Why South African businesses are scrambling to get off Eskom’s power grid ─FNBank

*South Africa’s First National Bank top official discloses the cost of electricity supply remains high, and the increased interest in alternative energy solutions for business operations is not limited to the banking sector in the country

Alexander Davis | ConsumerConnect

Against the backdrop of frequent load shedding, increasing energy costs, and climate change, several South African businesses are increasingly turning to alternative energy solutions to power their operations in 2021.

Kyle Durham, Head of Alternative Energy Solutions at the First National Bank (FNB) Business said that the bank’s alternative energy solutions division had seen a significant increase in demand for renewable energy solutions, with Solar PV being the most popular, agency report said.

The FNB official stated that for every R(Rand) 1 million that the financial institution has funded in terms of power generators, it has funded more than R5 million in renewable energy projects at a ratio of 1:5.

Durham said: “As at (sic) December 2020, we have funded approximately 20MW of renewable energy infrastructure for our business customers and of these, approximately 5MW relates to agricultural and secondary agri-customers.

“Despite the effects of the COVID-19 pandemic, the bank is projecting a significant increase in alternative energy funded solutions by the end of the year.

“Admittedly, it is off a low base, but momentum is growing faster and beyond any expectations we had for this year.”

The increased interest in alternative energy solutions is not limited to the banking sector, said he.

The FNB Head of Alternative Energy Solutions further explained: “When we talk to the industry, they are confirming increased demand for alternative energy solutions.

 

“One of our customers in the industry reported that in the first three months of their current financial year, the company turnover exceeded the turnover figure for the previous 12 months.”

He stressed that the agricultural sector, in particular, has shown an increased appetite for alternative energy solutions in 2021.

The bank’s top official stated that lack of certainty around constant power supply has had, and continues to have a massive impact on the agricultural sector and associated industries.

Farming operations and seasonal planning have been disrupted by repeated outages, report noted.

Besides, the cost of electricity supply remains high and set to increase further from 1 April 2021.

It is noted that the South African Presidency February 2021 announced that the Electricity Regulation Act would be amended to ease licensing requirements for embedded generation projects, which includes roof-top solar power systems.

In his President Cyril Ramaphosa in his State of the Nation address, said: “Recent analysis suggests that this could unlock up to 5,000 MW of additional capacity and help to ease the impact of load shedding.”

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