Energy trader Enpower Trading and solar energy firm SolarAfrica Energy have signed a 20-year power purchase agreement (PPA) to deliver up to 100 MW of renewable power supply.

The PPA is the first contract secured for Enpower Trading, which has secured a licence from the National Energy Regulator of South Africa.

SolarAfrica has evolved from a specialist provider of rooftop photovoltaic systems, to a full-service provider of capital expenditure-free green energy solutions, ranging from solar and battery storage options, through to wheeling to the commercial and industrial market.

SolarAfrica’s latest solar development further positions the business as a competitive player in the newly enabled wheeling space, which facilitates the transport of power across the national and municipal grid networks to be consumed in another location.

“Having signed similar deals with end consumers, we are excited about the dynamic that trading brings to our business and the market.

“Trading entities are a new market for us. The value of aggregation allows independent power producers (IPPs) to benefit from economies of scale and essentially provides bankability for smaller consumers to gain access to renewable energy on a larger scale,” says SolarAfrica CEO David McDonald.”

He adds that SolarAfrica looks forward to signing more agreements of this nature as the market expands.

Not only will the PPA assist Enpower Trading to deliver a utility-scale green energy solution, but it will alleviate the generation shortfall in South Africa and reduce the need for loadshedding over time.

It also fits into the trading model which facilitates the transportation of electricity on behalf of IPPs to multiple offtakers.

This business model is based on ensuring municipalities that operate on the local distribution grids remain revenue-neutral, while providing customers with reduced energy tariffs.

“This is the first step toward unleashing the merchant market where demand is met through dynamic trade.

“We are excited to demonstrate the risk reduction that the trading model brings to SolarAfrica as an IPP, by providing a diversified customer pool, alongside energy contracts that are more flexible and affordable for the South African market,” says Enpower CEO James Beatty.