Nearly three years after the South African energy minister announced plans to offer an additional 6.3 gigawatts of renewable energy capacity in new auctions, the government has given a major go-ahead to power utility Eskom to procure that electricity.
According to media reports, the Ministry of Public Enterprises has given Eskom the green light to procure additional renewable energy. The utility had claimed that lack of adequate transmission infrastructure had forced it to limit power procurement from renewable energy projects. Eskom had refused to sign power purchase agreements with projects that had already been auctioned, allocated, and were ready to be commissioned.
In 2016, Eskom refused to sign a power purchase agreement with a 100 megawatt concentrated solar thermal power plant of SolarReserve. The project had been allocated to the developer following competitive auctions under the Renewable Energy Independent Power Producer Procurement Program (REIPPPP).
The South African Wind Energy Association said that the uncertainty around the fate of renewable energy projects as well as the future of REIPPPP put the brakes on nearly $4.7 billion worth of investment and creation of 15,000 jobs. The South African Renewable Energy Council had even threatened to sue Eskom over its alleged preference to nuclear power over renewable energy.
The African Development Bank had announced a loan of $1.34 billion to Eskom to strengthen and expand the transmission network. Soon after, the energy minister announced a breakthrough in the impasse between Eskom and the renewable energy generators. We may finally be seeing some light at the end of this tunnel of uncertainty.
Three years ago, after huge success in the initial four rounds of auctions, the Minister of Energy, Tina Joemat-Pettersson, announced that she would approach the National Energy Regulator (NERSA) to make arrangements to offer an additional 6.3 gigawatts in future auctions.