Opportunity Issue 108

POWER SOLUTIONS
Vodacom is aiming for 100% renewables electricity sourcing by
2025. CREDIT: Zbynek Burival, Unsplash
to the national grid, all without impacting Eskom’s weak balance
sheet. This is a technological innovation that every business in the
country should be actively exploring which, if scaled properly,
could significantly reduce or even eliminate loadshedding in South
Africa in the next few years.
Virtual wheeling
This Vodacom innovation, which has been co-developed with
Eskom, has been dubbed “virtual wheeling”. Unlike traditional
wheeling, which (apart from a few exceptions) entailed a oneto-one
relationship where a single IPP generates power into the
grid and wheels the power to a single site (buyer), virtual wheeling
enables multiple IPPs to generate power into the grid and wheel to
multiple sites for a single buyer. The platform that was developed
enables a buyer to aggregate all of its consumption into timeof-use
periods as a single account which is then matched, in timeof-use,
with the aggregated generation by one or more IPPs.
In our case, we will partner with renewable IPPs, who will feed
the generated power into the grid. The IPP and our sites will be
metered and the metered data will feed into the virtual wheeling
platform which we have built using our subsidiary Mezzanine.
The Vodacom Energy Management System collects various
consumption data points across a period, feeding this information
to the Virtual Wheeling Platform. As long as the generation is lower
or equal to the aggregated consumption, Vodacom will receive a
refund from Eskom.
Importantly, implementing this solution did not require any
amendments to existing electricity supply agreements and it does
not impact the municipalities in any way.
As a purpose-led company, we believe that it is important to
make a positive impact in the societies and environments that
we operate in. There is, however, one remaining, unaddressed
challenge for virtual wheeling. Eskom only refunds the buyer in
virtual wheeling for consumption in municipalities who are in good
standing. A mechanism is, therefore, required to “ring-fence” the
electricity income in a municipality to provide security for Eskom.
For Vodacom, virtual wheeling is a key step towards achieving
our own decarbonisation goals. For the country, it’s one of many
steps towards resolving the energy crisis and enabling the
migration to sustainable and renewable-energy generation plants.
We have estimated that this approach will initially move 30% of
our consumption to renewable sources, a significant step towards
Virtual wheeling enables multiple power producers to generate
power into the grid and wheel to multiple sites for a single buyer.
CREDIT: Kirchoff, BrandSA
our goal of 100% renewables electricity sourcing by 2025. Beyond
consumer interest, other sectors have come forward with potential
complementary solutions which will help to mitigate the existing
risks associated with this model.
Among these concerns is how Eskom tariff increases over
the term of a power-purchase agreement will affect the margin
between the rate of the refund (which is currently based on
the wholesale electricity pricing system, WEPS, tariff structure)
and the cost of energy from the IPPs. Hopefully further testing
and investment will sufficiently address any concerns over the
commercial sustainability of this approach.
Beyond loadshedding
While opportunities are created with additional renewable
power, interim solutions are still required to address the high
usage of diesel for power generation. A whole economy for green
hydrogen can be created with renewable power and hydrogen
as a replacement for diesel combustion is ideal. This means that
purpose-led companies like Vodacom are on the continuous
lookout for renewable power and alternative fuels, but most of
the solutions have various limitations, which make the application
in our industry limited and less attractive. Innovative thinking and
contextualised solutions to address these challenges could disrupt
the industry, revitalise South Africa’s economy and create a more
inclusive future for us all.
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