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A practical guide to why we created the platform model for transitioning to renewable energy

Andre Nepgen

Discovery started Discovery Green after we, as a business, struggled to find the right product to transition to renewable energy. After experiencing numerous challenges in securing a fit-for-purpose renewable energy solution, we realised that our journey could help streamline the process for other businesses. This led us to create a renewable energy model that would make it simpler for businesses to secure cost-effective, price-certain renewable energy.

Our platform model is a shift from the traditional approach of relying on a single renewable energy plant and one business as the consumer. Instead, the platform model utilises multiple plants supplying multiple consumers, offering businesses greater flexibility and security.

How our platform model works

On the generation side, a platform model allows businesses to move beyond being tied to one renewable energy plant in a single location. By sourcing a mix of solar and wind energy from various geographic locations, the platform ensures a stable and diversified energy supply, smoothing out the inherent volatility of renewable energy generation.

On the consumption side, the platform enables the optimal allocation of renewable energy to multiple businesses, accommodating their unique energy consumption profiles. This flexibility ensures that all businesses can reach a 90% renewable energy coverage, offering a practical and scalable solution for businesses of all sizes.

Why we developed the platform model

Several factors led to the development of this solution:

  1. Discovery's carbon-neutral goal
    Discovery set a goal to become carbon neutral by 2030. We installed solar panels on the roof of our Sandton head office, but with 16 floors (eight floors of retail and working spaces and eight basement floors), the solution covered only 3% of our energy needs. We quickly discovered that on-site solar generation would not be enough. This led us to explore the concept of "wheeling", where renewable energy could be procured in bulk from utility-scale renewable energy power plants.

  2. Long-term commitments
    While wheeling had potential, we quickly discovered that the contracts on offer were not suitable for most businesses. The 20-year contract presented to us felt impractical for Discovery, considering that we lease our building and our energy consumption forecasts were not a priority. Also, energy costs are not a major expense item for a financial services business, making a long-term contract an onerous commitment.

  3. Issues with take-or-pay models
    Take-or-pay models, where businesses pay for energy whether they use it or not, presented another challenge. If we were to wheel energy from a solar farm, and were not operational at the time, our business would still be expected to pay for the energy we didn't use. This added unnecessary risks, especially when unexpected issues could arise along the national grid. These were risks we did not want to take on as a business.

    The take-or-pay model often means businesses are signing up to replace only a small fraction of their total electricity consumption with renewable energy. While any step towards renewable energy was a positive move, we realised that low coverage would not bring us closer to Discovery's carbon neutrality goal, nor would it shield us from the rising cost of carbon taxes and future utility price hikes. We also wanted to avoid the complexity of managing contracts with multiple suppliers to eventually achieve a higher renewable energy coverage.

  4. Complexity of the wheeling process
    As a business, we struggled with the complexity of wheeling contracts. Bringing in technical advisers, lawyers, and consultants was costly, and navigating through the unfamiliar terminology in the contracts was time-consuming. The negotiation phase was so intricate and complex that it could take years to finalise a deal. Adding to this was the fact that we were dealing with brands that we were not familiar with.

A market-first solution

The challenges we faced led us to develop a solution that could simplify the process for businesses across South Africa. We wanted to move renewable energy procurement away from the complicated, laborious high-risk process we had experienced and create a straightforward model, much like signing for the purchase of a house or entering into a new cellphone contract. We aimed to make the transition to renewable energy accessible to all businesses by providing a simple, low-risk solution that allowed businesses to replace 90% of their electricity consumption with renewable energy in a single transaction.

The Discovery Green platform allows businesses to transition to renewable energy without the financial or operational risks. We take on the risk and complexity of sourcing renewable energy from the right power plants in optimal locations, handling all the technical and consulting work and due diligence. By leveraging Discovery's expertise in actuarial and risk modelling, we have created a market-first solution that offers businesses a protected, high-coverage renewable energy solution.

Discovery Green - a simpler, de-risked renewable energy solution

The Discovery Green platform model offers shorter contracts, quicker timelines, and standardised renewable energy procurement. By removing complexity and uncertainty, we aim to provide businesses the confidence that they are partnering with a trusted and established brand, giving them the freedom to focus on their core business.

The platform also eliminates the need to deal with multiple suppliers, making it easier for businesses to transition to renewable energy without the risk and hassle associated with multiple contracts. The result is a user-friendly, low-risk, cost-effective renewable solution that can help businesses achieve 90% coverage in a single transaction.

The future of energy is green, and we're here to help businesses make the transition to renewable energy seamless and cost-effective.

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