TotalEnergies signs 260 MW renewable PPAs with Sasol and Air Liquide in South Africa

By Global Infrastructure Sherpa · Feb 23, 2023

Ppa Hybrid signed Northern Cape, South Africa Feb 23, 2023

260 MW

Capacity

development

Stage

TotalEnergies has signed Corporate Power Purchase Agreements (CPPA) with Sasol South Africa and Air Liquide Large Industries South Africa for the supply of 260 MW capacity of renewable electricity over 20 years. TotalEnergies will develop a 120 MW solar plant and a 140 MW windfarm in the Northern Cape province to supply around 850 GWh of green electricity per year to Sasol's Secunda site and Air Liquide's oxygen production site. The projects are expected to be operational in 2025.

Deal Analysis

TotalEnergies' signing of 260 MW renewable Corporate Power Purchase Agreements (CPPAs) with Sasol South Africa and Air Liquide Large Industries South Africa marks a significant step towards decarbonizing industrial operations in South Africa. TotalEnergies will develop a 120 MW solar plant and a 140 MW wind farm in the Northern Cape to supply approximately 850 GWh of renewable electricity annually to Sasol's Secunda site and Air Liquide's oxygen production facility. This 20-year agreement underscores the growing trend of large industrial consumers directly procuring renewable energy to reduce their carbon footprint and enhance energy security. The projects are slated to be operational by 2025. The deal highlights the increasing appetite for renewable energy solutions within the South African industrial sector, driven by both environmental concerns and the potential for cost savings. The involvement of major players like TotalEnergies, Sasol, and Air Liquide further validates the viability and attractiveness of renewable energy investments in the region. This transaction could serve as a template for similar CPPAs in South Africa and other emerging markets, encouraging further investment in renewable energy infrastructure and contributing to the transition towards a cleaner energy mix.

TotalEnergies will develop 260 MW of hybrid renewable capacity (solar and wind) in South Africa.
The 20-year CPPAs with Sasol and Air Liquide provide long-term revenue visibility for TotalEnergies.
The deal signifies the growing demand for renewable energy from industrial consumers in South Africa.
The project is located in the Northern Cape, a region with high renewable energy potential.

Market Context: South Africa is actively pursuing renewable energy development to diversify its energy mix and reduce reliance on fossil fuels. The country has a supportive regulatory framework for renewable energy projects, including independent power producer (IPP) programs and corporate PPAs. The industrial sector is a significant energy consumer in South Africa, and there is increasing pressure on companies to reduce their carbon emissions.