Paper and pulp maker Sappi has started receiving renewable electricity at three of its South African sites. The power comes through a five-year power purchase agreement with Enpower Trading, Moneyweb reported.
The three sites are connected to the Eskom grid. Enpower Trading is supplying up to 16 gigawatt-hours of renewable electricity a month through its generation portfolio.
“This milestone reflects the power of strong partnerships and a shared commitment to finding practical solutions to complex challenges,” said Graeme Wild, CEO of Sappi Southern Africa.
Wild said the deal makes the company better able to manage its electricity needs. Wild said it also helps Sappi reach its goals on sustainability.
The JSE-listed company wants to spread its electricity supply across more sources. It also wants to cut the carbon emissions that come from its energy use.
According to the report, the agreement was one of the first and largest corporate renewable energy deals of its kind to reach financial close in South Africa. It was set up to give Sappi more certainty over what it will pay for electricity in the future.
Part of the electricity comes from SolarAfrica Energy’s SunCentral solar project in the Northern Cape. That project is expected to reach 1GW of generation capacity in the end.
A fourth Sappi plant, which is connected to a municipal electricity network, is expected to join the programme as it grows.
The deal took several years to reach the point where power could be delivered. Both companies had to deal with changes to regulations and to Eskom’s Retail Tariff Plan.
These included changes to time-of-use tariffs. According to Moneyweb, those changes affected the original business terms of the agreement.
Enpower Trading co-founder and CEO James Beatty said Sappi backed Enpower when it was a newly licensed electricity trader. At that time, its model had not been tested at this size.
Beatty said the milestone proves that a licensed trader can arrange supply, handle tariff and rule changes, and manage wheeling. Beatty said it shows a trader can deliver renewable power to a large industrial user.
Wheeling is when power made in one place is sent over the grid to a buyer in another place.
Sappi regional sourcing manager Lavendran Reddy said third-party renewable electricity is now part of the company’s daily energy supply. It sits alongside Sappi’s own power generation and its wheeling arrangements.
Enpower Trading’s majority shareholder is Azura Power, a pan-African power producer. Sappi makes everyday materials from wood fibre, which is a renewable resource.
The two companies are looking at expanding supply to more Sappi plants. They are also considering adding more renewable power sources, which could give third-party electricity a bigger share of the group’s energy mix.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.