Eskom signs leasing deals for 2,000MW of private renewable projects

Eskom has signed leasing contracts with four renewable energy companies to build new renewable energy facilities on land owned by the power utility.

The four companies — HDF Energy SA, Red Rocket SA, Sola Group and Mainstream Renewable Power Developments SA — are expected to be connected to the national grid within 24 to 36 months and contribute some 2000MW to the grid.

The final capacity that these projects will contribute will be determined following comprehensive feasibility studies by the companies.

Eskom CEO Andre de Ruyter said the land is near the Majuba and Tutuka Power Stations in Mpumalanga, allowing for easier access to the grid.

“We have responded to the call by President Cyril Ramaphosa to come up with ambitious, bold and urgent responses to the energy crisis,” said De Ruyter.

“We are delighted that we are able to be the enabler of the rapid addition of new generation capacity which the country sorely needs.”

“What makes this different is that unlike the bid window process that is run by the IPP [Independent Power Producers] office, there is no requirement for Eskom to sign a power purchase agreement.”

“So there’s no onerous obligation, there’s no price negotiation. This is the beginning of an electricity market which enabled by the President’s announcement on the 25th of July this year lifting the cap on licensing for new generation capacity,” De Ruyter stated.

He added that because “Eskom is not the buyer of electricity” there was no need to obtain a Treasury guarantee for these investments, and the agreements do not present “any risk to the taxpayer”.

De Ruyter said that the build of these new plants will bring billions of rand in investments and add jobs to Mpumalanga.

“For this tranche, we are looking at an investment of about R40 billion at least in total. These investments will take place in Mpumalanga, in the heart of coal country.

“[This] proves that renewable energy and coal fired generation can co-exist,” De Ruyter said.

“This is a question of putting together an energy mix for South Africa that is sensible, appropriate and that meets the needs of the country as well as creating much needed jobs by generating clean electricity in a province that has unemployment that is substantially higher than the national average.”

The CEO said Eskom would be releasing further tranches of its land for leasing as “our contribution to enabling the rapid resolution of South Africa’s electricity challenge”.

Eskom says the next phase of land to be made available will be focused on the property around Kendal and Kusile power stations also in Mpumalanga and the retired Ingagane power station in KwaZulu-Natal.

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Eskom signs leasing deals for 2,000MW of private renewable projects