More independent power producer deals possible, says energy minister
The government is still considering more agreements with renewable energy independent power producers amounting to R64bn, Energy Minister Jeff Radebe says.
Radebe was speaking at a contract signing ceremony on Wednesday between Eskom and 27 independent power producers for bid windows 3.5 and 4 that will inject more than R55bn in direct foreign investment into the local economy.
However, the extension of the projects, which have faced strong opposition from labour unions, was dependent on affordability, prices, economics and the value of money, he said. Since the programme was launched, 53 independent power producer projects had started operations, 27 were signed on Wednesday and 22 others were in the pipeline.
It was expected that the total electricity generation capacity of all the 102 independent power producers would be 17,000MW.
"Having signed these bid windows 3.5 and 4, we still have other projects in the pipeline to be signed. Furthermore, we are still giving consideration to the expedited bid window of 1,800MW, the equivalent of about R64bn awaiting processes depending on affordability, the prices, economics and value for money. This can also contribute another 80,000 jobs within the foreseeable future," Radebe said.
Energy expert Roger Lilley said while it was hard to ascertain whether Eskom would be able to afford the programme extension, changes at the power utility would determine its fate. The mooted reduction of Eskom’s staff headcount and the national energy regulator’s decision regarding tariff hikes as requested by the power utility would affect the entity’s financial position, he said.
Indications were that the economy was growing, leading to a higher electricity demand that would create room for the newly acquired extra capacity that would kick in in about three years when the 27 new power producers were operational, Lilley said
Meanwhile, trade unions estimate 40,000 jobs would be lost as a result of the independent power producers.
The National Union of Mineworkers said the move was "destroying jobs".
"Workers of this country will not continue to vote and support an organisation which is taking away jobs from the poor," the union said.