South African Utility Eskom May Soon End Anti-Renewable Energy Stance

Originally published on CleanTechies.

South Africa’s power utility is expected to end its alleged opposition towards procurement of renewable energy from some projects under the country’s auction program, the energy minister has indicated.

Tina Joemat-Pettersson recently stated that the impasse between Eskom and renewable energy generators has been broken. This could mean that the utility may soon fulfill its promise to procure all electricity generated from projects already auctioned.

In August last year, Eskom had refused to sign a PPA with a concentrated solar power project backed by SolarReserve with a capacity of 100 megawatts. The project has a tariff of 12.40/kWh and the agreement was supposed to be signed for a duration of 20 years.

Eskom openly stated that it will no longer sign PPAs with any renewable energy projects. The utility stated that there was excess renewable energy going into the grid, which has also increased the cost of power.

Eskom has expressed difficulty in absorption of the rapidly increasing renewable energy capacity in the country due to transmission capacity constraints. The utility recently secured funding to strengthen the power grid. The African Development Bank (AfDB) announced a $1.34 billion loan to South African utility Eskom for the expansion and strengthening of its transmission network.

Reprinted with permission.