South Africa’s biggest data centre company says it will always need Eskom

Teraco has said that although it has invested in a 120-megawatt (MW) solar project in the Free State, it will always rely on Eskom to supply or transmit power to its facilities.

The company explained that it requires Eskom’s transmission network to wheel energy generated by its renewable energy projects and from other Independent Power Producers (IPP) to its data centres.

Teraco has data centres in Johannesburg, Cape Town, and Durban.

Energy wheeling allows power to be moved from an independent energy producer to end users in urban areas via existing transmission and distribution networks.

“This means Teraco will always be connected to the grid. Our solar project is not an attempt to displace Eskom,” the data centre operator told MyBroadband.

“We must work with Eskom, municipalities, and other stakeholders to deliver additional wheeled renewable energy generation capacity.”

However, Teraco does have a 100% renewable target to offset the use of its facilities.

This is a major motivation for its solar plant, which is expected to be completed by late 2026 and will produce more than 354,000 MWh annually.

Teraco said this can provide for a portion of its energy demand during the day. However, it will need to turn to alternative renewable energy sources, such as wind, to fill the gap at night.

This is because, unlike physical retailers and other traditional businesses, data centre providers don’t have the luxury of shutting down their equipment after business hours, resulting in increased energy consumption.

For instance, its Isando Campus in Johannesburg has a critical IT load of 70MW across its JB1 and JB3 data centres. The critical IT load refers to the power consumption of the information technology equipment necessary to run the DC.

Similarly, its CT2 data centre in Cape Town requires 50MW of energy to run the IT infrastructure.

Teraco said this load is constantly increasing as clients deploy their IT equipment, and more space is allocated for this purpose in its new DCs.

Because of this increase in demand and its energy goals, Teraco said it will need to continue to pursue solar development opportunities and engage in third-party IPP procurement opportunities.

Like Teraco, several other data centre operators have begun investing in renewable energy solutions to decrease their energy consumption footprint from the national grid.

For example, Open Access Data Centres (OADC) launched a 330kW pilot grid-tied solar project this year to offset its energy usage of one of its Durban facilities.

“The system ties directly into the A and B stream IT loads, directly offsetting energy usage at the rack level,” OACD told MyBroadband.

“Data hall 1’s IT design capacity is 330kW, allowing the solar system the ability to offset the entire load during peak sun, realising green energy during daylight hours.”

It said the move marks the start of OADC’s broader renewable energy rollout plan, through which it wants to install solar systems for its Isando phase two and three builds. The facility is expected to launch in Q2 2025.

“We are also investigating other forms of renewable energy initiatives in a drive to reduce PUE ratios across all sites, including but not limited to chilled water and potential ice storage, gas power generation and heat reuse for our Nigerian site,” said OADC.

PUE is the ratio of the total amount of power used by a data centre facility to the power delivered to computing equipment.

Africa Data Centres also broke ground on an off-site solar power plant in the Free State in April 2024, designed to provide power to its facilities nationwide.

It partnered with Distributed Power Africa (DPA) on the project.

The project’s first phase involves procuring 12MW of production capacity from DPA to supply its Cape Town data centre CPT1. The facility was recently upgraded to support 12MW of IT load.

Its power purchase agreement with DPA will help Africa Data Centres increase its use of renewable energy to over 33% of its total demand.

Amazon Web Services (AWS) established a solar power plant in the Northern Cape in early 2022. It provides up to 10MW of capacity to the AWS data centre in Cape Town.

Amazon says the solar power plant can produce as much as 28,000MWh of energy annually. It also plans a second 18MW solar farm, the Springbok Solar Farm, for the Free State.