Vodacom-Eskom deal may alleviate South Africa’s power problems

Vodacom-Eskom deal may alleviate South Africa’s power problems

For mobile operators, problems with the power grid can be expensive to manage. Now Vodacom in South Africa has announce a novel solution. It’s called virtual wheeling.

In what is described as a first in South Africa, Vodacom has signed a virtual wheeling agreement with state-owned power supplier Eskom that, it claims, will help accelerate efforts to solve the country’s energy crisis.

This agreement will enable Vodacom to secure independent power producers (IPPs) under the same terms and conditions that underpin its agreement with Eskom.

Traditional wheeling typically involves a one-to-one relationship between an IPP and a buyer using the national grid to convey their energy. But Vodacom South Africa has over 15,000 distributed low-voltage sites across the country that are linked to 168 municipalities. This complexity has prevented Vodacom from accessing large scale renewable energy from IPPs.

The virtual wheeling solution apparently addresses these challenges, removing complexity, using technology to solve legacy limitations, allowing Vodacom to access renewable energy with a sound business case and encouraging private participation to help solve the energy crisis. Vodacom’s aim is to source 100% of its electricity demand from renewable energy sources by 2025.

After a successful pilot phase, the newly co-developed solution is now accessible to the public and private sector on a larger scale. With the agreement now signed, Vodacom will, it says, be able to add more capacity to the grid without impacting Eskom’s balance sheet, while helping to reduce its greenhouse gas emissions. 

The blueprint provides an easy-to-follow roadmap for others in the private sector, effectively involving those who want to benefit from cost saving in the process of stabilising South Africa’s grid and reducing overall emissions.

How serious is Vodacom’s power problem? Well Vodacom South Africa spent more than R4billion (about US$212 million) on backup power solutions and R300million (US$15.9 million) in the past financial year alone on operational costs such as diesel for generators.


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