Emerging South African energy group Earth & Wire, which aims to sell electricity directly to private customers, is positioning itself to build a 20 GW portfolio of grid-connected wind and solar projects by 2035 at an estimated cost of R500-billion.

Business development head Thomas Garner, who is also chairperson of the South African Independent Power Producers Association, reports that the company has secured over 400 000 ha of signed agreements with landowners on properties with sufficient solar and wind resources to meet the company’s target of supplying 30% of South Africa’s new electricity capacity by 2035.

The initial focus, however, is on a 2 GW portfolio of late-stage wind and solar projects, with grid connections, which Earth & Wire expects to implement in the coming four years.

The projects, which are in proximity to existing grid capacity, are located in the Eastern Cape, Gauteng and Mpumalanga regions.

“Importantly, the projects in Mpumalanga are ideally located for us to make a meaningful impact on the transition from coal to renewable power,” Garner says, indicating that the projects could help create thousands of jobs and support the just transition.

He argues that Earth & Wire’s project deployment (as well as those of other IPPs seeking to sell to private offtakers) could be immediately accelerated if the regulatory environment catered for projects proceeding in the absence of power purchase agreements (PPAs).

A recent reform enables distributed generators to build facilities of up to 100 MW in size without a licence, as well as to sell to multiple third parties and to wheel electricity over municipal and Eskom networks. However, the National Energy Regulator of South Africa still requires such projects to submit signed PPAs as part of a compulsory registration process.

Should this registration requirement be eliminated, Garner believes that between 5 GW and 10 GW of new IPP capacity could be built in the coming two years and begin supplying private consumers that are not keen to enter into multidecade PPAs.

Given Eskom’s current estimate that South Africa has a supply deficit of between 4 GW and 6 GW, an accelerated build-out of a new IPP capacity base on a merchant-market model could help ease current supply constraints and materially reduce the risk of load-shedding.

WaterBorne Capital’s Brett Levick, who is supporting Earth & Wire’s fundraising efforts, says discussions are under way with international funders and investors to secure the finance needed for the company’s R500-billion investment plan.

“This is a large number by any means, but certainly not out of reach, given the extent of the impressive Earth & Wire portfolio, their land assets secured for development, and the quantum of renewable power urgently required by the South African energy market,” Levick avers.

Head of brand strategy Bruce Paynter says the company will be making several announcements in the coming weeks, which will point to the prospect of South Africans having the “choice to buy reliable and affordable, clean electricity, from Earth & Wire, by 2025”.