Cennergi Holdings Ltd (Cennergi), a wholly-owned subsidiary of diversified mining and renewable energy company Exxaro Resources (Exxaro), has welcomed the registration of its 80MW Lephalale Solar Project (“LSP”) by the National Energy Regulator of South Africa (NERSA) and the Regulator Executive Committee earlier this week. LSP is the first phase of the decarbonisation of Exxaro’s flagship Grootegeluk mine at Lephalale in Limpopo province.
The Managing Director of Energy at Exxaro & Cennergi, Roland Tatnall, expressed the company’s excitement at this milestone and its role in accelerating Exxaro’s target of carbon neutrality by 2050.
“The team worked incredibly hard to ensure LSP was one of the first large renewable energy projects to receive registration through the streamlined NERSA process in a record time of 47 days.
Following the announcement of our renewable energy strategy to the market in September 2021, we have developed a significant pipeline of multi-technology (wind, solar and storage) solutions that will provide decarbonisation, energy security and cost reduction benefits to Exxaro and other private customers. And in line with the memorandum of understanding we executed with Eskom last year, we are advancing a comprehensive renewable energy solution for Exxaro’s presence in Mpumalanga which we hope will provide a blueprint for the Just Energy Transition in the province.”
Cennergi believes that LSP is one of the largest project financed behind-the-meter renewable energy projects in South Africa at such an advanced stage. A long-term power purchase agreement will govern the sale of electricity between Cennergi and the Grootegeluk Complex. The project has been fast-tracked to enable a reduction of up to a third of the mine’s Scope 2 emissions and significant electricity cost savings but is only the first phase of a multi-technology solution designed specifically for the mine’s demand profile. Subsequent phases including storage and wheeled wind are at an advanced stage of development.
Exxaro commenced its renewable energy journey in 2009 when it initiated the development of a wind project in South Africa’s Eastern Cape province. This culminated in the establishment of Cennergi (Pty) Ltd alongside Tata Power in 2012. Exxaro then acquired Cennergi (Pty) Ltd outright in 2020 in order to accelerate its diversification into renewable energy. The Cennergi group subsequently became one of the largest locally-owned independent power producers (IPP) and asset managers in South Africa.
Cennergi has two operating wind projects in the Eastern Cape totalling 229MW which sell renewable electricity to Eskom through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and manages a further nine distributed (“micro”) solar projects developed in 2018 that provide renewable electricity to communities across South Africa.
Cennergi’s strategy is to be a leading international renewable energy solutions business providing services to, and developing, owning and operating renewable assets for utilities and private clients in South Africa and diversifying into other markets.
According to Tatnall, increasing the ceiling for the registration of private distributed power projects from 1MW to 100MW last year and NERSA’s success in registering over 400MW of these projects in a matter of weeks demonstrates the government’s commitment to enabling the private power sector outside the boundaries of REIPPPP.
“Procuring a Generation License used to be quite challenging and time consuming. The threshold increase was welcomed when it was announced by President Ramaphosa a year ago. In addition to continued support from the Department of Mineral Resources and Energy Minister, Gwede Mantashe, in executing the amended Schedule 2, and the success of Project Vulindlela in improving procedural efficiencies, NERSA should be commended for accelerating the deployment of renewable energy that will help alleviate South Africa’s energy challenges” Tatnall concluded.