By Lebone Rodah Mosima
Eskom has launched a renewable-energy business aimed at supplying large industrial customers with low-carbon power.
This positions the state utility to compete for mining and manufacturing clients as South African exporters face growing pressure to cut the carbon footprint of goods sold into overseas markets.
The state-owned power utility said Eskom Green would accelerate the development of utility-scale renewable energy projects and support larger power users in meeting decarbonisation and energy-transition goals.
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The launch comes as carbon-content requirements, including the European Union’s Carbon Border Adjustment Mechanism, increase pressure on exporters in carbon-intensive sectors such as steel, aluminium, cement, fertilisers and other industrial products to account for embedded emissions.
Group Executive for Eskom Renewables, Rivoningo Mnisi, said: “Eskom Green is a utility-scale renewable energy business that rapidly accelerates the options available to South Africa’s industries to decarbonise and transition industrial and productive capacity to maintain export competitiveness.”
“The business is set to increase the supply of renewable energy to enable customers to lower the carbon footprint of their energy consumption.”
Eskom said the new business was designed after global benchmarking research on more than 20 utilities.
It said its research showed that renewable-energy development required agile decision-making, access to diverse sources of capital, partnership-based delivery models and bankable project structures.
It said these requirements differed significantly from Eskom’s legacy vertically integrated generation model.
Eskom Group Chief Executive Dan Marokane said the launch was not only about complying with carbon-content requirements, but also about delivering energy solutions at scale for customers implementing decarbonisation strategies.
“This new entity is built on decades of power generation skills and expertise which the nation has invested in, and Eskom Green reflects successful adaptation to new technologies within Eskom,” Marokane said.
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“We have been playing in this space for some time, and we are now putting a stake in the ground – this is a development that South Africa can be proud of.”
Eskom said Eskom Green formed part of its unbundling strategy and would be separated into a wholly owned subsidiary with an independent board, subject to governance, regulatory and shareholder approvals.
The country is reforming its electricity market and preparing for the South African Wholesale Electricity Market, which is expected to open the sector to more competitive trading arrangements.
Eskom said Eskom Green would seek to become customers’ primary energy provider by contracting directly with large users for their core renewable-energy requirements.
“The customer contracts with Eskom Green for its core renewable energy requirements, and Eskom Green takes responsibility for delivering against that requirement using its own renewable generation, supplemented by storage and firming arrangements that support around-the-clock supply where the customer needs it,” Eskom said.
“The pricing determination will be clear and transparent where the wholesale tariff is passed through to the customer at cost.”
Eskom said network charges, wheeling charges and regulated wholesale charges would be reflected separately from the energy price charged by Eskom Green, giving customers transparency on payments for energy and network use.
It said Eskom Green’s first phase would target large industrial demand in mining and manufacturing through Section 34 Integrated Resource Plan allocations and direct bilateral power purchase agreements.
A second phase would target the Eskom Distribution market, including customers on the network through the eDX Edge offering, as well as the South African Wholesale Electricity Market as it develops, the Southern African Power Pool, and municipalities.
“Under a take-or-pay structure, the customer commits to a fixed volume and pays the agreed price whether the energy is consumed or not, giving Eskom Green the firm revenue base that anchors Special Purpose Vehicles (SPVs),” Eskom said.
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“As the Eskom Green portfolio scales, aggregation, ancillary services, and wholesale market participation will be added to the service offering.”
Eskom Green will focus mainly on solar photovoltaic projects, supported by battery energy storage systems, pumped storage and wind energy, from which it expects to achieve a 2GW operational goal.
The utility said that since the 2019 Integrated Resource Plan, only about half of awarded renewable projects with grid allocation and power offtake agreements had been built.
Eskom said this highlighted the need for better coordination to ensure energy security while meeting emissions-reduction targets, and showed the market demand for large-scale decarbonisation solutions.
It said Eskom Green’s entry into the market would be collaborative and complementary, working alongside private-sector players to help bridge the generation-capacity gap outlined in IRP 2025.
The utility said Eskom Green would have about 6GW of carbon-free electricity available up to 2030, supported by its pipeline of renewable-energy and storage projects.
