For years, renewable energy projects in South Africa followed a familiar model. Developers built wind or solar farms and signed long-term power purchase agreements with Eskom, locking in electricity sales for up to 20 years. That model helped launch the country’s renewable energy industry. Today, however, a different type of contract is beginning to emerge. Mainstream Renewable Power’s Ilikwa project is introducing Renewable Energy Supply Agreements (RESAs), a more flexible contracting model designed for private commercial and industrial electricity users rather than a single utility buyer.
The biggest difference is flexibility. Traditional Eskom power purchase agreements are highly standardised and typically run for around 20 years, providing the long-term revenue certainty needed to finance large infrastructure projects. RESAs, by contrast, are generally structured over five to ten years and can be tailored to suit the specific requirements of individual customers. Instead of selling electricity to one buyer, a renewable energy project can supply multiple businesses under separate agreements. Companies are therefore able to secure renewable electricity without committing to two decades of fixed contractual obligations.
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This approach reflects the changing structure of South Africa’s electricity market. As private generation, electricity trading and wheeling continue to expand, more businesses are looking for renewable power contracts that align with their own investment cycles, energy demand and operational flexibility. For many commercial and industrial customers, a shorter contract is easier to accommodate than a conventional long-term utility agreement, particularly where electricity demand may change over time or facilities could be expanded, relocated or sold.
The shift also changes how project risk is managed. Under the traditional Eskom model, project revenue depended largely on one long-term buyer. Under the RESA model, developers diversify their customer base across multiple off-takers, while pricing and contract structures can be adapted to different industries and consumption profiles. Although the contracts are shorter, they also reflect a more competitive electricity market where private customers have greater choice over how they purchase power.
The emergence of RESAs signals how South Africa’s renewable energy sector is evolving beyond the single-buyer model that dominated its first decade of renewable development. Rather than replacing traditional power purchase agreements, these contracts are expanding the range of financing and procurement options available to renewable energy developers and private electricity consumers.
