Eskom will make part of the 36,000ha of land it owns in Mpumalanga available to independent power producers who take advantage of the 100MW licensing threshold announced by government previously, public enterprises minister Pravin Gordhan said Wednesday.
This would give them ready access to the transmission grid. He hopes to have more clarity on this by February next year.
Gordhan also said Eskom is working urgently to expand its transmission grid — especially in the Eastern Cape and Northern Cape — to accommodate the electricity generated by independent power producers.
The minister acknowledged that Eskom should have an appropriate wheeling tariff for independent power producers to use the transmission grid and said it will expedite getting the required approvals for this.
He also emphasised that there is no need for serious concern over the refusal by the department of fisheries, forestry & environment to grant postponements to several of Eskom’s power plants to meet air quality standards saying a constructive way forward on this will be found.
In a statement Eskom said the land in its power stations would be made available to private investors with near ready projects for renewable electricity generation.
“The land will be available for lease in a competitive bidding process, initially in Mpumalanga, and will be offered to the private sector for purposes of generating electricity from renewable technologies for own consumption or for sale to third parties. Mpumalanga has by far the most coal-fired plants with established transmission and distribution infrastructure.
“The bidding criteria will favour generators for size and speed of delivery — thus quickest delivery of the most megawatts to the grid to help relieve the constraints on the power system,” De Ruyter said. “The leasing of land would have to be made subject to production being achieved by a contracted date,” he added.
The maximum amount of electricity generation capacity per project will be capped at 100MW, and the lease will be for a minimum period of 20 years. Eskom will provide connection up to the nearest network connection point. In terms of the scheme, the land will remain the property of Eskom for the duration of the lease. The evaluation process will favour quick delivery of large capacity to the system.
“Eskom’s constrained financial situation, which makes access to capital expensive, makes it imperative to consider innovative ways to add new capacity to the electricity system, including leveraging Eskom ‘assets’ to incentivise the expedited establishment of generation capacity by independent power producers.
These assets include access to land and proximity to grid connection points, among others,” the statement said. The key objective of the project was to provide relief to the constrained electricity system in as short as possible a time.
The Minerals Council SA welcomed the announcements on land and boosting capacity on transmission lines from the Northern Cape and Eastern Cape as “welcome steps in much-needed structural reform to kick start the electricity-constrained economy.”
It said its member companies had a pipeline of 3,900MW of potential renewable energy projects worth more than R60bn that would, when implemented, substantially contribute to bridging the large country electricity supply deficit, diversify the country’s supply, reduce the sector’s carbon footprint and stabilise costs.
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