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Financial services group Discovery has launched an energy offering that will see the group act as an electricity trader connecting businesses to renewable power generated by independently run utility-scale renewable plants.

The Discovery Green renewable energy platform will operate through a wheeling process that will entail electricity generated at the most efficient locations for wind and solar generation in the country being wheeled to a business through the existing national grid (owned by Eskom).

At the launch of Discovery Green in Johannesburg on Wednesday CEO Adrian Gore said that for most businesses wanting to reduce their carbon emissions, the most difficult emissions to cut are often scope 2 emissions associated with their electricity usage.

This is especially true in SA where businesses rely on Eskom which produces more than 85% of its electricity from coal.

The renewable energy offering from Discovery will make clean, affordable electricity available to businesses which will help them cut emissions and save on energy costs.

In the initial phase, which targets delivering the first wave of electricity to businesses by 2026, Discovery will procure between 400MW and 1GW of wind and solar energy from local and international Independent Power Producers (IPPs).

The platform will for now be open only to businesses who are medium to large consumers of electricity connected to Eskom distribution.

According to Andre Nepgen, head of Discovery Green, through aggregation the products they are offering will solve one of the biggest challenges posed by the intermittency of renewable energy (only being available when the sun shines or the wind blows) for businesses that need to consume certain amounts of energy at specific times.

“With the benefit of aggregation, modelling and diversification, Discovery Green is able to offer products that are completely different to the market’s share-of-plant approach,” said Nepgen.

By diversifying the sources of generation geographically, with plants located across the country, and terms of the type of generation (both wind and solar) and then aggregating this, they are able to offer a renewable energy solution that is “low risk” and which does not force businesses to ultimately pay for energy they don’t need.   

Discovery launched two products as part of its initial offering. One will provide at least 70% of a business’s energy consumption from renewables. With this product, customers will be able to realise a saving of up to 20% on their electricity costs.

The second product offers companies the ability to switch to 100% renewable energy. Depending on the terms of the agreement this product will be offered at a 0% premium compared with existing costs to buy electricity from Eskom.

The products guarantee “cost certainty” with price increases linked to inflation.

“We have the ambition of building between 400MW and 1GW, and more than that if demand follows. We have already filled up commitment for a large portion of the initial phase. We believe if we open this up today to the broader SA we’ll be able to fill [demand] up quickly and get going on the construction side,” Nepgen said.

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