Eskom’s R106-billion wind and solar energy plans

Eskom, which supplies almost all South Africa’s electricity from coal-fired power plants, is considering spending R106 billion on wind and solar energy by 2030.

The investment plan, which Eskom could carry out by itself or in partnerships, is the most detailed demonstration yet of the utility’s ambition to move away from coal by taking advantage of the nation’s abundant wind and solar resources.

The state-owned company envisages spending 61.75 billion rand on wind power and 44.25 billion rand on solar energy by the end of the decade, a company presentation seen by Bloomberg shows. Some of the projects are planned on the sites of coal-fired plants that are scheduled to close. Eskom confirmed the presentation and the costs without giving further detail.

The potential investment is part of a plan previously communicated by Chief Executive Officer Andre de Ruyter to borrow money from development-finance institutions for projects that would reduce emissions from a company that accounts for two-fifths of South Africa’s greenhouse gas output.

While President Cyril Ramaphosa has set up a commission to advise him on climate change, Eskom’s plans have been publicly opposed by Gwede Mantashe, his energy minister, who says such a transition could eliminate thousands of coal-dependent jobs.

The presentation outlines three phases for the investment once funding and regulatory approvals have been secured.

In the first phase, which would span from 2022 to 2023, 246 megawatts of photovoltaic solar power could be built at the Arnot, Duvha, Lethabo, Majuba and Tutuka coal-fired power plants. A further 100 megawatts of solar-generation capacity could be built at Komati, the first of the aging power plants slated to close, and 19.5 megawatts of solar power at the site of the Sere wind-power plant.

Concentrated Solar

The second phase, which would last from 2023 to 2025, could see the construction of a 750 megawatt concentrated solar power plant at Olyvenhoutsdrift in the Northern Cape and 600 megawatts of photovoltaic power added at Sere.

The company may also seek to build 300 megawatts of wind power at Kleinzee on South Africa’s northwest coast and 200 megawatts of wind power at Aberdeen in the Eastern Cape province. A further 250 megawatts of renewable energy generation capacity could be built on the sites of decommissioned coal-fired power plants.

The third phase envisages the building of a further 2,950 megawatts of solar photovoltaic capacity between 2025 and 2030 as well as 3,100 megawatts of wind power.

Eskom already has debt of about 400 billion rand, mainly from an overrun in the cost of construction of two coal-fired power plants. Debt from development-finance institutions is generally cheaper than borrowings from commercial lenders.

Until now almost all of South Africa’s investment and planned investment in renewable energy has been by private companies. Eskom has no plans for further coal plants but is considering investment in battery storage and gas-fired plants. The company’s annual revenue is about $13.5 billion.

Now read: Eskom paid R80,000 for knee guards worth R300

Latest news

Partner Content

Show comments

Recommended

Share this article
Eskom’s R106-billion wind and solar energy plans