A recent analysis on the transition to renewable energy has raised concerns for businesses regarding the potential high costs and risks involved in this shift. Discovery Green’s white paper, titled ‘Renewable Energy Strategies For Businesses In South Africa: A Technical Review,’ delves into the comparison of various ways businesses can access renewable energy and the associated costs.
The report highlights the importance of caution when considering over-investment in solar power, as the energy production may not always align perfectly with the business’s consumption patterns, leading to increased reliance on traditional power sources and subsequent higher energy costs over time. Additionally, the paper emphasizes the need to optimize the mix of renewable energy sources to match the business’s energy consumption patterns from the outset.
Various strategies such as rooftop solar, wind generation, and trading have been assessed across different industries, including financial services, food retailers, fitness, hospitality, shopping centers, mining, and agriculture. The analysis also considers scenarios of oversupply in solar generation and high carbon taxes to gauge the feasibility and implications of relying on renewable energy sources.
The findings reveal that businesses utilizing solar power for 45% of their energy needs may experience a 77% increase in costs to cover the remaining 55% with other renewable sources. Suboptimal coverage levels could leave businesses vulnerable to future price hikes for conventional electricity and result in potential price fluctuations due to the variability in renewable energy output.
The report underscores the importance of diversification in energy procurement to ensure a stable energy supply that can adapt to changes in energy generation. Strategic planning is crucial to maximizing both financial and operational benefits in the transition to renewable energy. With these insights, businesses are encouraged to approach renewable energy procurement with a thoughtful and strategic mindset to navigate the complexities of this transition successfully.
