Amidst blackouts, South African companies turn to renewable energy

South Africa's primary energy source is coal, accounting for about 80% of its energy mix. The phase-out of coal, deteriorating infrastructure, and global supply disruptions are major contributors to the country's current energy crisis, which is becoming more prevalent. In an effort to ensure energy security in the event of blackouts and to reduce dependency on the national grid, the country's manufacturing businesses are turning to renewable energy alternatives such as power purchase agreements (PPAs) with renewable energy providers or developing their own green energy projects. South African Breweries (SAB), BIC South Africa, and the Shoprite Group are capitalizing on the opportunity created by the government's decision to increase the license threshold for integrated generating projects from 1MW to 100MW in 2021.

SAB has signed a PPA with industrial-scale biogas waste-to-energy company, Bio2Watt, to supply electricity for SAP operations from its 4.8MW biogas plant situated at the Vyvlei Dairy Farm. SAP also aims to achieve 100% purchased renewables electricity at all manufacturing sites across Africa by 2025, and the PPA is a vital step toward achieving this goal.

Additionally, BIC South Africa, a stationery company, has embraced green energy. The company's production facility in Johannesburg now generates 100% of its electricity from renewable sources, making it a pioneer in the green energy transition. Meanwhile, other private sector firms, such as the Shoprite Group – Africa's largest grocery store – are ramping up renewable energy projects to minimize costs and emissions. The Shoprite Group has doubled its solar capacity in the last five years, building 22 new solar plants between February and September 2021.

As a result of the declining costs of renewable energy technology and the country's worsening energy situation, South African businesses – headed by manufacturers such as SAB, BIC, and Shoprite - will continue to pioneer green energy adoption, whether through PPAs or standalone projects.