Autocast first Nelson Mandela Bay company to benefit from renewables deal between NMBBC and Etana Energy

Autocast South Africa – a leading supplier of cast and machined components to the automotive, mining and engineering industries – is the first of more than 30 of Nelson Mandela Bay’s largest electricity users to benefit from a renewable power supply deal with electricity trading company Etana Energy.

“This was born out of the Nelson Mandela Bay Business Chamber’s (NMBBC) Renewable Energy Cluster which brought together some of the highest energy users in the Bay around two years ago to find a common solution for procuring clean power. After going through a rigorous selection process, Etana Energy was selected as the preferred renewable electricity supplier,” says Denise van Huyssteen, CEO of NMBBC. “The Chamber has adopted the cluster approach to enable the Bay’s businesses to combine resources to develop and implement solutions for a range of issues – from energy through to water and sanitation, among other aspects that affect the business environment.”

Says Etana Director Reyburn Hendricks: “This cluster approach is an example of how electricity traders and their business customers can help address SA’s electricity crisis and simultaneously deliver real value for their shareholders.”

Added generation capacity

Energy trading addresses three key electricity challenges South Africa faces. First, the country needs a significant amount of additional generation capacity. Secondly, to provide this additional electricity, independent power producers (IPPs) need secure, long-term “offtake agreements” (sales agreements) to get financing for their projects. Thirdly, businesses can offer products to their customers with vastly reduced carbon profiles.

Etana Energy signs long term agreements with IPPs. This provides these producers the base to finance the construction of renewable power plants. Etana Energy then aggregates, markets and sells the generated electricity to commercial and industrial customers based on their load profile, and their specific needs.

Power reaches customers like Autocast South Africa via “wheeling”, a process where electricity traded between private parties is transported across the Eskom grid from where it is generated to end-users, even across long distances.

Etana Energy’s generation portfolio consists of both wind and solar generation, and covers a much higher percentage of customer’s electricity demand that solar would supply on its own.

Coal-derived electricity still dominates the South African energy mix, but renewable technologies like wind, solar PV, and concentrated solar-thermal power (CSP) now provide 7.3% of the total energy mix, with 6.2 GW installed capacity. Etana’s initial portfolio that underpins the Autocast contract will add 400MW to this. Etana has already secured grid connection agreements with Eskom, and construction will start later this year.

Says Autocast Executive Director David Mertens: “Recognising SA’s challenges with electricity generation and the decarbonisation imperative, Autocast has partnered with Etana to access clean, cost-effective wind-powered energy. This aligns with our sustainability goals, reduces our environmental footprint, and ensures predictable energy costs providing long-term stability.”

Benefits

The Etana-supplied electricity favourably competes with the existing tariffs. Inflation-indexed increases will result in more savings for customers over time. Customers also receive Renewable Energy Certificates – auditable evidence that they have lowered the carbon footprint of their electricity usage – and benefit from B-BBEE preferential procurement.

Says Evan Rice, Etana CEO: “The Autocast transaction would not be possible without the commitment and support of the Nelson Mandela Bay Municipality (NMBM) which reflects the city’s longstanding visionary approach to energy. Our positive experience with the municipal leadership in the Nelson Mandela Bay is a reminder of how much can be done if we work together.

“The Nelson Mandela Bay Business Chamber has demonstrated how businesses in one geographic area can come together to find a solution that benefits them all, by leveraging their collective scale to make them attractive to an energy trader. Through this initiative, NMBBC is ensuring its members can thrive despite the current challenges in the electricity sector. When that happens, everyone wins”, he concludes.

About Etana Energy

Etana Energy is a majority black-owned, licenced electricity trader that supplies electricity generated by renewable energy projects to businesses in South Africa, using the national electricity grid. Etana’s customers benefit from certified low-carbon electricity at tariffs competitive with Eskom or municipal supply, forward price certainty, flexible contracting terms and qualifying B-BEEE expenditure.