Terra Firma to launch $73.8 million solar project, offering relief amid Eskom hikes

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October 15, 2024
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2 min read

The news: 

  • Terra Firma, a South African renewable energy company, has announced a landmark R1.3 billion ($73.8 million) solar project to mitigate rising electricity costs. 
  • This large-scale initiative will deliver a combined 110MWp of solar energy, leveraging the state utility Eskom’s grid via a financial model called "energy wheeling." 
  • Once completed, this project will provide significant cost savings and sustainability benefits to the country's commercial and industrial sectors, including manufacturing, extractive, and digital infrastructure industries.

Amid South Africa's electricity crisis and Eskom’s proposed tariff hikes of up to 43.55% by mid-2025, Terra Firma’s investment in renewable energy aims to offer a lifeline to businesses grappling with rising energy costs. 

The project, slated for two key sites in Gauteng — Hammanskraal and Rietfontein — will generate 87MWp and 23MWp of solar power respectively. These projects will distribute energy via Eskom’s grid under a mechanism known as "energy wheeling."

Energy wheeling allows the transport of renewable energy generated at one location to customers at another, through Eskom’s distribution system. 

Terra Firma's CEO, Grant Berndsen, emphasises that this model will save customers up to 40% on electricity costs. "Commercial and industrial customers will benefit from a low-carbon, cost-effective energy supply, especially as Eskom bills rise well above inflation."

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Eskom’s impending price increases are set to burden both direct customers and municipalities, making alternative energy solutions more appealing. 

Terra Firma’s energy wheeling model offers a flexible, off-site renewable energy solution. It will primarily serve customers with Power Purchase Agreements (PPAs), ensuring they benefit from the lower costs associated with renewable energy.

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By integrating this model with embedded generation systems (such as solar and battery energy storage), customers can optimise their energy strategies, maintaining supply for their daytime operations.

Terra Firma also provides corporate clients with flexible PPAs ranging from five to 20 years that provide energy cost stability while contributing to a greener economy. 

Besides, the company’s projects will incorporate smart metering systems at the generation and customer sites. Their proprietary software platform will track and reconcile energy consumption against utility tariffs, maximising cost savings. 

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Berndsen highlighted the importance of data-driven energy management, noting that the system enables customers to make informed decisions and harness technologies like artificial intelligence to boost efficiency.

The company eyes the second quarter of 2025 to reach a financial close for the project, followed by an 18-month construction period. The project is expected to go live by August 2026. 

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