Trailblazing private power plan in the works
Growthpoint CEO Estienne de Klerk says agreement with energy trader Etana is a ‘game-changer’
The likes of ourselves won’t be beholden to Eskom at all, other than doing a deal with their transmission facilities
Estienne de Klerk, CEO of Growthpoint, South Africa’s largest commercial property company, says a pioneering power purchase agreement with energy trader Etana to wheel energy to their shopping malls and office blocks will be a game-changer in terms of carbon neutrality and loadshedding.
“It allows us to acquire specifically green energy from multiple sources and supply it to multiple jurisdictions across the country,” he says.
The sources include a hydroelectric plant they’re developing with Serengeti Energy using water from the Ash River in Clarens in the Free State, and wind and solar plants they’ve developed and are developing in the Western Cape.
Together they’ll generate 195GWh of renewable energy a year by mid-2025, enough to meet 32% of the 612GWh their tenants consumed in 2023. This will help them meet increasingly urgent carbon neutrality targets, De Klerk says.
“All corporates have an ESG [environmental, social and governance] mandate to be carbon neutral as soon as possible. If we’re providing them with green power, they get the credits.”
From this point of view alone “it’s quite a big game-changer”, he says. Not least for Growthpoint, because it will differentiate their buildings.
“If you had a choice between a Growthpoint building and a competitor’s building, you’d want the one that can give you green power.”
They would also be less prone to loadshedding.
The wind and hydro power they’ll wheel to their buildings with the help of Etana are baseload solutions able to provide sustainable power 24/7, making the end of loadshedding at their malls and office blocks distinctly feasible.
But De Klerk concedes this will not happen in the short term. Whether they’re adding 195GWh capacity or not won’t change Eskom’s behaviour in terms of loadshedding any time soon.
“In the short term it won’t solve the problem for my buildings in Sandton in terms of being off the grid. Yes, we’ll be providing power into the grid and adding more capacity, but if Eskom is switching off Sandton, they’re switching off Sandton irrespective of us generating power.”
Growthpoint’s challenge in an area such as Sandton is that they have 10 or so buildings among other points of supply that aren’t part of the agreement with Etana.
The chances of ending load-shedding are better where Growthpoint has a precinct or cluster of buildings with a specific point of supply on the network.
This will allow them to argue that, as they’re adding capacity to the grid, this area should not be load-shed because it’s “all Growthpoint”.
“You can maybe do a deal on a specific area where you get it off the grid and free it from load-shedding,” says De Klerk.
The area he has in mind is the 123ha
V&A Waterfront in Cape Town, which Growthpoint owns jointly with the Government Employees Pension Fund.
However, when a private energy distributor had enough solar to get Frankfort in the Free State off the grid last year and end load-shedding, Eskom went to court to stop it from happening.
The difference, says De Klerk, was that the private power producer was up against an ANC municipality which opposed their application.
“Which is bizarre. You’re in a position to take all your people off load-shedding and you don’t support the power producer in their quest to do so.”
Growthpoint’s chances of getting V&A
off the grid would be far better.
The City of Cape Town is progressive and understands the link between economic growth, living standards, jobs and taxes, and the provision of power, he says.
“They understand that if you don’t have energy you can’t run a business, so they are actively looking for generators like a Serengeti together with Growthpoint to come and say, ‘We’re going to be adding to capacity, we’ve got wind farms in the
Western Cape, we’ve secured transmission capacity, we’re going to be wheeling it into Cape Town and supplying our buildings at V&A.’”
Unlike Frankfort, Cape Town is open to looking at solutions “because they’re very keen to end load-shedding”.
It’s because of this attitude that Growthpoint expects to make quicker progress towards their ultimate goal of energy independence for their tenants in Cape Town than elsewhere.
They were the first to test the wheeling principle on Cape Town’s distribution grid last year, wheeling energy from a solar plant at their Constantia Village shopping centre through the Cape Town distribution grid to their Hans Strijdom office building on the Foreshore, which is home to Investec and Ninety-One.
“That was the last key we needed, because it means we can finally get power to our buildings effectively. We’ve been working on all the issues and solutions for over a year. Getting power to the buildings and wheeling it through the municipality’s grid is key.”
De Klerk believes that with Etana’s help they’ll soon be “opening up” other metros,
such as Nelson Mandela Bay, Johannesburg and Ekurhuleni. But apart from the V&A Waterfront, the end of load-shedding is likely to remain a distant goal.
“I believe over a short period of time we’ll be able to get V&A as a precinct on its own with one supplier, off the grid.”
As for their other tenants, he cannot say that next year they will be less exposed to blackouts because of Growthpoint’s wheeling agreements, “because we do not control the blackouts, Eskom imposes rolling blackouts. Whether we’re adding capacity to the grid or not it doesn’t secure us against blackouts at this point.”
But one mustn’t underestimate the pace at which the private sector will start providing power to themselves now that this last hurdle of access to distribution has been resolved, he says.
“That was always the final key for us. If you can get transmission capacity, and if you can wheel through the distribution grid, then it opens the door for private generators to enter into deals with the clients themselves.
“The likes of ourselves won’t be beholden to Eskom at all, other than doing a deal with their transmission facilities.”