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Eskom flicks green power switch
The age of green power has finally arrived in South Africa and unlikely candidate Eskom is paving the way for the alternative energy industry.
Eskom, because it would be bidding with public money, was excluded from the department of energy's renewable energy procurement process. The procurement programme for independent power producers (IPPs), a two-phase tender system, requires bidders to meet a range of requirements before being evaluated on bid price and economic-development objectives. The objective is for IPPs to produce 3745 megawatts (MW) of renewable energy by 2016.
Although unable to bid, Eskom is moving quickly to build South Africa's first large-scale wind and solar generation plants. The African Development Bank signed loan agreements worth $365-million with Eskom last week, which were welcomed by the industry and seen as a major push forward.
Eskom spokesperson Hilary Joffe said the money would go towards Eskom's 100MW wind project at Sere in the Western Cape and its 100MW concentrating solar power project near Upington in the Northern Cape. Eskom said it planned to begin construction of the wind project early next year.
The new funding comprises $265-million from the African Development Bank's own resources and $100-million from the Clean Technology Fund.
Eskom said the bank financing was part of a broader funding plan for its renewable projects, which included sourcing from other development finance agencies.
Joffe said Eskom could not disclose the pricing of renewable power for consumers but said that the National Energy Regulator of South Africa (Nersa) set a revenue requirement that took into account Eskom's operational costs and an allowed rate of return on its assets. Joffe said there would not be separate prices for the solar or wind plants.
'IPP and co-generation' In the multi-year price determination (electricity tariffs set by Nersa), Eskom was allowed revenue for "IPP and co-generation". R2.3-billion was allocated for 2010/2011, R4.2-billion for 2011/2012 and R5.8-billion for 2012/2013.
Joffe said the money for renewables was set aside for Eskom to buy in power from IPPs. The costs of Eskom's own wind and solar projects were included in Eskom's capital budget (along with all its other projects), which was submitted to the regulator.
Source: Mail & Guardian , Lisa Steyn - Sep 30 2011
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