Vodacom announced on Wednesday that it has significantly advanced South Africa’s energy transformation process by becoming the first company to operationalise virtual wheeling fully.
By fulfilling a power purchase agreement (PPA) with SOLA Group, a prominent IPP (Independent Power Producer), the company has made significant progress in obtaining renewable electricity for commercial use and has set an example for other South African businesses to follow.
This milestone was accomplished by utilising renewable energy from SOLA’s solar power plant in Virginia, Free State province, and an agnostic platform created by Vodacom subsidiary Mezzanine.
“Executing this innovation is an immensely proud moment for Vodacom South Africa, and highly significant for the country’s future where energy is concerned. Virtual wheeling is a game-changer for companies like ours with distributed operations, removing long-standing barriers to access renewable energy. More importantly, this achievement demonstrates our purpose to connect for a better future – one where we protect the planet, accelerate the adoption of renewable energy, and contribute to the stability of the national grid,” says Sitho Mdlalose, Chief Executive Officer for Vodacom South Africa.
Benefits of the virtual wheeling
The innovative virtual wheeling solution provides a replicable roadmap for other companies to follow by allowing public and private sectors to participate.
This will result in cost savings, reduced greenhouse gas (GHG) emissions, grid stability, and jobs in the energy sector. By preventing load shedding, the extra renewable energy added to the grid helps lessen climate change’s effects and gives consumers a more reliable supply.
Vodacom Group wants to achieve net-zero GHG emissions by 2035, and virtual wheeling is essential. The company continues to invest in energy efficiency initiatives and cutting-edge renewable energy solutions, having recently met its goal of sourcing 100 per cent of its purchased electricity (Scope 2) from renewable electricity sources across its ISO50001 certified operations in Africa.
“Virtual Wheeling marks a pivotal moment in South Africa’s energy transition, and we are proud to be the independent power producer behind Vodacom’s first agreement of this kind. By enabling large, distributed businesses to access our renewable energy at scale and at lower cost, this innovation decarbonises operations and accelerates the shift to a cleaner, more resilient energy system. Our partnership with Vodacom on this milestone underscores the power of collaboration in unlocking the full potential of renewable energy for South Africa’s economy and its people,” says Simon Haw, Founder & Chairman of SOLA Group.
Vodacom and Eskom’s partnership on virtual wheeling
Vodacom and Eskom first collaborated in August 2023 to create the virtual wheeling mechanism, which circumvents the drawbacks of conventional wheeling. Mezzanine then developed the first virtual wheeling platform and evaluated it through a successful pilot program.
This solution, which uses smart metering to aggregate energy consumption across multiple consumption points, is now prepared for easy adoption by other energy users.
The virtual wheeling platform then reconciles the energy generated from an independent power producer (IPP) with the energy consumption data, allowing businesses with dispersed, complex operational footprints to access renewable energy on a large scale.
Additionally, this innovation enables adding more renewable capacity to the national grid without impacting Eskom’s balance sheet.
In traditional wheeling arrangements, an IPP and an offtaker use the national grid to transport energy in a one-to-one relationship. Despite being widely used worldwide, these models are unsuitable for businesses with a dispersed network of operations.
These infrastructure and geographic challenges had previously made it impossible for Vodacom South Africa, which runs over 15,000 low-voltage sites in 168 municipalities, to obtain large-scale renewable energy from IPPs.