Lyra Energy – a private power solution that offers distributed access to high-quality, affordable and predictable utility-scale renewable energy to medium and large commercial and industrial (C&I) players. With our name derived from the famous constellation, just as stars illuminate the night sky, “Lyra Energy” signifies our dedication to illuminating a sustainable pathway for private sector power users in South Africa.
Scatec, Standard Bank and STANLIB have combined their global expertise to establish a new renewable energy platform that offers uniquely low-risk, flexible commercial proposition to the private sector in South Africa. The partners each boast impressive portfolios of successful, operating renewable energy projects across the continent and the globe.
How Does it Work?
Lyra’s aggregator model will fund, build, own, and operate generation assets of which output is competitively priced. The energy from these projects will be transmitted (or ‘wheeled’) to multiple off-takers, across the national grid. Private sector customers or off-takers can expect increasing savings over time – especially if standard Eskom tariffs, which have risen by an average of around 14% annually over the past four years, continue to outpace inflation.
Lyra Energy’s objective is to offer private power supply to the previously unserved segment of the commercial and industrial power users in South Africa. More specifically, users with significant electricity demands which in itself does not justify the procurement and implementation of a dedicated large renewable energy project. This will also provide clients with green energy certifications that are key to achieving individual and global net zero goals.
The aggregator enters the network use agreement between the generation assets, and Eskom, whose transmission lines are utilised to wheel power to the relevant location. Each private sector customer will sign a standardised, fixed-tenor Power Purchase Agreement (PPA) with Lyra which has been developed and tailored taking into account market trends and seeks to address traditional risks and frictions associated with bi-lateral PPA’s and wheeling of energy.
What is the Track Record of the Partners?
Scatec, the platform’s technical partner, is a global IPP with deep expertise across the value chain, and a firm commitment, to both social and environmental sustainability. Scatec’s impressive track record includes 4.3 GW of renewable capacity in operation and under construction across four continents. Scatec has close to 1 GW of renewable energy under operation in South Africa. This including the recently commissioned 540 MW + 1140 MWh Kenhardt Solar and Battery Energy Storage System (BESS) facility, which is the continents largest and first utility-scale dispatchable renewable energy project.
Importantly, Scatec has an existing portfolio of mature renewable energy projects in development, poised to be integrated into this platform to match private sector demand.
“Underpinned by Scatec’s extensive, well-established development pipeline, including market-leading technical and operational services, the Lyra platform is in a strong position to leverage economies of scale, minimise risk, and ensure successful, consistent generation of clean electricity,” says Scatec CEO, Terje Pilskog.
“As with other Scatec projects, the platform’s new utility-scale projects will be supported by an Integrated, business model, with a strong focus on long-term community impact, and sustainable job creation,” adds Terje.
STANLIB, the infrastructure investment partner, has a similarly vast portfolio of successful infrastructure investment management. Representing over R12 billion in infrastructure private equity assets, STANLIB is the custodian of an investment pool that effectively accounts for a significant portion of the available capital for infrastructure investing in SA.
With a focus on renewable energy, the group has previously invested equity in the development of 1,700 MW-worth of renewable power assets under the REIPPPP programme.
In addition to their formidable investment track record and capital resources, the investment-focused partner brings a wealth of deep infrastructure investment knowledge to the partnership table.
“The partnership will leverage STANLIB’s insights and investment industry expertise in optimising operations and maximising long-term growth potential, as well as in navigating complex regulatory frameworks and market dynamics,” says STANLIB’s Head of Infrastructure Investments, Greg Babaya.
“Our role is to mobilise much-needed capital from long-term investors, especially the retirement fund sector, where we’re key players, to help finance South Africa’s energy transition needs.”
Standard Bank, the third project partner, will likewise play a pivotal role as funder, key strategic advisor, and equity investor.
The bank, which is already the foremost funder of power and infrastructure projects across SA, is the largest in Africa, and in total controls around 150 billion USD in assets.
“In the context of climate change – one of the most pressing challenges of our era – Standard Bank stands behind a just energy transition for Africa that drives sustainable growth. This is a strategic investment for us, aligned with our objectives to see SA’s national economy thriving in the medium-to-long term,” says Kenny Fihla, Chief Executive of Corporate and Investment Banking at Standard Bank.
The bank has committed R50 billion towards financing renewable energy, which will roll out over the course of 2024.
This new offering to the dynamic private sector energy marketplace is tailored to fit an underserved portion of the industrial and commercial segments. It’s the first time that a partnership has emerged with a cohort of project partners of this calibre, and with this level of financial backing. The strength of their track records ensures a low execution-risk solution for potential clients.
This looks set to give investors newfound confidence, especially within the C&I sector, where businesses are desperately seeking market opportunities to reduce energy costs, achieve price stability, and align with broader organisational climate ambitions.
Matching generation from a pool of utility scale renewable energy generation facilities to a collection of commercial and industrial power users, allows Lyra Energy to offer the benefits of large-scale renewable energy projects to smaller scale users.
These benefits serve to mitigate users cost of energy supply relative to the utility as well as additional attributes of environmental credits and recognition of power expenditure in terms of preferential procurement requirements.