Flagship projects in PGE’s growing portfolio include the 100MW Sonvanger Solar Power Plant and 100MW Pofu Solar Power Plant where PGE is the lead and sole shareholder as well as its 47% equity interests in the 75MW Grootspruit and 75 MW Graspan Solar Projects.
11
South Africa’s Energy Prospects
Made with FlippingBook - Share PDF online