Backed by Johann Rupert, EXSA transforms South African energy sector through active trading

Oluwatosin Racheal Alabi -

Key Points:

  • EXSA starts active trading in June 2023, marking a new chapter in the South African energy sector.
  • The energy exchange has signed numerous Power Purchase Agreements with third-party customers.
  • EXSA plans to include battery storage solutions to address energy supply challenges.

The Energy Exchange of Southern Africa (EXSA), supported by South Africa’s richest man Johann Rupert, has been actively trading since 2023, enhancing South African energy sector.

Last year, Rand Merchant Bank (RMB) acquired a 25-percent stake in Ubiquity Energy from Johann Rupert’s Remgro for an undisclosed sum.

Ubiquity Energy, the holding company for EXSA, also holds a 51-percent stake in Enerweb. At the time, RMB infrastructure transactor Sindisiwe Mosoeu highlighted that EXSA would start selling electricity in June 2023. Remgro has now confirmed this achievement.

Industry evolution

A Remgro spokesperson explained that the South African energy trading industry has become a hotbed of activity since the RMB acquisition.

“The industry has seen new players enter and significant progress in the regulatory space, enabling extensive trading activity,” they said.

EXSA initially focused on wheeling renewable energy to Remgro’s portfolio customers, limiting credit risk and helping these companies achieve net zero targets quickly.

Expanding horizons

EXSA has redirected its focus to third-party customers outside the Remgro Group, signing numerous Power Purchase Agreements and boosting the company’s customer pipeline.

Last year, Mosoeu mentioned that the exchange had over 100MW of electricity in its pipeline, to be delivered over the next year or two. However, EXSA declined to comment on its generation pipeline and customer list, preferring to surprise the market at a suitable time.

CurrentcChallenges

EXSA acknowledged that the lack of wind energy supply is a major challenge, but this is common in the industry. Despite being in its early stages, EXSA has successfully executed trades via its trading platform.

These trades, though small, have provided invaluable insights into the operational requirements of trading in South Africa. Remgro highlighted that the risk profile of a trader, holding a diversified portfolio of generators and customers, differs from a one-to-one trade, where customers are exposed to a single Independent Power Producer.

Remgro announced that the next frontier for EXSA is the inclusion of battery storage solutions. When asked about competition, Remgro welcomed it.

“Having many players is good for the trading industry as a whole, and a monopoly by a few large players would be detrimental,” they said.

Building the energy exchange

Remgro, founded in the 1940s by Anton Rupert and now led by Johann Rupert, has evolved significantly. The company saw many businesses struggling with energy pricing and supply security. To address this, they developed an energy trading platform to connect green energy producers with consumers.

This exchange allows consumers to access reliable and affordable renewable energy and benefit from green initiatives. The demand from Remgro’s companies gave EXSA a strong start. For instance, in September 2021, Mediclinic signed a £110 million agreement with EXSA to buy renewable electricity. Additionally, Earth & Wire signed a 12-year deal with EXSA to provide 5MW of solar energy to Mediclinic and another large customer.

Under Johann Rupert’s leadership, EXSA represents South Africa’s growing energy industry through innovation, regulatory progress, and commitment to sustainable solutions, set to shape the country’s energy future.