State-owned power utility Eskom will go out “in the next few days” with an offer to buy 1,400MW of electricity from companies that are generating more than they need, according to the head of the project office in the presidency, Rudi Dicks.
Eskom has imposed rolling blackouts every day so far this year, as it is unable to provide reliable electricity supply from its ageing coal-powered plants. The power cuts have intensified in the past six months. And Eskom has increased the frequency with which it imposes stage 6 load-shedding, in which it sheds 6,000MW from the national grid. During stage 6 load-shedding, customers are without electricity for up to 10 hours in every 24.
If Eskom’s bid to purchase power from the private sector is successful, it has the potential to lessen load-shedding by one stage, but it is not clear how much surplus energy is being generated by industry.
The announcement by Dicks, made during a media briefing on Sunday morning, comes five months after Eskom CEO André de Ruyter said in mid-September that public enterprises minister Pravin Gordhan had agreed the process should go ahead immediately. Dicks said the delay was due to the need to obtain approval from the National Energy Regulator of SA (Nersa), which determines Eskom’s tariffs.
“Eskom needed assurance that it can recover the cost of purchasing it. Unfortunately, this was only communicated to Eskom when the multiyear price determination was made,” he said. Nersa announced its latest tariff decision four weeks ago.
Eskom’s board was expected to approve the plan at the weekend, the final step required before going to the market with an offer to purchase power on a short-term basis, said Dicks. He declined to specify the price Eskom would offer companies, saying it was sensitive market information that the utility would announce in due course.
Eskom anticipated buying energy from large industrial players that could immediately provide power to the grid, such as pulp and paper company Sappi, packaging and paper company Mondi and chemicals business Sasol, said Dicks.
Sappi already supplies Eskom with surplus energy from its 25MW Ngodwana biomass power plant and about 10MW from its Ngodwana mill.
Vincent Magwenya, President Cyril Ramaphosa’s spokesperson, told reporters that the president had consulted widely before announcing during his state of the nation address last week that the government had decided to declare a national state of disaster over SA’s power crisis. “SA is facing an enormous crisis which threatens both economic and social stability.”
He said the DA’s decision to challenge the declaration of a state of disaster was strange given that senior leaders in the party, including Western Cape premier Alan Winde and Cape Town mayor Geordin Hill-Lewis had previously called for it.
“The impact of power outages on food security, water supply, livelihoods, people’s health and the economy requires all South Africans to rally behind the efforts that are under way,” he said.
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