South Africa’s biggest data centre company saying goodbye to Eskom power
South Africa’s largest data centre company, Teraco, has reaffirmed its plan to stop using fossil fuel-based electricity to power its operations by 2035.
Teraco’s eight data centres currently support a critical power load capacity of 185MW across its four campuses in three major cities — Johannesburg, Cape Town, and Durban.
The company has already installed 6MW of rooftop solar at its campuses, which it will expand to 10MW capacity by the end of 2026.
The company will also buy 120MW of privately generated power from a utility-scale solar plant in the Free State, which is also set to become operational in 2026.
These developments will enable Teraco to have 50% of its electricity sourced from clean sources by 2027.
Teraco also signed a power purchase agreement with NOA for wind power, which is essential to support its electricity demand when the sun is down or solar production is low.
In ten years, it aims to supply its entire power demand from renewable sources. While it will continue to have a grid connection to wheel electricity, Eskom may have slipped out of the picture by then.
The power utility is being split into three separate entities, with the National Transmission Company of South Africa (NTCSA) taking over the transmission network, over which electricity is wheeled.
The NTCSA was spun off from Eskom’s main business as a legally separate subsidiary of the company in 2024.
It will transition to a fully independent transmission system operator over the next five years, ensuring it treats both Eskom generation and private power providers equally.
The bulk of South Africa’s new renewable energy is expected to come from independent power producers, which are already supplying electricity at much lower rates than Eskom’s coal plants.
However, Jan Hnizdo told MyBroadband the company’s energy shift was driven primarily by its focus on becoming 100% renewable energy-reliant, not electricity savings.
“This also aligned with the needs and expectations of our client base, who are also setting near-term renewable energy goals and targeting significant carbon reduction,” Hnizdo said.
Not a “net-zero” strategy
While many companies have expressed plans to reach “net-zero” or carbon neutrality over the next few decades, Teraco’s 100% renewable energy goal is different.
Net-zero can be achieved by offsetting the company’s environmental impact through the purchase of green credits from other projects.
These companies can continue using more harmful energy sources but effectively pay a financial penalty for doing so.
In addition to being backed by projects that have reached financial close or are under construction, Teraco’s plans will deliver new renewable energy generation capacity to the national grid.
Hnizdo criticised commitments linked to projects that don’t have a clear path to closing or are merely linked to the purchase of renewable energy certificates or green attributes from legacy projects.
These do not promote any additional renewable energy generation or benefit to South Africa as a whole.
Hnizdo added that South Africa was uniquely positioned to leverage solar irradiance and position itself as a potential leader in climate-resilient data centre development.
“In a global economy increasingly shaped by decarbonisation, South Africa’s solar potential is a powerful lever for sustainable growth and long-term competitiveness,” Hnizdo said.
Wind energy will also be a key resource for data centre operators like Teraco, which need to operate 24/7.
“Wind blows through the night and during the day, making it a natural accompaniment to solar power,” Hnizdo said. “When combined, they enable far greater levels of renewable energy penetration.
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