Why the AI gold rush may be smaller than Eskom hopes
Eskom is courting the world’s largest technology companies as buyers for a power surplus it cannot otherwise shift, chairman Mteto Nyati told the Financial…
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Eskom is courting the world’s largest technology companies as buyers for a power surplus it cannot otherwise shift, chairman Mteto Nyati told the Financial Times on Wednesday. But South Africa’s biggest data centre operator says the industry’s problem is not a shortage of generation.
Nyati said Eskom was in discussions with “the Amazons, the Microsofts, the Googles”, describing them as exactly the sort of power-hungry customers the utility needs after a generation recovery that has kept load shedding off the system for more than a year. “We’ve got this power that we cannot sell,” he told the London-based newspaper.
Asked by TechCentral, prior to the publication of Wednesday’s FT article, where the real constraints lie, Teraco head of sustainability Bryce Allan pointed somewhere else entirely.
“The primary constraint is not linked to generation capacity itself, as South Africa currently has a generation surplus of between 3-6GW,” Allan said. “The main constraint facing the industry relates to connecting and unlocking new renewable energy capacity through grid access and frictionless wheeling to enable the data centre industry to meet near-term ambitions for 100% renewable energy.”
That is close to the inverse of the pitch Nyati made to the FT. Teraco does not want to buy Eskom’s surplus; it wants Eskom’s wires to carry power it has contracted elsewhere.
Allan was explicit about the role he sees for the utility, telling TechCentral: “Eskom plays an important role and will continue to supply us with physical energy, enabling the transmission and distribution of electricity from our own and contracted renewable energy production.”
Teraco expects more than half its consumption to be covered by new-build renewables by the end of next year. It has a 120MW solar plant under construction, with mechanical completion and commissioning due in the fourth quarter of 2026 and testing complete in early 2027, after which it will export to the grid for wheeling to the company’s data centres in Ekurhuleni and Cape Town.
Teraco has also signed wind power purchase agreements with NOA, a Cape Town-based renewable energy aggregator that wheels power from its own generation fleet and from third-party independent power producers. The first project under those agreements is expected online in the second half of this year, with wheeled energy following shortly afterwards.
Read: Eskom fixed the fleet and the customers left
Battery storage is being explored with partners, which Allan described as “a critical enabler to accelerating our path to achieving 100% renewable energy ahead of our 2035 target”. He did leave a door open for the utility. The same wheeling path, he said, “is also open to the likes of Eskom Green, which we see as an important entrant to the sector in driving the growth of renewables in South Africa going forward”.
Teraco has been making this argument for months. In February, chief executive Jan Hnizdo told TechCentral that a frictionless rene…