Scatec CEO Terje Pilskog
Renewable energy company Scatec, financial services firm Standard Bank and asset management company Stanlib have established new renewable energy platform Lyra Energy to offer a low-risk, flexible commercial proposition to the private sector in South Africa.
Lyra is a private power solution that offers distributed access to high-quality, affordable and predictable utility-scale renewable energy to medium-sized and large commercial and industrial players.
“The name is derived from the constellation. Lyra signifies our dedication to illuminating a sustainable pathway for private sector power users in South Africa,” the partner companies say.
Lyra will offer private power supply to those previously unserved commercial and industrial power users in South Africa, specifically, users with significant electricity demands that do not justify the procurement and implementation of a dedicated large renewable energy project.
It will also provide clients with green energy certifications that are key to achieving individual and global net-zero goals, the partners say.
Lyra’s aggregator model will fund, build, own and operate generation assets of which output is competitively priced. The energy from these projects will be wheeled to multiple offtakers across the national grid.
Private sector customers or off-takers can expect increasing savings over time, especially if standard State-owned Eskom tariffs, which have risen by an average of about 14% a year over the past four years, continue to outpace inflation.
The aggregator enters the network use agreement between the generation assets and Eskom, with its transmission lines used to wheel power to the relevant location.
Each private sector customer will sign a standardised, fixed-tenor power purchase agreement (PPA) with Lyra which has been developed and tailored taking into account market trends and that seeks to address traditional risks and frictions associated with bilateral PPAs and the wheeling of energy.
Lyra's offering to the dynamic private sector energy marketplace is tailored to fit an underserved portion of the industrial and commercial segments.
Businesses are seeking market opportunities to reduce energy costs, achieve price stability and align with broader organisational climate ambitions.
“Matching generation from a pool of utility-scale renewable energy generation facilities to a collection of commercial and industrial power users allows Lyra to offer the benefits of large-scale renewable energy projects to smaller-scale users.”
These benefits serve to mitigate users' cost of energy supply relative to the utility as well as additional attributes of environmental credits and recognition of power expenditure in terms of preferential procurement requirements, the partners say.
“Lyra is underpinned by Scatec’s extensive, well-established development pipeline, including technical and operational services. The platform is in a strong position to leverage economies of scale, minimise risk and ensure successful, consistent generation of clean electricity,” comments Scatec CEO Terje Pilskog.
“As with other Scatec projects, the platform’s new utility-scale projects will be supported by an integrated business model, with a strong focus on long-term community impact and sustainable job creation,” he adds.
Scatec has an existing portfolio of mature renewable energy projects in development poised to be integrated into this platform to match private sector demand.
“In the context of climate change, which is one of the most pressing challenges of our era, Standard Bank stands behind a just energy transition for Africa that drives sustainable growth. This is a strategic investment that is aligned with our objectives to see South Africa’s national economy thriving in the medium- to long-term,” says Standard Bank Corporate and Investment Banking CE Kenny Fihla.
“The partnership will leverage Stanlib's insights and investment industry expertise in optimising operations and maximising long-term growth potential, as well as in navigating complex regulatory frameworks and market dynamics,” says Stanlib infrastructure investments head Greg Babaya.
“Our role is to mobilise much-needed capital from long-term investors, especially the retirement fund sector where we are key players, to help finance South Africa’s energy transition needs,” he adds.