Teraco to build $106 million solar facility to combat South Africa’s power woes

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February 21, 2024
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2 min read
Teraco's team

The news: 

  • Teraco, an African carrier-neutral colocation provider, has said it wants to construct a 120-megawatt (MW) utility-scale solar photovoltaic (PV) energy facility in the Free State province of South Africa to power its data centres as the country’s power woe persists.
  • Jan Hnizdo, CEO of Teraco, stated the company secured its first grid capacity allocation from Eskom, South Africa’s public electricity utility. 
  • The vendor-neutral data centre provider will spend approximately R2 billion (~$106 million) to complete the solar plant project, which will be up and running in 18 months. 

Teraco notes that the grid capacity allocation from Eskom will enable it to connect its proposed 120MW solar facility to the national electrical grid. The generated power will, in turn, be wheeled across Eskom and municipal power networks down to Teraco’s facilities across the country. 

Teraco asserts the 120MW solar PV plant is expected to produce over 338 000MWh annually once it becomes fully operational.

As state-owned Eskom, which supplies about 95% of South Africa’s electricity from coal-fired power stations, continues to struggle to provide energy, companies within the country have shifted their focus to finding alternative energy sources. 

Eskom's load shedding in recent years has significantly impacted business operations and the Southern African economy. Mining and telecom companies are choosing to separate from the financially troubled Eskom to mitigate the detrimental effects of load-shedding.

To keep on with its operations despite Eskom’s power shortcomings, Teraco stated that it spent “millions” of rands monthly on diesel for generators to run its data centres. 

“Over the past two years, our uptime has been 100%, but grid availability has been around 15% and at some sites at about 20%. So we needed to supplement that with diesel, and it’s a huge cost. I can tell you it costs millions of rands in a month. It’s a huge cost to us,” Hnizdo explained.

This development comes as the vendor-neutral data centre provider expands its presence in South Africa. Currently, the company has a critical power load capacity of 186MW, which includes the Isando Campus JB1/JB3/JB5 (70MW), the Bredell Campus JB2/JB4 (64MW), the Cape Town Campus CT1/CT2 (50MW), and Durban (2MW).

CEO Hnizdo stated that the grid capacity allocation is a significant step towards the company's renewable energy vision and meeting the needs of its customers. He added that Teraco has been working on getting these approvals for a few years, and the goal now is to execute it promptly. 

To develop the 120MW solar PV plan, Teraco has partnered with Juwi Renewable Energies South Africa and Subsolar. While the former handles design and manages procurement, construction, and commissioning, the latter oversees the installation. 

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A green loan has been secured to finance the project, according to the company.

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