SA’s power generation plan hits snag, leading to delays
The signing of power purchase deals by preferred bidders has been postponed due to ‘outstanding matters and conditions’ with Eskom
SA’s plan to add an estimated R95bn worth of private power generation has been further delayed as the nation continues to suffer from intermittent power outages.
The signing of power purchase agreements by preferred bidders for the 2,000MW risk mitigation, or emergency power, programme was postponed due to “outstanding matters and conditions” with Eskom, the department of mineral resources and energy said in a reply to questions on Thursday. The bidders whose 11 projects were selected, and their lenders need “adequate time to undertake due diligence reviews of the project agreements”, it said.
SA experienced record power cuts in 2021 as Eskom has said that as much as 6,000MW of additional generation capacity will be needed to secure the system. In February 2019, mineral resources and energy minister Gwede Mantashe predicted that a programme to source up to half of that amount could be online within two years, though no new projects have been added to the grid.
Eskom didn’t immediately reply to emailed questions.
Additional efforts to fill the gap have continued to face delays. The winners of the emergency power programme were picked early in 2021, but the round has been tied up by a court case lodged by a losing bidder that’s prevented projects from achieving financial close, the deadline for which has been delayed several times.
Projects selected in 2021 in a fifth round of SA’s previously successful auctions to add 2,600MW of renewable power, were originally scheduled to complete financing in March but haven’t done so.
At the time they were announced, chosen projects for emergency power equated to R45bn and the fifth renewable auction drew 25 successful wind and solar bids that would result in R50bn worth of investment.
Winning bidders in the emergency power round included Karpowership, TotalEnergies, Acwa Power., Electricite de France and Scatec. Those in the renewable round included Mainstream Renewable Power, Scatec, Globeleq, and African Rainbow Energy & Power.
Private developers have also awaited the opening of the sixth bid window for bids of another 2,600MW of power, which Mantashe said would occur in March.
Consultations with Eskom over the emergency power agreements are under way and a new date for the signing will be communicated, the department said.
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