South Africa

South Africa

Eskom allowed to sign delayed PPAs

SOUTH AFRICA: Minister of public enterprises Lynne Brown has paved the way for state utility Eskom to sign 27 long-delayed power purchase agreements (PPAs).

The 140MW Loeriesfontein project in South Africa's Northern Cape (pic: SAWEA)
The 140MW Loeriesfontein project in South Africa's Northern Cape (pic: SAWEA)

By approving Eskom’s application to purchase additional renewable energy from independent power producers (IPPs), minister Brown has ended a period of uncertainty that has lasted since the summer of 2016.

Deals can now be completed once all affected parties set a date to sign the contracts, the South African Wind Energy Association (SAWEA) said.

Brenda Martin, CEO of SAWEA, said "the thousands of South Africans employed by the industry are certain to be as relieved as we are".

She added: "We are sure that the many rural communities surrounding positive wind farms who have been waiting for the development benefits associated with power plant construction."

The renewables projects covered by the PPAs include solar PV and CSP (concentrated solar power), while wind power accounts for 1.4GW of the 2.4GW total.

Developers had won allocations in tenders carried out under South Africa’s renewables procurement plan (REIPP).

The bulk of the outstanding projects are expected to be constructed in the Northern Cape, which has more than 60% of the preferred bid allocation, while the Eastern Cape has 19%.

The remaining projects are to be located in the North West (10%), Western Cape (6%) and Mpumalanga (1%) regions, SAWEA stated.

SAWEA estimates that the delay has halted ZAR58 billion ($4.74 billion) in investment as well as the creation of 15,000 jobs.

Eskom had refrained from signing the power deals citing overcapacity resulting from the country’s economic downturn and slumping energy demand, although critics suspected the regulator was reserving capacity for coal and nuclear companies.

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