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UPDATE - Wind IPPs in S Africa unhappy with curtailment notice

The 111 MW Gibson Bay wind farm, located in the Kouga Municipality of the Eastern Cape province of South Africa. Photo by Enel Green Power. All rights reserved.

April 2 (Renewables Now) - The operators of South Africa’s 22 operational wind parks, totalling 1,980 MW, are dissatisfied with state-run utility Eskom Holdings SOC’s failure to consult with them before issuing curtailment notices.

The South African Wind Energy Association (SAWEA) says in a statement that Eskom has proposed to curtail wind farms due to a fall in demand just a week after sending a letter to all operating independent power producers (IPPs) to confirm that they are categorised as essential services during the country’s coronavirus-related lockdown. According to the debt-laden utility, demand has plunged by over 7,500 MW since Friday, when the lockdown was initiated.

In its letter, Eskom indicates it will try to compensate the wind park operators for the curtailment period by extending the terms of existing power purchase agreements (PPAs). Ntombifuthi Ntuli, CEO of SAWEA, however, notes that this will not eliminate the immediate impact on stakeholders with loans to repay.

“The industry will be approaching Eskom with a view to finding a constructive resolution that does not prejudice the country nor the power producers,” Ntuli stated. SAWEA also pointed out that according to some experts reduced demand is a normal system event and thus cannot imply a Force Majeure event, as declared by the utility.

An Eskom spokesperson told Reuters that the affected wind parks will be compensated for their losses.

Presently, there are 12 wind projects currently under construction in South Africa and all of them are in lockdown. SAWEA said it has been confirmed that the delays will not attract any penalties.

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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