How does Virtual Wheeling fit into Vodacom South Africa’s broader strategy for energy management and sustainability?
Virtual wheeling is a vital mechanism within a broader strategy aimed at achieving a net-zero carbon footprint. This strategy encompasses various components, including onsite generation and virtual wheeling, among others. Onsite generation, for instance, can be exemplified by our campus, where solar panels are installed, enabling us to harness renewable energy directly on-site. However, the majority of our energy consumption occurs throughout our extensive network infrastructure, comprising data centers and mobile base stations.
The significance of virtual wheeling becomes apparent when considering our quest to reach a 100% renewable energy utilization goal. Without virtual wheeling, this objective would be unattainable.
Sitho Mdlalose, CEO of Vodacom South Africa
The significance of virtual wheeling becomes apparent when considering our quest to reach a 100% renewable energy utilization goal. Without virtual wheeling, this objective would be unattainable because generating 100% of the required energy at each individual base station is simply impractical.
Part of the 2025 commitment is to source 100% of your electricity from renewable sources across all Vodacom operations. Is this partnership with ESKOM helping you in achieving this goal? Do you think that Vodacom with all operations, and Vodacom South Africa are close to achieving this goal by 2025?
I’d say virtual wheeling is a main pillar to help us to achieve net zero. It won’t be the only pillar. I think we’ll continue to look at what we currently do on the road, including a whole spectrum of things, renewable energy certificates, etc. Ultimately, it will be generating this renewable energy, and the virtual wheeling will eventually be the biggest contributor to that, to our ability to get to that net zero by 2025.
What renewable energy sources would come from sourcing or leveraging through the virtual wheeling?
We are currently in the concluding stages of our Request for Proposal (RFP) process, through which we aim to contract independent power producers. This endeavor necessitates a blend of both solar and wind energy sources. The reason for this mix is rooted in the principle that energy can only be returned to the grid at the same rate it is consumed. Given our consumption patterns, which extend into nighttime hours when solar energy is unavailable, a combination of both solar and wind power is imperative to align our consumption with the energy we contribute back to the grid.
Digital transformation is crucial for South Africa, especially for the continent. Energy also has a crucial role because even if you see that the majority population is below 30. What is your outlook on solving the load-shedding issue that affects so many businesses and so many people?
Given our consumption patterns, which extend into nighttime hours when solar energy is unavailable, a combination of both solar and wind power is imperative to align our consumption with the energy we contribute back to the grid.
Sitho Mdlalose, CEO of Vodacom South Africa
I believe the government has an energy action plan in place. Upon closer examination, it becomes evident that addressing our energy challenges requires a comprehensive approach, not reliant on one or two isolated measures. The linchpin of this plan, in my perspective, is twofold.
Firstly, there’s the imperative to bolster our generation capacity. With the advent of private generation, the potential for enhancements in traditional wheeling and virtual wheeling becomes apparent, effectively augmenting private generation. Additionally, we can anticipate an increase in electricity generation from ESKOM itself as some of their plans come to fruition. Hence, the initial focus lies in expanding our electricity generation.
The second crucial aspect involves the transmission grid and the necessary investments ESCOM must make in this domain. It’s essential to ensure the accurate transportation of energy generated at various locations. In my view, while the energy action plan comprises a multitude of components, the pivotal ones are generation, followed by transmission and the transport infrastructure.
So would you say that public and private partnership in electricity delivery has a key role?
Certainly, it plays a vital and contributing role. It’s important to clarify that this contribution primarily focuses on expanding generation capacity. In the realm of the transport layer, which falls under ESKOM’s purview, the private sector is unlikely to be significantly involved. However, when it comes to generation capacity, the private sector can play a substantial role. This includes the potential for traditional wheeling, especially for large-scale facilities like mines, or virtual wheeling for distributed sites. These mechanisms empower the private sector to engage with independent power producers, enabling them to generate electricity that can be integrated into the grid. This, in turn, significantly bolsters the overall grid capacity.
These mechanisms empower the private sector to engage with independent power producers, enabling them to generate electricity that can be integrated into the grid. This, in turn, significantly bolsters the overall grid capacity.
Sitho Mdlalose, CEO of Vodacom South Africa
Do you think this historical deal you sign the agreement with ESKOM, can build a template or framework for other corporates also to join that course?
That’s precisely what it is. The virtual wheeling framework and the virtual wheeling agreement have been built and constructed by us and ESKOM but it is not a Vodacom-specific agreement. It’s an agreement that any corporation can sign with ESKOM now. It’s a blueprint. In fact, I’d go further than saying it’s a blueprint. It’s the actual agreement that largely wouldn’t vary from entity to entity and needed to be structured in that way so that ESKOM is fair across everyone. That exact framework agreement is pretty much the one that I suppose most corporations would use and leverage to sign off.
Akim Benamara: One more aspect to consider is the connectivity challenge in many African countries, primarily due to the affordability of devices. While this issue is widespread, South Africa faces a unique challenge concerning energy constraints. On one hand, South Africa has pioneered solutions like VodaPay to bank the unbanked, but it also grapples with electricity shortages.
What would you say to your customers – businesses, startups, or individuals aiming to realize their aspirations despite these shortages?
If you look at even with the load shedding and the plans that we’ve put in place, our network, quite frankly, has been available. We’ve hit availability of roughly anything between 95 to 97%, which is phenomenal when you consider that grid availability on average in the past year has been sub-80 and below. I think all the investment we’ve made in our network has really been focused on ensuring that we’ve got a reliable network regardless of load shedding. It’s ensuring that the backup on site is the backup that we have. Remember, again, even with virtual wheeling, all we’re doing is wheeling it into the grid. The transport layer is still ESKOM. We could do the virtual wheeling and that wouldn’t necessarily contribute to specifically and directly a lower load-shedding component. For us, it’s a two-pronged strategy. There’s a generation that helps with our net zero targets and our renewable energy. But there’s ultimately, let me call it the on-site generation and backup power generators, batteries, solar, et cetera, on-site that actually help us with the load-shedding challenge.
