GreenFlex, a registered trademark owned by UEA, offers a commercial approach to the wheeling model specifically designed for Eskom customers. Through GreenFlex, these customers have access to a unique tariff structure that encompasses various projects managed by UEA or other affiliated entities. The wheeling model employed by GreenFlex enables Eskom customers to benefit from a cost-effective and environmentally friendly energy solution.
Under the GreenFlex tariff, Eskom customers can take advantage of the wheeling savings, which are calculated by subtracting the combination of Weps credit and GreenFlex from the MegaFlex amount. This innovative approach ensures that customers receive maximum cost savings while embracing sustainable energy practices. By utilizing the wheeling model, businesses can optimize their electricity consumption and reduce their reliance on traditional grid sources.
GreenFlex Model
This model visualises contractual, electricity and financial flow in the GreenFlex ™ model. As Example, the year 2023-2024 is used. The WEPS credit received will be ZAR 1.09/KWh. The PPA tariff will be ZAR 0.785 /KWh, Thus realising a saving of ZAR 0.305/KWh.
Advantages of GreenFlex
LOCATION
Solar plant can be located in an area of higher irradiance, thereby increasing annual energy yield, compared to an onsite facility. The increased energy yield, together with economies of scale, impacts the energy cost savings to the customer.
CAPACITY
Onsite facilities are limited to the size of the available area and require environmental approval. A GreenFlex facility can supply multiple customers, thereby, increasing the available capacity versus each clients location.
GreenFlex Financial Benefit
The savings can be calculated on a very detailed level from the moment the first energy will be delivered (2024). Generally speaking, client cost savings will be around 30% (this is subject to calculation per case). 2023 Eskom increase is 18%, GreenFlex increases at CPI over life of PPA.
In addition to the initial difference in the tariff, the PPA Savings increase significantly over the course of the 20-year PPA because of the difference between the CPI increased PPA tariff and the Eskom tariffs which are anticipated to increase at a rate significantly above CPI.
For our savings calculations in this document, we have assumed that the Eskom tariffs will increase at CPI from the start of the PPA. The savings thus increase each year.
The reality, however, is that a much higher tariff increase is required in the coming years for Eskom to remain a going concern as evidenced by the scale of the annual bailouts that Eskom continues to receive. It is thus expected that we will see annual increases in the Eskom tariff of CPI plus anywhere between 4% and 6% for at least the next ten years.
Most of Eskom’s energy is produced by non-renewable sources. In earlier publications, Eskom estimated that for the generation of 1 MW, it produces approximately 1 tonne of CO2. Carbon Tax has already been implemented and will ramp up in the coming years in the region of R120 per Ton of CO2 produced. For each 1 MWh of renewable energy consumed, the customer also prevents the emission of 1 tonne of CO2 and so evades the taxes on such pollution.
