Generators of energy now have a single market for their surplus capacity. And because it’s so much easier to sell it, they can convert surplus capacity into revenue.
Consumers of energy can now have more control over their energy costs, more certainty around future pricing and are able to better defend themselves against interruptions. As the market develops we will aggregate supply and therefore be able to match exact demand profiles.
Licensed generators of energy feed their surplus electricity into the national grid, and the requisite energy is drawn by the customer.
When energy is purchased from the Energy Exchange, the amount of electricity generated and the amount of electricity being consumed is measured in real time.
Customers are then charged for the energy they consume at the agreed rate.
Customers may choose to purchase all their energy requirements through us, or only a portion thereof. The remainder can be supplied through other sources, like the traditional Eskom or municipal supply, or from embedded solutions, etc. Because we measure the transfer of electricity in real time from both the supplier and the consumer, the ‘switching’ from one generator to the next is catered for in the reconciliation process. We therefor always have an accurate account of how much energy has been consumed and from whom.
In the instance where a generator provides power directly to the customer there is a linear- type relationship. If the generator has an outage the customer is directly affected(albeit that there may be a financial consequence that may be different). If the sun is not shining, or there is cloud cover, the customer is affected.
On the other hand, by transacting via an aggregator (the Exchange) the customer is able to derive a number of benefits: continuity of supply (due to a diversified supply); profile engineering; an ability to manage load outages (relative to the underlying contract to buy/take energy); and the administration of the transactions.
Due to our aggregation model, our blended supply has a broader supply profile (in a 24-hour period) and therefore off-sets the remaining Eskom power such that clients achieve a greater saving than merely purchasing renewable energy from a single plant. This blended approach creates a diversification of supply that provides a level of risk mitigation if either one of the generators has an outage or is affected by environmental issues.
We are able to further sculpt the supply profile to more closely resemble the load profile and thereby create an efficiency for both the generator and the client.Any over-supply in a particular time-of-use period would be sold to a third party. Therefore you would be able to optimize your plant design and we, through our aggregation role, would take care of any resultant over-supply.
If a single plant has a temporary reduction in load, for instance for maintenance or some other outage, we would be able to resell the energy that you are contracted to purchase from the Exchange such that we can mitigate or entirely avoid your downside price risk.
We have already developed an auction system via which the energy can be offered for sale (to other Exchange customers), but in this nascent stage we would actively sell it to other customers. Similarly, if other customers of ours have reduced load, their surplus energy could be made available to you at a discounted price (thereby reducing the average cost of the energy you purchase). Given the size of your load relative to the non-Eskom supply you would always have capacity to exploit these opportunities.
Further, we have a so-called ‘banking’ arrangement with Eskom at an aggregated level (opposed to at generation plant level) which creates an additional advantage. To the extent that in a specific Eskom time-of-use period a generator provides more energy than the load can consume this surplus is spilled to the grid and mopped up by Eskom’s System Operator. In the ordinary course the customer is obliged to pay for this unused surplus. As an aggregator we have a facility where this surplus energy is credited to an account across all our customers and generators. We are therefore able to offer the energy to other customers at an opportunistic price. By purchasing your energy through the Exchange, you would be able to purchase these surpluses at a discounted price, if desired. Again, this would reduce your average cost of energy.
The Exchange has wheeling arrangements in place with Eskom and has a network of wheeling agreements with municipalities. To the extent that a customer is located inside of a municipal distribution network with which municipality we do not yet have a wheeling agreement in place, we shall conclude one with that municipality. Therefore, the generator merely has to supply the electricity to the Eskom point of connection, and we take care of all administration from that point onwards.
The Exchange performs the administration of the transactions, reconciles the billing and produces a set of pro-forma invoices to the various parties. This function is automated and performs an independent check against the generator, Eskom and the municipal systems. To the extent that there is a dispute or error with regard to the wheeled energy we would resolve it on behalf of either the client or the generator. You are therefore relieved of any material administrative burden both on a monthly basis and in the event of a dispute/error.