JSE-listed real estate investment trust (Reit) Growthpoint Properties has entered into a power purchase agreement (PPA) with electricity trader Etana Energy for 195 GWh/y of renewable energy, which represents 32% of its total current yearly electricity consumption, which was 612 GWh in its 2023 financial year.

The company signed the PPA in November 2023 to wheel electricity to its commercial property buildings in several jurisdictions across the country. Further, the generation profile will be relatively flat over a 24-hour period owing to it consisting mainly of wind power and a smaller hydropower generation component.

This agreement has set in motion the country’s first multi-jurisdiction, multi-building, multi-source renewable energy wheeling arrangement, and will enable Growthpoint’s tenants to access green energy and reduce their carbon footprint, the Reit points out.

Etana will cover 70% of the power consumed by Growthpoint’s participating buildings and, in some buildings, Growthpoint will be able to provide its tenants with the ability to buy 100% renewable energy and actively drive carbon emissions reductions.

“The wheeled renewable energy will mainly consist of wind, with a smaller component of hydropower from [renewable energy developer] Serengeti Energy and large-scale solar electricity. The combination of generation sources allows for a high coverage of Growthpoint’s energy use, as electricity is generated throughout the day and night,” says Growthpoint Properties South Africa CEO Estienne de Klerk.

“This initiative significantly advances Growthpoint’s progress towards our climate commitment of being carbon neutral by 2050. We are extremely pleased to collaborate with energy innovators like Etana and Serengeti to support our tenants to reach their own environmental goals by giving them access to renewable energy,” he adds.

Further, owing to the agreement with Etana Energy, Growthpoint has exclusive rights to buy all of the about 30 GWh that will be generated yearly by a 5 MW hydroelectric power plant developed, owned and operated by Serengeti Energy.

The project is situated on the Ash river within the Lesotho Highlands Water Scheme (LHWS), close to Clarens in the Free State, and provides the added benefit of effectively generating 24/7 baseload power.

HYDROPOWER
Meanwhile, Growthpoint has also shown an interest in investing in the power plant by signing a memorandum of understanding with Serengeti Energy, which owns and manages renewable energy projects of up to 50 MW of mainly hydropower plants in sub-Saharan Africa, and currently operates nine plants in five countries.

While initially targeted for South Africa's Renewable Independent Power Producer Procurement Programme, which contributes private sector-produced electricity to the national grid, Serengeti’s focus for the Ash river hydro plant shifted and it advanced the project for the commercial and industrial sectors.

“Hydro as a technology most definitely has a role to play in the energy mix in South Africa. It is encouraging for our sector to have concluded a PPA with Etana and Growthpoint, supporting appreciation for this technology not only for industrial use but also in the commercial sector,” Serengeti Energy MD Strafford Harris says.

The project is being built on the water transfer scheme between Lesotho and South Africa, within the LHWS and positioned to produce reliable baseload power. It is also well placed to capitalise on the LHWS Phase 2 future expansion, he points out.

The hydroelectric power plant has reached financial close and is currently under construction. The commercial operations date is expected to be July 1, 2025, when it will supply its first electricity to Growthpoint, wheeled via the Eskom grid and traded through Etana.

“We are excited to be partnering with Growthpoint and Serengeti to help address South Africa’s electricity crisis and reduce the carbon intensity of our energy system. Business has a clear role to play in solving our biggest challenges, and this is a highly replicable and scalable example of how to achieve this while creating value for all involved,” says Etana Energy director Reyburn Hendricks.

Etana has partnered with independent power producers on multiple ready-to-build wind, hydro and solar projects with secured grid connections, which will come online over the course of 2025 and 2026, he adds.