Eskom CEO André de Ruyter welcomes the plan to allow for private power generation from certain companies, according to a report from The Sunday Times.
The report said De Ruyter proposed unbundling the power utility and allowing independent power producers (IPPs) to generate their own electricity three years ago, when he was first interviewed for the job.
“Even before I was approached for a role at Eskom, I was an advocate for this, as it will lead to greater efficiency, better accountability and a reduction in aggregate risk,” De Ruyter told The Sunday Times.
His comments come after an announcement made by Minister of Mineral Resources and Energy Gwede Mantashe earlier this week at the Mining Indaba in Cape Town.
The Minister said Government would make amendments to energy regulation to give mining companies the right to produce their own power. The companies may in some cases sell excess power to Eskom.
Reduction in coal-powered generation
The extra generation could help the power utility perform the extensive maintenance needed to restore its generation capacity and address the issue of obsolete power stations.
“We have a number of coal-fired units that are reaching end of life, and as these are put into retirement, we will need to supplement generation capacity,” De Ruyter stated.
“I think there is a very nice complementarity between bringing in new generation capacity and the phasing out of older assets.”
Energy experts have long called for the inclusion of IPPs in South Africa’s power mix. The changes could see renewable energy such as solar and wind power play a bigger role in the country’s energy supply.
Second state-owned power utility
Along with the announcement regarding independent power production, Mantashe said the government was seeking to establish a second state-owned power utility.
“As Eskom is grappling with all the electricity crises and problems, we must have a fail-safe option of giving energy, particularly with the pressure to close a number of coal-generating power stations,” Mantashe stated.
The proposition has been slammed by the DA’s shadow minister of mineral resources and energy, Kevin Mileham, who called the idea “utter madness.”
“South Africa doesn’t need another state-controlled entity for electricity generation when there is a myriad of Independent Power Producers (IPPs) who are ready and willing to generate electricity in order to diversify South Africa’s energy mix, making it more reliable and cheaper,” Mileham said.