Power Purchase Agreement Eskom


He said the signing of the previous agreements had lasted 12 months, but the latest agreement had been discussed for 23 months. Minister Brown had been significantly absent from the public debate on renewable energy. It could have ordered Eskom to abide by the law and sign the agreement. The 2010 Integrated Resource Plan (CRR) had overestimated electricity consumption by 30%, and one of the main reasons for this was low economic growth, partly due to high electricity tariffs. The IRP 2006 had underestimated energy costs. The price of nuclear power had been underestimated and the long wait for the agreement to be signed had cost the country an additional R60 billion. Etzinger points out that STPPP bidders are not precluded from submitting bids for another similar procurement process, including the tendering program, likely launched by the Department of Mineral Resources and Energy (DMRE) for 2,000 MW of backup electricity. The Minister of Public Enterprises said she believes the signing could take place once the seven steps are completed. However, she took a step back by saying that she was really grateful that there was some consensus on how to move the process forward between the different counterparts.

South Africa was a fossil fuel country, but wanted to switch to cleaner, greener renewables. She tried to find a more balanced way to do it. Through the STPPP, Eskom intends to enter into contracts with South African or regional companies capable of providing short-term electricity at an affordable price, in order to fill a supply gap that had widened due to poor production rates at its new coal-fired power plants and under-expected coal fleet. The EFF said they would not allow the agreements to be signed unless Eskom or the DoE guaranteed that electricity costs to the consumer would not increase. The Medupi and Ingula plants were commissioned in 2015 and 2017 respectively. The Kusile plant is only partially functioning, with most of the project still under construction. All three institutions face controversial costs and corruption related to their works contracts is widely suspected of being at the root of the problem. The ABS contracts of the fourth round of the REIPPPP have already been renegotiated, although the initial agreements have not been signed.

At a briefing yesterday, Eskom CEO André de Ruyter said the distribution company had made progress in its operational stability, but would continue to seek a renegotiation of independent power producers` tariffs. The president said that the main question was whether signing the agreement would raise the price of electricity. . . .

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