The monopoly Eskom enjoys allows it to restrict growth of competition
Nuclear has a serious competitor and cost analysis favours renewables if the nation commits to this route
At last, the energy minister has announced that Eskom must sign power-purchase agreements with renewable independent power producers (IPPs) by the end of October. The pressure on electricity producers to decarbonise, in line with the Paris agreement, makes it inevitable that there will be competition between renewables and nuclear. The attempt by the nuclear lobby in SA to downplay renewables technology was, therefore, not unexpected. How else should we read the refusal by Eskom over the past two years to sign the latest round of bids from IPPs, to the chagrin of the renewables fraternity? Something is afoot at the state entity and one need look no further than the bid window model that quantifies the effect of the initial high bid window values on the Eskom blended tariff to customers. With the South African model focused on the auction or bid window process, the costs start off relatively high and reduce significantly over time. The argument for the initially high figure is that i...