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Vodacom power wheeling pilot will be ‘transformational’

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 16 May 2023

Vodacom is edging closer to signing a power wheeling deal with Eskom, on a project the telephony group anticipates will be far-reaching in enabling it to circumvent load-shedding.

Last year, the operator announced it was planning a pilot project with Eskom, to boost its use of renewable power through “wheeling” or transferring energy to its operations over Eskom’s grid.

Providing an update on the initiative during a virtual call discussing the group’s full-year results yesterday, Vodacom Group CEO Shameel Joosub noted it will help the telco meet its 2025 commitments to source 100% of its electricity from renewable energy.

“We remain confident that the ‘virtual wheeling’ pilot project that we’re pioneering with Eskom, South Africa’s power utility company, will be signed off in the near-term, and that this will have a significantly positive impact on the country’s power grid and ultimately on the over 20 000 towers across the industry that require reliable power supply to operate optimally,” he noted.

Since 2020, Vodacom SA has spent over R4 billion on backup power solutions, such as batteries and generators, and a further R300 million in the past financial year on running costs for diesel, security and maintenance, according to the telco.

Joosub added that these funds would have been better spent addressing the digital divide in SA by accelerating rural coverage across the country and accelerating the telco’s 5G strategy.

According to Joosub, the deal to be signed with Eskom will allow the operator to use the state-owned power utility’s power transmission infrastructure, while the main source of renewable energy remains independent power producers (IPPs).

“The reason behind this project is to play a role in trying to assist with the power shortages. What we are looking to do is to commit to signing up the IPPs, and then contributing the power to the grid and use a virtual wheeling system to offset our power usage.

“The power will be virtually wheeled to the Vodacom sites, as opposed to being directly wheeled. We see this as transformational in a number of ways, because once the project is in pilot stage, we are looking to see if it can be replicated by the rest of the telco industry, and also by broader corporates,” explained Joosub.

Wheeling of electricity is common practice globally, and Eskom has approved third-party wheeling since 2008 for the physical export of energy onto the national grid by an IPP, and this facilitates open network access.

It allows privately-generated power to be transmitted across the national grid to customers that need it, in a willing buyer/willing seller model, according to Eskom.

Over the years, South African telcos have been vocal about the adverse effects of the rolling blackouts, which are impacting network quality and infrastructure across the country.

Network towers and base stations often shut down during power cuts, resulting in poor connectivity, or even complete network outages, which disrupt phone calls and internet connectivity.

Although the industry has spent billions on backup power solutions to provide network stability and continuity, related challenges become largely unavoidable when load-shedding is at stage four and beyond – leaving customers frustrated.