Teraco, a prominent African co-location provider that maintains carrier-neutral status, has expressed its intentions to build a utility-scale solar photovoltaic (PV) energy facility with a capacity of 120-megawatt (MW) in the Free State province of South Africa. This new energy source is intended to power its data centres as South Africa continues to wrestle with energy crises.
Jan Hnizdo, Teraco’s CEO, has confirmed that the company has successfully secured its first grid capacity allocation from Eskom, the country’s state-run electricity utility provider.
This project, which will cost roughly R2 billion (around 106 million USD), will establish a solar plant that will be fully functional within a year and a half. Teraco emphatically notes that the allocation they received from Eskom will allow them to connect their new 120MW solar facility to the national electrical grid. The energy thus generated will then be transported across Eskom and municipal power networks to power Teraco’s facilities spread across the country.
Once fully operational, Teraco estimates that the solar PV plant will generate over 338,000MWh annually. These developments are in response to the flagging Eskom, the state-owned company that supplies about 95% of the country’s coal-powered electricity, which has been struggling to meet energy demands. This situation has led many firms to seek alternative energy sources.
Eskom’s frequent power cuts (popularly known as “load shedding”) over recent years have heavily destabilized business operations and the broader Southern African economy. To reduce the harmful effects of these constant power cuts, many mining and telecommunication companies are choosing to distance themselves from the financially troubled Eskom.
Teraco, warranting the smooth operation of its data centres in the face of power supply issues from Eskom, has revealed that it spends millions of rands on diesel every month to keep its generators running.
Jan Hnizdo, CEO of Teraco, revealed the extent of their dependency on diesel, stating, “Over the past two years, our uptime has been 100%, but grid availability has been around 15% and at some sites at about 20%. As a result, it was necessary to supplement with diesel, and it’s not cheap. We’re talking about millions of rands in a month. It’s a substantial cost for us.”
This revelation comes at a time when Teraco, known for being a vendor-neutral data centre provider, is aiming to broaden its footprint in South Africa. At present, the company boasts a critical power load capacity of 186MW. This includes capacity from different campuses across various regions, specifically the Isando Campus JB1/JB3/JB5 with 70MW, the Bredell Campus JB2/JB4 with 64MW, the Cape Town Campus CT1/CT2 with 50MW, and Durban with 2MW.
Teraco’s CEO, Jan Hnizdo, has highlighted that the allocation of grid capacity is a considerable milestone towards achieving the company’s vision for renewable energy and satisfying customer needs. He stated that Teraco has been striving to secure these approvals for a few years, and the focus is now on swift execution.
For the development of the 120MW solar PV project, Teraco has formed partnerships with Juwi Renewable Energies South Africa and Subsolar. Juwi Renewable Energies South Africa is tasked with the design management, procurement, construction, and commissioning, whereas Subsolar is responsible for overseeing the installation.
According to Teraco, they have successfully secured a green loan to fund the 120MW solar PV project. A green loan is a type of financing specifically designed for projects that are environmentally friendly and contribute to sustainability efforts.
