Sustainable woodfibre products and solutions company Sappi's Southern Africa business and energy trader Enpower Trading have reached financial close on a five-year 175 GWh/y renewable-energy power purchase agreement (PPA).

Under the terms of the PPA, which was first announced in May last year, Enpower will source power from green energy solutions provider SolarAfrica Energy’s 1 GW Sun Central 1 solar PV project, which is being built near De Aar, in the Northern Cape, and supply electricity to Sappi's South African operations.

“Financial close of the Sappi PPA solidifies the foundation of this transformative agreement and underscores the strength of our innovative trading solutions.

“As pioneers of the five-year PPA tenure, Enpower Trading is thrilled to lead the way with this project, which represents the largest private five-year PPA to achieve financial close in South Africa. This accomplishment demonstrates the viability and scalability of shorter-tenure utility-scale agreements in catalysing renewable energy development,” says Enpower CEO James Beatty.

Enpower notes that the five-year PPA model offers an alternative to traditional long-term agreements, providing tenure flexibility that unlocks new opportunities for companies of all sizes to buy wheeled energy. 

“Enpower Trading’s approach to the five-year PPA model delivers further liquidity to the market by ensuring financial feasibility for developers for a wider range of projects than traditional long-term PPAs only, alongside delivering alignment with the business needs of energy offtakers like Sappi. We believe this model is a game-changer for the South African market,” Beatty enthuses.

Sappi Southern Africa CEO Graeme Wild comments that the PPA underscores the company's commitment to sustainable energy solutions, while also highlighting the remarkable progress being made in transforming South Africa's energy landscape.

"At Sappi Southern Africa, we are proud to be at the forefront of this transformative journey, driving innovation and fostering partnerships that will ensure a brighter, more sustainable future for all. 

"This agreement enables us to demonstrate leadership in sustainable business practices, reduces our reliance on fossil fuels and supports Sustainable Development Goal 7: Clean Energy," he adds.

SolarAfrica has started construction on the 342 MW Phase 1 of the SunCentral solar project. Phases 2 and 3 will take that capacity up to 1 GW.

Sappi estimates that the power supplied through the PPA with Enpower will reduce Sappi Southern Africa and the Sappi group's Scope 1 and Scope 2 emissions by 6% and 4%, respectively.

Sappi Southern Africa operates five production facilities in South Africa, with its Lomati and Ngodwana mills located in Mpumalanga and its Saiccor, Stanger and Tugela mills located in KwaZulu-Natal.