Teraco to power data centres with R2bn solar plant

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 21 Feb 2024
Teraco’s JB2 data centre in Johannesburg is equipped with rooftop solar panels.
Teraco’s JB2 data centre in Johannesburg is equipped with rooftop solar panels.

As South Africa’s power crisis continues, vendor-neutral data centre provider, Teraco has secured its first grid capacity allocation from Eskom and will commence construction of a 120MW utility-scale solar PV energy facility in the Free State province of South Africa.

In an interview with ITWeb yesterday Jan Hnizdo, CEO at Teraco, said the company will spend about R2 billion to complete the solar PV project.

He anticipates that the solar PV facility will be up and running in 18 months’ time.

South African organisations are increasingly looking to alternative energy sources as state-owned power utility Eskom continues to battle to supply energy.

Over the years, Eskom has been implementing load-shedding, which has a massive impact on business operations and the South African economy.

Mining and telecommunications companies, among others, have been leading the charge on weaning themselves from the struggling Eskom, which currently provides over 90% of South Africa’s electricity mostly from coal-fired power stations.

According to Hnizdo, to mitigate against the challenges of power outages, Teraco was spending “millions” of rands in a month on diesel for generators to power its data centres.

“Over the past two years, our uptime has been 100% but grid availability has been around 15% and at some sites at about 20%. So we needed to supplement that with diesel, and it’s a huge cost. I can tell you it costs millions of rands in a month. It’s a huge cost to us,” he says.

Wheeling deal

In a statement, Teraco says the grid capacity allocation from Eskom enables the data centre provider to connect its planned 120MW solar facility to the national electrical grid.

The power generated will be wheeled across Eskom and municipal power networks to Teraco’s facilities across South Africa.

The announcement comes as Teraco is expanding its data centre footprint in South Africa. The company now boasts of critical power load capacity of 186MW, which includes the Isando Campus JB1/JB3/JB5 (70MW), Bredell Campus JB2/JB4 (64MW), Cape Town Campus CT1/CT2 (50MW), and Durban (2MW).

Jan Hnizdo, CEO of Teraco.
Jan Hnizdo, CEO of Teraco.

“This allocation is a significant step towards meeting our renewable energy ambitions and those of our clients. It is also only the first phase of our longer-term renewable energy commitment. We have been on a long journey over the last few years to obtain these approvals, and our aim now is to execute quickly on the opportunity,” says Hnizdo.

“In South Africa, we have various energy challenges, and this presents an incredible opportunity to meet our near-term renewable energy goals while adding additional power capacity to a generation constrained grid.

“This will be a unique approach in Africa since Teraco will not only own its data centre facilities but also a significant renewable energy source with which to power them, creating a sustainable energy path to support growth. This initiative aligns with Teraco’s long-term vision of powering the digital transformation across Africa. South Africa’s solar resource is a source of competitive advantage for data centres relative to other locations,” he adds.

When fully operational, Teraco says the 120MW solar PV plant is expected to produce more than 338 000MWh annually.

“This PV project represents a massive component of our plan to achieve our 100% clean energy goal,” says Bryce Allan, head of sustainability at Teraco.

“In addition to this project, over the past two years, Teraco has deployed approximately 6MW of roof-top solar integrated into its facilities, and this amount is to be increased to 10MW as new facilities become operational.”

As part of construction design, Teraco facilities are built to maximise their solar yield potential.

Hnizdo also tells ITWeb that the company will also look to engage wind energy independent power producers in future to power its data centres.

Juwi, Subsolar partnership

Teraco partnered with Juwi Renewable Energies South Africa and Subsolar to develop the 120MW solar PV plant, with Juwi appointed to design and manage the procurement, construction, and commissioning.

In a first for Teraco, a green loan has been raised to finance the building of the plant, says the company, adding that choosing the right partners has been crucial to delivering on Teraco’s renewable energy strategy and vision.

It explains that wheeling renewable energy across electrical grids enables power to be moved from a renewable energy producer in outlying areas via existing transmission and distribution systems to end-users located in urban areas.

It also enables the deployment of renewable energy projects to areas with high energy yield to maximise renewable energy generation potential.