Data centres and cloud companies kissing dirty Eskom power goodbye

Several major data centre and cloud companies in South Africa are significantly reducing their reliance on Eskom’s electricity, improving their resilience against load-shedding while also reducing their environmental impact.

Data centres consume vast amounts of electricity to power and cool the computer hardware they house.

Heat can be particularly problematic in a country like South Africa, with lots of sunshine and high temperatures adding to the challenge.

To prevent overheating and ensure optimal operation, data centres are equipped with massive, energy-hungry cooling systems.

With Eskom’s electricity prices previously being highly competitive by global standards, data centres had little financial incentive to switch to alternative sources.

However, the power utility’s tariffs have surged dramatically to be among the world’s most expensive.

In addition, severely intensified load-shedding has forced data centres to rethink their backup capacity.

The conventional approach has been to use fuel-powered generators, which can not only run up a sizeable diesel bill but are a major source of pollution.

Relying on Eskom’s grid power has also become undesirable for international companies, as it comes primarily from coal-fired plants.

Fortunately, the price of electricity from utility-scale solar plants has become signficantly cheaper than coal power in recent years.

The prices of solar panels, inverters, and batteries for on-site installation have also plummeted, improving the financial case for alternatives to generators.

As a result, many companies providing hosting or cloud service facilities are increasing their usage of cleaner power, primarily from solar generation.

That enables them to achieve three things:

• Improve resilience against Eskom and municipalities’ unreliable grid supply
• Lower electricity bills on Eskom and generator power to achieve cost savings over the long term
• Use cleaner sources of energy to reduce their carbon footprint, which can have further financial benefits

Where it is not possible to directly supply data centres with on-premise installations, electricity is being wheeled through Eskom and municipalities’ transmission and distribution networks.

Below are three major data centre operators or cloud service companies in South Africa which have

Africa Data Centres (ADC) — 12MW initial

ADC and Distributed Power Africa (DPA) broke ground on an offsite solar farm in the Free State in April 2024.

In the first phase of the project, it is procuring 12MW of production capacity to power its Cape Town data centre CPT1 from DPA.

CPT-1 was recently upgraded to support an equivalent capacity of IT load.

The power purchase agreement with DPA will increase ADC’s use of renewable energy to more than 33% of its total demand.

The second phase will supply the Johannesburg-based JHB1 and JHB2 data centres with solar power.

The company also has on-site rooftop solar at its JHB1 facility, which provided 4% of its demand in the 2023 financial year. It aimed to increase this contribution to 10% in the 2024 financial year.

In the longer term, ADC is hoping to achieve carbon neutrality in 2030.

Africa Data Centres breaking ground on 12MW solar farm in the Free State

Amazon Web Services (AWS) — 28MW

Amazon completed its first South African solar plant in early 2022.

The Northern Cape facility supplies the AWS data centre in Cape Town with up to 10MW of capacity.

Amazon said the facility can produce up to 28,000MWh of renewable energy annually, enough to meet the yearly electricity needs of 8,000 average South African homes.

According to Amazon’s website, it is planning for a second 18MW solar farm in the Free State, dubbed the Springbok Solar Farm.

Amazon already procured or installed sufficient renewable energy to contribute 100% of its electricity demand by 2023, seven years earlier than its initial target of 2030.

These facilities power its data centres, logistics facilities, physical stores, corporate offices, and on-site electric vehicle charging points.

Amazon’s 10MW solar plant in the Northern Cape

Teraco — 210MW

South Africa’s biggest data centre operator, Teraco, plans to procure at least 200MW of utility-scale solar power.

It announced it secured 120MW of grid transmission capacity from Eskom in February 2024.

That capacity will be used for wheeling electricity from a solar farm in the Free State across transmission and distribution networks to Teraco data centres across the country.

The company is planning to procure at least another 80MW from utility-scale solar in the coming years.

Teraco also has 6MW of on-premise rooftop solar capacity at its data centres. It aims to increase that to 10MW as it expands its IT load capacity.

The company aims to draw 50% of its colocation sites’ demand from renewable energy sources by 2027 and 100% by 2035.

Solar panels on the roof of Teraco’s JB2 data centre