Q & A: YELLOW DOOR ENERGY SOUTH AFRICA
How are renewable solutions improving supply chain and production resilience? Solar paired with BESS significantly improves production uptime, particularly in factories and distribution centres where interruptions are costly and disruptive. FMCG and retail players are increasingly integrating renewables into logistics. Shoprite is a notable example, having deployed an electric truck charged from solar at its Basson Distribution Centre. This not only demonstrates a serious commitment to decarbonisation, it also reduces exposure to diesel price volatility and potential fuel supply shocks.
Additionally, investors, lenders and major customers increasingly view robust decarbonisation and energy resilience plans as part of overall business resilience, influencing both access to capital and opportunities in export markets( particularly under mechanisms like CBAM).
What are the incentives or policy changes supporting renewable energy adoption? The Section 12B tax incentive remains useful for smaller projects( up to 1 MW), offering accelerated depreciation. In 2021, the licensing threshold for larger projects increased from 1 MW to 100 MW, requiring only NERSA registration. In 2022, the threshold was removed entirely, enabling large industrial users to self-generate or contract embedded or wheeled energy from IPPs without full generation licenses.
South Africa’ s wheeling framework has become increasingly supportive, with progress made towards a wholesale energy market and the introduction of trading licences for energy traders and aggregators. These actors are becoming particularly important in the FMCG sector, where traditional captive power and standard wheeling options are no longer sufficient.
At a European level, CBAM introduces a structural incentive to reduce the carbon intensity of electricity used in manufacturing, especially for export-oriented heavy industry, with FMCG potentially following in time.
What are the challenges FMCG companies face when transitioning to renewable energy? Renewable energy can be costly when financed on balance sheet, even with tax incentives. PPA and lease models, such as those offered by Yellow Door Energy, help overcome these barriers by removing upfront costs for creditworthy medium-to-large energy users.
A common challenge with PPAs is the requirement for payment securities( PCGs), which ensure long-term payment obligations are met and improve project bankability. FMCG companies may also face inconsistent or conflicting advice from various service providers, making it difficult to know whom to trust. Running an RFP( Request for Proposal) can be time-consuming, and engaging advisors can be costly.
There is also rising uncertainty around future grid tariff structures and market reforms: Will fixed charges increase? Will a spot market emerge? Such uncertainties often lead to indecision. In some cases, companies delaying wheeling procurement have later found themselves unable to proceed due to grid congestion. This results in lost savings and missed opportunities.
Large retailers now have public climate commitments and are being held accountable by investors and the media, which shapes public sentiment.”
What does the long-term future of renewable energy look like for the consumer goods industry? Given South Africa’ s strong solar and wind resources and extensive rooftop potential, C & I solar adoption is expected to grow rapidly. Energy systems offering demand response and enhanced flexibility, increasingly supported by AI, will become more prevalent.
Electric trucks charged with renewable energy are likely to become more common in FMCG logistics. Low-carbon production may become a mandatory requirement for access to export markets, and potentially some domestic markets too.
The energy supply market will continue to evolve, improving competition and enabling more companies, including those currently unable to procure renewables, to access cleaner, more affordable power. �
54 sabusinessintegrator. co. za