Anna Hajduka, CEO Africa GreenCO Group

Africa GreenCo Group operates through its subsidiary GreenCo Power Services Limited. It functions as an intermediary off taker and service provider in the energy sector. The company procures power from renewable Independent Power Producers (IPPs) and sells this electricity to various entities. It targets utilities, private sector off takers such as commercial and industrial users, and markets within the Southern African Power Pool (SAPP).

GreenCo’s strategy includes mitigating the risk of purchaser default by securing alternative buyers or engaging in short-term trading on the SAPP electricity markets. A united and regionally coordinated effort is crucial even as Southern Africa faces the pressing electricity crisis.

The regional power crisis

Zambia is grappling with a substantial energy gap exacerbated by adverse weather conditions and intensified by a national emergency declaration. This mirrors the struggles experienced across Southern Africa. Load shedding is reaching up to 8 hours in various countries, including South Africa, Zambia, and Zimbabwe. It underscores the gravity of the situation, further exacerbated by the worst rainfall in two decades.

We are looking at a significant portfolio of 2000 megawatts of renewable energy capacity that we want to bring onboard in South Africa alone.

This collective crisis demands concrete actions to augment electricity supply. The call for immediate support from development partners is crucial, urging the release of climate change funds and collaborative efforts on decisive actions. The severity of the situation necessitates a united front, transcending discussions to implement bold, collective measures.

The urgency for power supply prompts a call to action directed at development partners, emphasizing the release of climate change funds and collaborative initiatives. This collective crisis demands bold, unified measures to navigate through this challenging period.

This collective crisis demands concrete actions to augment electricity supply. The call for immediate support from development partners is crucial, urging the release of climate change funds and collaborative efforts on decisive actions.

Interconnectedness and Regional based solution

At the core of addressing the electricity shortage is recognizing the interconnectedness of the region’s power needs. Initiatives like the Southern African Power Pool’s (SAPP) Regional Transmission Infrastructure Financing Facility (RTIFF), managed by Climate Fund Managers (CFM), gain heightened importance. Seeking US$1.3 billion in funding, RTIFF aims to improve electricity interconnection and cross-border transmission infrastructure across Southern Africa.

If South Africa’s plans proceed as anticipated by 2031, it will represent 27 per cent of the total installed capacity. Interestingly, though, when examining the predominantly coal-dependent installed capacity and the traded capacity on the competitive markets of the SAPP, 71 per cent of the traded capacity is hydroelectric.

Looking at the current deficit and crisis through a regional systems lens is of great importance, as regional collaboration aligns with the broader objective of ensuring a reliable and sustainable energy future for the region.

Moreover, the need for regional credit and supply/demand risk pooling and electricity trade becomes paramount in attracting funding for domestic generation and transmission requirements on an off-balance sheet basis. This collaborative approach offers the potential for off-balance-sheet funding, addressing fiscal constraints and making investments more bankable. With significant transmission needs in South Africa and the rest of the region, a regional strategy facilitates a more robust financial framework, pooling sovereign credit risk and most importantly demand and supply risk through regional trade.

The impact of trading within the SADC

We are very excited by what we see, mainly from the perspective of additional regulatory and policy clarity that’s coming up. Currently, there is no market into which to trade in South Africa. However, Eskom, which represents South Africa in the Southern African Power Pool, is a huge part of the Southern African power pool. So, what we do for some of our industrial clients in Zambia and what we do in the Southern African Power Pool (SAPP) equips us to bring those lessons and to continue the collaboration that we already have with Eskom as a member of the SAPP.

We are looking at a significant portfolio of 2000 megawatts of renewable energy capacity that we want to bring onboard in South Africa alone. We procure our generators through a procurement portal. It is important because we are trying to control appropriately where our loads are coming from and where our supply loads and demand loads are so that we can balance that portfolio appropriately. This is so that we can deal with the curtailment, transmission congestion, and other issues that are coming on board and that we can leverage some of the banking and balancing opportunities that we see from new hydro or other balancing market of the SAPP that may assist us in integrating or helping integrate more renewables to give that both certainty of supply and a more balanced portfolio to the industrial customers.

Looking at the current deficit and crisis through a regional systems lens is of great importance, as regional collaboration aligns with the broader objective of ensuring a reliable and sustainable energy future for the region.

We are enthusiastic about regional opportunities because currently, 81 per cent of the installed capacity in the Southern African Development Community (SADC) relies on coal, with approximately 14,000 megawatts slated for decommissioning. If South Africa’s plans proceed as anticipated by 2031, it will represent 27 per cent of the total installed capacity. Interestingly, though, when examining the predominantly coal-dependent installed capacity and the traded capacity on the competitive markets of the SAPP, 71 per cent of the traded capacity is hydroelectric. Thus, by opening up these balancing markets and linking them with South Africa, we can facilitate a significant absorption of new intermittent generation. From the perspective of system stability, this regional trade is crucial.

Value offered to the mining companies

We believe that procuring new renewables necessary for this journey must be carried out more efficiently, utilizing traders and aggregators. In South Africa, the market is rapidly evolving with anticipated regulatory and market opening changes. Currently, approximately 4.5 gigawatt hours are traded monthly on the day-ahead market of the Southern African Power Pool. Our goal is to procure new renewable energy capacity optimally to balance, blend, and aggregate supply to meet the gradual requirements of industrial customers based on their load profiles.

Without the ability to aggregate and compensate utilities that own the grids through various third-party services, significant increases in renewable energy generation in Southern Africa are unlikely. State utilities are burdened with challenges, facing limitations on adding more liabilities to their balance sheets. Additionally, the country’s fiscal situation is heavily indebted. To achieve the objectives of the Just Energy transition, third-party users and intermediaries between suppliers, generators, and industrial customers are essential.

To achieve the objectives of the Just Energy transition, third-party users and intermediaries between suppliers, generators, and industrial customers are essential.

We are particularly enthusiastic because assuming single-country or single-industrial buyer risks would entail significant liabilities for traders and aggregators. By adopting a regional perspective, we can diversify risk. Industrial and mining growth in the region is projected to increase by 41 percent across SADC by 2031. Diversifying risk on a regional basis and participating in the competitive markets of the Southern African Power Pool enables us to offer optimal services for industrial mining operations.

Sponsor of the Year at IJGlobal Awards

This esteemed recognition celebrates GreenCo’s pivotal role as a pioneer in regional electricity trading within Southern Africa.

The IJGlobal Awards, renowned for honoring infrastructure innovation and global excellence, took place at The Peninsula, London, on the evening of Wednesday, 6th March 2024.

Speaking at the award ceremony, our Chief Commercial Officer, Ms. Cathy Oxby emphasized our commitment to excellence, innovation, and sustainability in accelerating renewable energy development in Southern Africa, working closely with regional partners to drive positive change.

We are immensely proud to be acknowledged for our impactful contributions, and this award serves as a testament to the dedication of our team and partners in driving positive change in the energy industry.