S African renewables PPAs unlikely to be signed this year

The long-awaited signing of a number of renewable energy power purchase agreements (PPAs) with South African grid operator Eskom cannot happen this year, an inter-governmental task team told parliament.

Before signing the independent power producer (IPP) contracts, the public utility first needs to complete an update of the Integrated Resource Plan (IRP). Business Day cited Ompie Aphane, deputy director general for policy planning in the energy department, as saying at before parliament that the IRP update would be completed by February.

Eskom also plans to hold some consultations, including with the National Energy Regulator of South Africa (NERSA), with which it is to discuss its current financial position.

In a parliamentary update, officials from the departments of energy and public enterprises and Eskom representatives said the power oversupply in South Africa and the financial troubles of the company have delayed the signing of the PPAs. The grid operator’s refusal to sign more renewable energy deals put in limbo 37 projects with preferred bidder status from the last tenders under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Eskom supplies about 95% of South Africa’s electricity and holds a near monopoly on bulk electricity. The fear is that it is abusing its position as the operator of the grid to favour own investment in new power plants, including a potential nuclear energy project.

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